Investors pessimistic about the prospects of U.S. banks and brokers have some good company: Wall Street chief executives.

And yet the bosses' grim outlook is not yet fully reflected in analysts' expectations for money managers and securities firms. That means beaten-down bank stocks are likely in for more punishment.

In recent regulatory filings and investor meetings, executives from brokerages and investment banks cautioned that the first two months of the current December-end quarter have shown little improvement from the September quarter, deemed by many as the toughest since the 2008 financial crisis.

If anything, the markets have become more difficult over the course of October and November, UBS Wealth Management Americas CEO Robert McCann said at a recent investor day.

Brokers have been humbled by a near-zero rate environment, a flat yield curve and volatility that is exhausting individual investors globally, said McCann, who runs one of the largest brokerages in the United States.

Banking and brokerage stocks have been taking it on the chin all year. Through Friday, the S&P 500 Investment Banks & Brokerage Index <.GSPINVB> was down 45 percent this year, against a 6.7 percent gain in the benchmark S&P 500 Index.

Yet shareholders should brace for more disappointment: The consensus Wall Street view may not be bearish enough.

A StarMine analysis of 27 U.S. investment banks and brokers shows the most accurate analysts' earnings growth forecasts are 8 percent lower than the broader Wall Street current-quarter consensus.

The widest gaps in these estimates -- indicating a high likelihood that banks will fall short of expectations -- can be found in estimates for Jefferies Group Inc , a predicted 34 percent shortfall; Piper Jaffray Cos
, a 23 percent shortfall; and Goldman Sachs Group , where the StarMine forecast is 13 percent lower.

(To see a graphic of the 10 biggest gaps in forecasts, click on http://link.reuters.com/wyk45s.)

I expect the consensus to catch up as more analysts start to absorb some of the same information, StarMine fundamental research director Tim Gaumer said.

Certainly, the consensus view was already pretty grim. Thomson Reuters Proprietary Research said estimated earnings growth for S&P 500 financial companies for the December-end quarter slid to 19 percent on November 29 from a rosier 40 percent forecast in April.

Estimated earnings growth for the March-end quarter dropped to 8.5 percent last week from 27 percent in April.

SLUDGE IN THE SYSTEM

Persistent joblessness and anxiety about Europe's debt crisis have driven many investors to the sidelines and prompted many companies to hold off on big transactions. Lenders and brokers, meanwhile, must contend with capital rules and regulatory reforms passed in the wake of the 2008 financial crisis.

Underwriting activity has slowed, with bank executives reporting a growing backlog of companies who want to raise capital but are waiting for conditions to improve.

With respect to the very near-term outlook, we anticipate that market conditions in October and November 2011 will lead to a more difficult December 2011 quarter, regional brokerage and investment bank Raymond James Financial said in its annual report for the fiscal year ended September 30.

Trade volumes have soared in a market where wild swings are now the norm, though trading profit is harder to generate now that banks are discouraged from betting their own capital.

Sandler O'Neill & Partners brokerage analyst Richard Repetto last week estimated November retail stock-trading volumes fell 5 to 10 percent from October, while overall industry volume fell 15 percent.

Investors have been fleeing stocks, with the Investment Company Institute reporting last week that $25.6 billion (16.3 billion pounds) had been pulled from U.S. equity funds so far in the fourth quarter.

Stifel Financial CEO Ronald Kruszewski, speaking at a KBW conference last week, said the markets were, in a word, soft. Lending is down, he said, citing a combination of tighter standards, weaker client demand and pending capital rules.

It's just a perfect storm in an environment that has a tremendous amount of sludge in the system, said Kruszewski, whose St. Louis company has built up a mid-tier investment bank through a series of takeovers and Wall Street hires.

ARE WE THERE YET?

These tepid results may be even more deflating because most investors had expected the economy, and the banks, to have rebounded from the 2008 crash by now.

Online brokerage TD Ameritrade in a recent filing warned that the tough times could extend well into next year.

When we look at 2012, we do so with the expectation that the difficult business environment of the last three years will continue, TD Ameritrade CEO Fred Tomczyk said during the company's latest quarterly conference call.

Online brokers are vulnerable to razor-thin interest rates and the narrow spread between short- and long-term yields.

Individual banks may buck the trend. Jefferies, in a November 21 letter batting down speculation about its European debt exposure, said earnings for its fiscal fourth quarter, ended November 30, would likely increase from the third quarter.

And though banking activity tends to slow as the holidays approach, mergers and underwriting activity could snap back.

Still, investors and companies remain largely frozen by worries about Europe's debt crisis, a sluggish U.S. economy and highly volatile markets.

Lazard Ltd CEO Kenneth Jacobs said at the KBW conference that up until August, his firm had seen a pretty active deal market, with rising CEO confidence and increasing availability of debt financing.

But the Standard & Poor's downgrade of the United States' credit rating in August, and the depths of Europe's sovereign debt crisis, undermined that confidence and sent the market on another roller-coaster ride.

When there is a lot of volatility, confidence levels get shaken and people have a tendency to put things off or to slow things down, Jacobs said. That is going to probably continue until there is more stabilization in the markets.

(Reporting by Joseph A. Giannone; Additional reporting by Lauren LaCapra and John McCrank; Editing by Edward Tobin and John Wallace)