US banks continue in turmoil reporting lower profits, write-downs and hunting for fresh funds Bank of America reported a 77% drop in profits in the first three months of 2008, hit by trading losses and a 6 billion write-down to cover bad loans. National City Corporation from the Midwest admitted it was looking for 7 billion US dollars.
New York based Citigroup has suffered a second massive loss and is cutting 9,000 jobs as the credit crisis continues to take its toll on the biggest US bank.
Merrill Lynch posted its third straight quarterly loss, its first of 2008, after more write-downs linked to the embattled credit markets. The world's largest brokerage lost 6.5 billion US dollars in write downs on subprime mortgages and other risky assets.
The United States fourth-largest bank Wachovia Corporation reported a 393 million US dollars loss in the first quarter and has been forced to cut its dividend and seek a 7 billion US dollar cash injection to make up its mortgage business.
American Airlines expects to cancel more flights on Wednesday after cancelling about 500 on Tuesday.
Unite States employers shed 80.000 jobs in March, Labor Department figures have shown, in the latest sign that the US economy may be falling into recession. The decline was the third monthly drop in succession, and worse than market expectations of a 60,000 reduction.
Federal Reserve Chairman Ben Bernanke warned on Wednesday that US gross domestic product (GDP) could contract in the first six months of 2008. If this happens the US would be in recession since two consecutive three-month periods of negative growth is generally accepted as such.
The United States Treasury revealed on Monday its blueprint for the biggest overhaul of regulation of the financial sector since the stock market crash of 1929 and the ensuing Great Depression.
United States Federal Reserve will make a further 100 billion US dollars available to major banks in April, trying to ease concerns about a global credit crunch. The sum, offered across two auctions, is in addition to 260 billion US dollars provided in short-term loans to the end of March.
Other unorthodox steps include the Fed allowing investment banks to borrow from it directly, previously only possible for commercial banks.
The US economy is continuing its economic downturn although it would be premature to officially declare a recession, the Organisation for Economic Co-operation and Development (OECD) has said.