Wednesday, November 07, 2007

If It Wasn't For Bad News

Wouldn't have much news at all. LATimes (11.07.07):
"Wall Street today suffered one of its worst routs since the global credit crunch began, as financial stocks were hammered again and a fresh plunge in the dollar deepened concerns about the U.S. economic outlook.

The Dow Jones industrials sank 360.92 points, or 2.6%, to 13,300.02, amid a broad market decline."

Wall Street takes a beating

"The Standard & Poor's 500 index lost 44.65 points, or 2.9%, to 1,475.62. It was the biggest one-day decline for the S&P index since February, surpassing even the worst days in August, when the credit crunch rooted in the housing market's woes began to spark heavy selling of stocks."

Losers outnumbered gainers "by a stunning 10 to 1 on the New York Stock Exchange."

First Merrill, then Citigroup, now Washington Mutual, who today "warned of rising losses on loans as more homeowners default. The company's shares plummeted $4.19, or 17%, to $20.04, and helped trigger another widespread sell-off in financial issues."

Not to mention WAMU's troubles with Andrew.

The meltdown is upon us. Bloomberg (11.07.07):

"Credit-default swaps on bonds of Citigroup Inc., Wachovia Corp. and Morgan Stanley are trading at the highest in at least five years on speculation the biggest U.S. banks may be forced to write down more subprime assets."

Citigroup Credit Risk Highest in More Than Five Years

Citigroup has already said "it will write down the value of subprime mortgages and collateralized debt obligations by $8 billion to $11 billion. Citigroup, the biggest U.S. bank, may reduce the value of subprime securities by $2.7 billion more, analysts at bond research firm CreditSights Inc. led by David Hendler said yesterday. Additional writedowns may balloon to $21.1 billion if off-balance-sheet units are included, they said."

Morgan Stanley "may lose as much as $6 billion", while "Barclays Plc, the U.K.'s third-largest bank, and Royal Bank of Scotland Group Plc may have to write down a combined 2.1 billion pounds ($4.4 billion) linked to subprime-mortgage securities".

If that wasn't enough, "Lehman Brothers Holdings Inc., Bear Stearns Cos. and Goldman Sachs Group Inc., all based in New York, stand to lose as much as a quarter of their equity".

And don't forget Wachovia and Bank of America!

Automotives, you say? Ha! AP (11.07.07):

"General Motors Corp. posted a company record $39 billion loss Wednesday for the third quarter, as a charge involving unused tax credits brought an abrupt end to a string of three profitable quarters for the nation's largest automaker.

The loss was one of the biggest quarterly corporate deficits ever."

GM Loses $39B in 3Q, Shares Fall

Bloomberg (11.07.07):
"Ford Motor Co., the second-biggest U.S. automaker, may have returned to a loss in the third quarter as plunging sales in its home market wiped out the benefits of job cuts and plant closings."

Ford May Have Returned to Loss During Third Quarter

In a nutshell, today's business news really sucked, big-time.

At least oil didn't hit $100US. At least not today it didn't.

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