Carnage on Wall Street as loans go bad

By Steve Schifferes
Economics reporter, BBC News, New York

SUB-PRIME CRISIS SERIES Special reports from the USA Next: What can be done?

The scale of the losses that will hit Wall Street banks could approach half a trillion dollars as large numbers of sub-prime home loans go bad.

And the carnage in the financial markets could cause a credit squeeze that will dampen economic growth for years to come.

The US sub-prime crisis is leading to a wave of reposessions across the US that is having a devastating effect on the US housing market, and is likely to lead to the halving of the US economic growth rate in the next six months.