We have seen $90 billion of writedowns to date. Standard and Poor’s is saying that you can super size that order. Writedowns total losses are expected to be $265 billion or more.

So far, Wall Street has been shouldering the brunt of the losses. S&P says the next losses will affect smaller financial institutions including regional banks in the U.S., credit unions, and lenders in Europe and Asia.

Just yesterday, UBS, the biggest Swiss bank, wrote down $14 billion of assets.

Forseeing Subprime: State-Run Investment Pools Hit by Mortgage Contagion. Analysis and Discussion with Mike Verano of PFM Asset Managment: Disposed of $3 Billion of Commercial Paper Before Subprime Implosion.

Barclays Bank reports a $2.7 billion write down.

Merrill Lynch Officially Names John Thain as New Chairman/CEO.

More Credit Writedowns for Financials Arena. Financials Group and Credit Risk - Analysis and Discussion with Daniel Castro of CSG Group

Stocks to Watch: Wachovia. Wachovia to Raise Loan Loss Allocation to $500 Million to $600 Million in 4Q; World’s Biggest Banks Have Written Down $40 Billion of Assets.

Wachovia became the latest banking giant to warn that it sees bigger losses as a result of the continued deterioration in the mortgage market.

Wachovia stated in a filing to the Securities and Exchange Commission that it’s anticipating loan losses between $500 million and $600 million in the fourth quarter, citing anticipated loan growth and the impact of continuing credit deterioration in its loan portfolio.

“The expected credit deterioration will likely be focused in certain geographic areas that have recently experienced dramatic declines in housing values,” according to the filing.

Wachovia shares were off nearly 4% in premarket trading Friday morning. Due to the October market deterioration, its asset-backed collateralized debt obligations, or CDOs, experienced further declines in value in the month of October 2007 by an amount it currently estimates to be approximately $1.1 billion pre-tax.

Governor Randall S. Kroszner At the Consumer Bankers Association 2007 Fair Lending Conference, Washington, D.C.
November 5, 2007

The Challenges Facing Subprime Mortgage Borrowers

I am delighted to have been invited to speak to you about the important and pressing problems in the subprime mortgage industry. My remarks today will address those problems, with particular focus on how they are affecting borrowers. The sharp increases in subprime mortgage delinquencies and foreclosures this year have created personal, economic, and social distress for many homeowners and communities. I will discuss first the forces that caused that distress and then turn to the prospects for troubled borrowers. Finally, I will address the critical question of what can be done to keep the affected families in their homes and alleviate the other difficulties they and their communities will face.

Background on the Subprime Mortgage Market

Subprime mortgages are associated with high credit risk because the borrower lacks a strong or lengthy credit history or has other characteristics that are associated with high probabilities of default. The expansion of subprime lending since the mid-1990s has been quite substantial, with the number of subprime mortgage loans now totaling 7-3/4 million, or 14 percent of the overall mortgage market. Technological advances and financial innovations that reduced the costs of lending to higher-risk households contributed importantly to the expansion of the subprime market. In particular, improvements in information processing allowed lenders to standardize their underwriting techniques and to better manage risks by adjusting the terms of loans to reflect the expected probability of default. Ongoing growth in the secondary market for mortgage loans also contributed to the growth of subprime lending by lowering transactions costs for investors and by spreading risk more broadly, especially through the process of securitization. That process allows intermediaries to pool large numbers of mortgages and sell the resulting cash flows to investors, often as components of structured securities.

Citi Up To $11 Billion Due To Additional Writedowns From Subprime Mortgages and CDO’s. Citigroup’s Prince Steps Down. CNBS Says Prince Alwaleed Wants Sandy Weill to Run Citigroup.

Loan quality deteriorates, Change in bad loans/chargeoffs.*1. Washington Mutual 284% (This appears to be the reason they are making so many foolish mistakes.) 2. Zions Bancorp 486% 3. Keycorp 234% 4. Fifth Third 140% *Source: Punk Ziegel