Jim Cramer Blog

The Securities and Exchange Commission is examining major Wall Street banks to determine their vulnerability to home-loan defaults, two people familiar with the accounting inquiry said.

The people, who declined to be identified by name because the inquiry has not been publicly disclosed, described the examination as a routine part of the SEC's oversight authority and said it involved Goldman Sachs Group Inc., Merrill Lynch & Co. and several rival investment banks.
The Wall Street Journal reported the SEC's probe on Friday.
Trouble in the U.S. mortgage market, and a related credit crunch, has rippled across the globe. French bank BNP Paribas on Thursday suspended three securities funds valued at $2.75 billion, saying it could not value them accurately because of problems in the U.S. mortgage market.
Credit is drying up in the mortgage and corporate buyout markets after several years in which lending standards were loosened -- too far, in retrospect, many experts say. With big mortgage-related losses affecting companies as diverse as German banks and Australian hedge funds, investors are uncertain about how far the problems will spread.

Labels: Bear Stearns Companies Inc., BSC, Goldman Sachs Group Inc., GS, LEH, MER, Merrill Lynch and Co. Inc., Morgan Stanley, MS