Market massacre; Fed update
* Freddie Mac shares are now down 33% on the day, the worst one-day plunge since the company went public in 1988, per Bloomberg.
* The spread between yields on agency (FNM and FRE) mortgage-backed securities and Treasuries has widened to about 171 basis points. That's the worst since the depths of the last bear market in October 2002.
* An S&P index that tracks the home building sector was recently suffering its worst single-day plunge since 2001.
Is this the mother of all plunges unfolding? Or are we set up for the mother of all reversals? It's worth pointing out that rumors of an emergency Fed rate cut made the market rounds overnight. That helped knock another leg out from under the dollar, with the euro breaching the $1.48 level earlier today. Meanwhile, around 2 p.m., we'll get the minutes from the Fed's October 30-31 meeting -- and the Fed's first set of expanded economic forecasts and discussions.
UPDATE: Meeting minutes (PDF link) suggest Fed members believed the economy was improving, but that weakness could redevelop if financial market turmoil returned. In case you haven't noticed, it has. Meanwhile, the Fed's forecasts for 2008 growth and core inflation were lowered slightly.