Markets got hit again yesterday. Bloomberg reports:
U.S. stocks fell, erasing their gains since the Federal Reserve's Sept. 18 interest-rate cut, after New York expanded its probe of the mortgage industry, General Motors Corp. posted a record loss and the dollar tumbled.
Washington Mutual Inc., the largest U.S. savings and loan, declined the most in 20 years after New York Attorney General Andrew Cuomo said there's a "pattern of collusion" in the bank's home-loan appraisals. Fannie Mae posted its steepest drop since 2005 and Freddie Mac sank to a seven-year low after Cuomo subpoenaed the two biggest U.S. providers of mortgage financing. GM slid after writing down $39 billion in tax benefits.
Credit fears are increasing.
Capital One Financial Corp...said its cost for bad debts tied to mortgages and credit cards will be worse than predicted...
American Express Co. and other U.S. credit-card issuers may be forced to revise their loss estimates after Capital One boosted its forecast, Morgan Stanley analyst Kenneth Posner said...
Citigroup Inc...and HSBC Holdings Plc received warnings of possible downgrades to their structured investment vehicles as Moody's Investors Service reviewed its ratings on $33 billion of debt...
U.S. banks and brokers face as much as $100 billion of writedowns because of Level 3 accounting rules, in addition to the losses caused by the subprime credit slump, according to Royal Bank of Scotland Group Plc...
The dollar fell to a record versus the euro and the lowest since 1981 against the pound. The New York Board of Trade's dollar index dropped to 75.077, the lowest since the gauge started in March 1973.
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