Tanking Made Simple

Slipped in between the news of the Freddie Mac and Fannie Mae debacle was this little bit of news from Wall Street:

The financial sector took another beating yesterday as concern mounted over the vulnerability of regional banks in areas hit hard by the housing downturn, analysts said. The pressure on financial stocks is "almost unmerciful," said Andy Brooks, head equity trader at T. Rowe Price in Baltimore. "There is a lot of anxiety, and it is being fueled by a lot of people. For those of us who are longer-term investors, it's been a challenging time."

Trading in National City, a Cleveland-based bank, was halted early yesterday after the price fell more than 20 percent. In a statement, the bank said its capital position was strong. Its stock closed down 15 percent on the New York Stock Exchange after trading resumed.

This is actually quite troubling news for a bank with a very large presence in the Pittsburgh Region. Indeed, through a series of acquisitions and mergers throughout the 80s and 90s, it became our 2nd largest bank (behind PNC).

The company has already been hit hard by the mortgage turbulence, so the situation (which was bad before) seems down right scary now.