“The [U.S.] housing sector has continued to decline and to erode at a very, very rapid rate,” [Federal Reserve Vice Chairman Donald Kohn] said in response to a question. “It would be nice to see some early signs that it was beginning to stabilize, and we haven’t seen that yet.”
Merrill Lynch & Co., Citigroup Inc. and other banks that underwrote so-called collateralized debt obligations linked to mortgages and other credits have already warned of losses of at least $47.2 billion on CDOs and other holdings. The securities slid as investors shunned assets linked to subprime U.S. mortgages following a surge in loan defaults.
“There’s further to go” in revealing losses, Kohn said today. He added that the more information that is made public about potential losses “the better,” as it will help ease uncertainty.”
UPADTE: A publishing error resulted in this excerpt being published twice. And an editor’s error (damn monkeys) resulted in the deletion of the version with (rather than without) our reader’s comments (which we didn’t even have a chance to read). Sorry about that folks, no slight intended, and please feel free to comment again. And as always, thank you for plugging in.
Kohn Sees Risk of Reduced Credit From Market Upheaval [Bloomberg]

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