Credit crisis worsens as Alan Greenspan says the Fed is powerless

From The Times | December 13, 2007 | Credit crisis worsens as Alan Greenspan says the Fed is powerless | Tom Bawden

Fallout from the sub-prime mortgage crisis wreaked further havoc yesterday as Bank of America, Wachovia and PNC all said that investment write-downs would be worse than forecast as the credit crunch worsened.

Bank of America, which said last month that it may need to write down the value of its mortgage bond portfolio by about $3 billion (£1.4 billion) this quarter, conceded that the losses would probably be considerably higher. Wachovia, separately, doubled its provision for fourth-quarter loan losses to about $1 billion, while PNC, in Pennsylvania, said that it would take a $110 million fourth-quarter charge, most of it relating to residential mortgages. Meanwhile, shares in Sallie Mae fell by 13 per cent, the most in 14 years, after America’s largest student lender cut its profit forecast for 2008 by 17 per cent. ...