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'Carnage on Wall Street as loans go bad
By Steve Schifferes Economics reporter, BBC News, New York

The scale of the losses that will hit Wall Street banks could approach half a trillion dollars as large numbers of sub-prime home loans go bad.
And the carnage in the financial markets could cause a credit squeeze that will dampen economic growth for years to come.
The US sub-prime crisis is leading to a wave of foreclosures across the US that is having a devastating effect on the US housing market, and is likely to lead to the halving of the US economic growth rate in the next six months.

At the root of the problem is the breakdown of the new model of mortgage lending, when instead of giving mortgages directly to their customers, banks borrowed money from credit markets to fund a growing volume of mortgages.
See how the new model of mortgage lending went wrong
But its biggest impact is likely to be on the financial sector, which made billions of dollars in profits in the past few years by betting heavily on the sub-prime market.
Already the big Wall Street banks have revealed losses totalling $50bn (£24bn), and the head of the biggest bank - Chuck Prince of Citigroup - and the biggest investment firm - Stan O'Neill of Merrill Lynch - have departed.
Show and tell'

Lees verder: http://news.bbc.co.uk/2/hi/business/7086909.stm