Reply #26: Bank gloom overshadows prospect of lower rates

[UpInArms]

http://www.reuters.com/article/bondsNews/idUSL1024113520080111?sp=true

LONDON (Reuters) - Further interest rate cuts may be in the offing and money market rates may be easing but news from the world's major banks on Friday gave no indication that the global credit crisis is abating.

Merrill Lynch is expected to suffer $15 billion in losses stemming from wrecked mortgage investments, almost twice its original estimate, the New York Times reported on Friday.

As a result, Merrill is seeking more capital from an outside investor, the paper said, citing people who had been briefed on the company's plans. The bank reports its results next week.

Bank of America Corp said it had agreed to buy struggling Countrywide Financial Corp, the largest U.S. mortgage lender, a move that could help avert one of the biggest collapses in the U.S. housing crisis.

Bank of America said the all-stock transaction was worth approximately $4 billion, a fraction of the roughly $26 billion Countrywide was worth last February, just as the risky end of the nation's housing market was about to implode.

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Eeeekkkk!!!

You mean - all that stock that they bought is worthless?????