Fannie and Freddie claim first victim

JPMorgan Chase has warned of a $600m hole in its accounts as a result of the crisis surrounding US mortgage lenders Fannie Mae and Freddie Mac. In a sign that the problems at the latter are beginning to contaminate the rest of the financial sector, the Wall Street bank said that it would write down the value of its $1.2bn of preferred stock in the troubled lenders by half. Banks and insurers own most of the $36bn worth preferred shares in Fannie and Freddie, and JPMorgan’s announcement could be the first of many.