Bloomberg - "Washington Mutual Says Third-Quarter Profit Fell 75%" (10-5-07)

"Washington Mutual Inc., the biggest U.S. savings and loan, said third-quarter profit fell about 75 percent after the worst housing slump in 16 years caused more borrowers to default. Earnings may be the lowest since the fourth quarter of 1998 on $1.39 billion of bad-loan provisions and writedowns, the Seattle-based company said today in a statement. Washington Mutual rose as much as 3.4 percent in New York trading after Chief Executive Officer Kerry Killinger, 58, said he expects results to improve in the fourth quarter."

Bloomberg - "Homebuilders Liquidate Assets in Desperation Sales" (10-5-07)

"When D.R. Horton Inc., the second- biggest U.S. homebuilder, couldn't sell the one-bedroom condominium in San Diego it listed for $349,800, the property was auctioned as a last resort for 37 percent less. D.R. Horton, with annual revenue of about $11 billion, and Hovnanian Enterprises Inc. now face the worst choice in the worst residential real estate slump since the 1930s. They're selling homes at any price they can get."

Market Watch - "Merrill pegs write-down at $5.5 billion" (10-5-07)

"Most of the write-down, $4.5 billion, comes as the firm marks to market the value of collateralized debt obligations, or CDOs, and subprime mortgages. Merrill said it also will take a $967 million gross write-down for underwriting fees, related to corporate and financial sponsor lending commitments, regardless of expected timing or closing. The net charge will be $463 million."

Market Watch - "Prosecutors probing hedge funds' demise" (10-5-07)

"Federal prosecutors have made a request for information related to the hedge funds, but the probe is in the early stages and has not resulted in any subpoenas, according to a report on the Journal's Web site. The report cited people familiar with the matter. The meltdown in the two hedge funds -- High-Grade Structured Credit Strategies Fund and High-Grade Structured Credit Strategies Enhanced Leverage Fund -- cost investors $1.6 billion, the Journal reported. The funds started losing money in the spring when bets on mortgages went sour."

Bloomberg - "JPMorgan, Bank of America May Write Down Buyout Loans" (10-5-07)

"JPMorgan Chase & Co. and Bank of America Corp., the biggest arrangers of U.S. leveraged loans, may write down the value of their holdings by a combined $3 billion in the third quarter after surging mortgage defaults halted credit markets, analysts at Sanford C. Bernstein & Co. said. JPMorgan may have to write down holdings by about $2 billion, and Bank of America's markdown may be about $1 billion, Bernstein analysts Howard Mason and Michael Howard wrote in a note to investors today. Bank of America, the nation's second- largest bank, and JPMorgan, the third biggest, shared 30 percent of the market for U.S. leveraged buyouts this year, according to data compiled by Bloomberg."

Real Estate Journal - "Home-Price Outlook Takes Another Hit" (10-5-07)

"The outlook for house prices is getting even gloomier as traders on the Chicago Mercantile Exchange bet on steep price declines and the number of homes for sale grows. Traders on the CME expect home prices in 10 major cities to drop an average of about 10% from mid-2007 to November 2011, according to an analysis by Tradition Financial Services Inc., New York, of prices for housing futures traded on the exchange."

Real Estate Journal - "Democrats Propose Mortgage Aid To Ease the Credit Crunch" (10-5-07)

"Expressing concern that turmoil in the mortgage markets will get worse, the chairman of a House committee overseeing the banking industry said Fannie Mae and Freddie Mac should be allowed to do more now to ease the credit crunch. House Financial Services Committee Chairman Barney Frank (D., Mass.) said he would support a temporary increase in the portfolios held by the two mortgage giants. Just two weeks ago he said such a change should come only as part of broader regulatory reform for the government-sponsored enterprises."