Citi Losses Less than Expected; Merrill Drops $5B

They're near deal to settle allegations on mortgage-bond deals

(NEWSER) - A number of top Wall Street banks are on the verge of settling fraud allegations with the SEC for the mortgage-bond shenanigans that led to the financial crisis, sources tell the Wall Street Journal . The cases are being handled individually, since each bank faces substantially different charges, with the first settlement expected as soon as next week. They represent regulators’ biggest attempt so far to hold Wall Street accountable for the crisis. More»

It's not just the firings: others are leaving for safer jobs

(NEWSER) - The financial crisis is reshaping not just the landscape of Wall Street, but its face as well, reports the New York Times in a look at the hemorrhaging of the Street's top talent. Layoffs aside, finance's best and brightest—arguably the same daring risk-takers responsible for the recession—are seizing the chance to retire early, or more often, fleeing federally overseen big banks in favor of more cash and opportunity at smaller boutiques. More»

Writedowns lead to $11.18 per share loss; Wells Fargo says merger on track

(NEWSER) - Wachovia reported losses of $23.9 billion in the third quarter, a whopping hit of $11.18 per share that blew by analysts’ estimates of a 2-cent-per-share loss, reports Bloomberg. But Wachovia’s loss—virtually all tied to mortgages or mortgage-related securities—may be Wells Fargo’s gain. More»

Other firms could follow suit, meaning widespread losses

(NEWSER) - What caused two venerable investment banks to implode this weekend, and how much more damage can we expect? It started when Lehman Bros. surprised markets by slashing the valuation of its mortgage holdings last week, making downward revisions so steep that "even longtime bears on the stock thought the firm was finally marking its residential portfolio to realistic levels," the Wall Street Journal writes. This prompted investors’ fears that other firms would follow suit, driving losses all around. More»

(NEWSER) - Barclay's dropping out of a Lehman deal means that the Feds lost a game of chicken with the big banks holding Lehman mortgages, and now there will be a disorderly liquidation of Lehman assets, instead of the orderly liquidation that would have been possible with a real buyer, James Cramer writes on TheStreet.com. The question is how big a hit those owning Lehman mortgages will take. More»