Breaking below $1 means there have been large losses: in fact, the value of the $785 million of Lehman paper they hold has been written down to zero. The fund has about $64 billion in assets, but the loss is enough so that the net asset value of the fund is now $0.97.
3) the Russian stock and bond market stopped trading for a second day after dropping about 7 percent. Trading was suspended indefinitely in the late morning (Russian time); The Russian government has been providing additional funds to the country's largest banks. KIT Finance, a Russian brokerage firm, said it was trying to find a buyer after it could not meet some of its obligations. The combination of falling commodity prices and Russia's war with Georgia has proven very toxic to the Russian markets.
1) A story nearly as big as AIG has unfolded in the UK, where Lloyds is in merger talks with the UK's largest mortgage lender, HBOS. Lloyds is up 18 percent in pre-open trading here.
2) Some good news: 30-year mortgage rates, at 5.82%, are down three-quarters of a point in the past month.
Mortgage applications were a mixed bag: applications for refinancings soared 88 percent from the previous week, reflecting the lower rates, but applications to purchase a home were only up 2.4 percent, a bit of a disappointment.
3) Nortel down 16 percent pre-open as they lowered their revenue forecasts for 2008, the main issues are currency issues and a slowdown in sales in North America.
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