EW YORK, Nov 9 (Reuters) - The U.S. credit crisis deepened on Friday as Wachovia Corp reported a $1.1 billion loss on subprime mortgage-related debt in October, while Capital One Financial Corp said more customers are missing payments. Shares of both companies fell, amid broad declines in financial stocks. Wachovia (WB.N: Quote, Profile , Research), the fourth-largest U.S. bank said the value of so-called asset-backed collateralized debt obligations (CDOs) it holds fell to $676 million as of Oct. 31 from $1.8 billion on Sept. 30. The $1.1 billion pre-tax loss is in addition to $347 million in the third quarter, Wachovia said. Charlotte, North Carolina-based Wachovia (WB.N: Quote, Profile , Research) also expects to boost loan losses by $500 million to $600 million this quarter, largely because of "dramatic declines" in housing values. Wachovia paid $24.2 billion last year for Golden West Financial Corp, a big California mortgage lender. Wachovia joined a growing list of financial companies -- including Citigroup Inc (C.N: Quote, Profile , Research), Merrill Lynch & Co Inc (MER.N: Quote, Profile , Research) and Morgan Stanley (MS.N: Quote, Profile , Research) -- that have reported losses from worsening conditions in consumer credit and capital markets.
Shares of both companies fell, amid broad declines in financial stocks.
Wachovia (WB.N: Quote, Profile , Research), the fourth-largest U.S. bank said the value of so-called asset-backed collateralized debt obligations (CDOs) it holds fell to $676 million as of Oct. 31 from $1.8 billion on Sept. 30. The $1.1 billion pre-tax loss is in addition to $347 million in the third quarter, Wachovia said.
Charlotte, North Carolina-based Wachovia (WB.N: Quote, Profile , Research) also expects to boost loan losses by $500 million to $600 million this quarter, largely because of "dramatic declines" in housing values. Wachovia paid $24.2 billion last year for Golden West Financial Corp, a big California mortgage lender.
Wachovia joined a growing list of financial companies -- including Citigroup Inc (C.N: Quote, Profile , Research), Merrill Lynch & Co Inc (MER.N: Quote, Profile , Research) and Morgan Stanley (MS.N: Quote, Profile , Research) -- that have reported losses from worsening conditions in consumer credit and capital markets.
I should qualify that by saying, again, that I don't know what Wachovia's overall balance sheet looks like. It may be in deep trouble, and it's certainly going to suffer some losses, but I highly doubt we're going to see anything on the level of the investment houses. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
I should qualify that by saying, again, that I don't know what Wachovia's overall balance sheet looks like
Wachovia paid $24.2 billion last year for Golden West Financial Corp, a big California mortgage lender.
which suggests that other banks still have a long way to go to come clean... In the long run, we're all dead. John Maynard Keynes
The capital underlying Wall Street, at the top, is not all that large - a matter of a few hundred billion. Given the piling of risk upon risk that has been engaged in over the last few years, and the size of the losses in the mortgage market alone that seem probable - my own estimate last spring of $980 billion looks increasingly likely to be somewhat below the final figure - it appears almost inevitable that in a bear market in which liquidity dries up and investors become skeptical, Wall Street's capital will be wiped out. Only the commercial banks like Wachovia and Bank of America whose investment banking ambitions have been largely thwarted and whose portfolios of Level 3 rubbish are correspondingly lower, are less likely to disappear. Level 3 Storm about to hit Wall Street
Level 3 Storm about to hit Wall Street
But that article was published on November 3. The news about Wachovia came out on the 9th. Truth unfolds in time through a communal process.
