by Calculated Risk on 7/14/2008 01:24:00 PM

From the WSJ: Regional Bank Shares Crater (hat tip Dwight)

Shares of regional banks dropped sharply following ... a warning from Goldman Sachs about the huge unrealized losses facing banks due to risks in preferred securities issued by Fannie Mae and Freddie Mac.

Comments from Lehman Brothers that beleaguered thrift Washington Mutual Inc. could see $26 billion in total losses from items on its balance sheet and struggling National City Corp. being forced to assert it is still creditworthy only added to the angst.

The losses to banks from Fannie and Freddie preferred securities will probably be significant.

This shift in write downs - from the investment banks to the regional banks - has been heavily advertised. Oh well. I guess people are stunned, but not surprised. (a hat tip to Tanta)