kangarooistan wrote:
> Fresh banking fears knock shares
>
> Wall Street is now fearful other banks will follow suit
>
> America's main share indexes have fallen sharply due to renewed fears
> about the impact of bad mortgage debt and the wider credit squeeze.
>
> The declines come after the news that US bank Bear Stearns, at the
> centre of the mortgage debt crisis, has been forced to seek emergency
> funding.
>
> Increasing concerns that other lenders may follow suit sent the S&P's
> 500 down 27 points or 2% to close at 1,288.
>
> Meanwhile, the Dow Jones lost 1.6% or 195 points, and the Nasdaq fell
> 2.3%.
>
> Sentiment on Wall Street has been further hit by the continuing
> weakness of the dollar and high oil prices.
>
> Sub-prime spark
>
> Speculation had intensified in recent days that Bear Stearns, Wall
> Street's fifth largest investment bank, was struggling to fund its
> daily business.
>
>
> This is another chapter in a book rather than a one-act play
> Analyst Phil Orlando
>
> Its shares ended down 46% following Friday's announcement.
>
> Analysts said markets were now worried that further banks may now need
> emergency funds, and that it will only exasperate the threat of the US
> sliding into recession.
>
> "This is another chapter in a book rather than a one-act play," said
> Phil Orlando, chief equity market strategist at Federated Investors.
>
> The credit crunch was caused because banks became less willing to lend
> to each other after they suffered large losses on investments linked
> to the US housing market, and the sub-prime sector in particular.
>
> Sub-prime lenders focus on clients with poor or non-existent credit
> histories, and a record number of borrowers have defaulted on loans.
>
> This has had a knock-on impact on the wider US housing market, which
> has seen the first countrywide fall in prices in decades.
>
> http://news.bbc.co.uk/2/hi/business/7297554.stm
they deserve it
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