Where to begin on a day like today?
* Richmond Fed president Jeffrey Lacker and Fed Governor Frederic Mishkin are both out on the tape with some comments about the economy, lending, and risk. There isn't much new news in what they had to say, but if you're interested, you can check out coverage of Lacker here and Mishkin here.
* A Chinese functionary shook the heck out of the currency markets overnight by talking about the possibility of reserve diversification in that nation. China has accumulated a massive pile of reserves (more than $1.4 trillion and counting) and has been a large buyer of U.S. Treasuries (with about $400 billion at last count). If it does move more money out of the dollar and dollar-based assets, that's yet another negative for the greenback.
* The bond insurers are out pleading their case in the face of a total meltdown in their share prices. Ambac Financial Group said investors are wrongly assuming that mark-to-market losses in their holdings will result in actual claims being paid. Of course, not everyone agrees. Egan-Jones Ratings had some choice comments yesterday about how the insurers face "massive" losses.
* And there are some interesting analyst reports to mention. Royal Bank of Scotland says banks and brokers will have to take up to $100 billion of writedowns on so-called Level 3 assets -- assets whose value is essentially a "guess" based on theoretical estimates the companies holding those assets come up with, not actual market transactions. Comforting, eh? The blame for the writedowns lies with the Financial Accounting Standards Board's rule 157, which you can read more about here if you're looking for something to help you sleep.
Meanwhile, Morgan Stanley is out talking about how credit card companies are the next ones that will have to revise loss estimates higher amid a deterioration in consumer credit quality. That makes sense -- you can't just magically "refi away" your crushing card debt if you have no equity.
* Washington Mutual also said the housing and mortgage markets will continue to stink. And last but not least, JPMorgan Chase said it's not giving up on the SIV bailout fund. CEO Jamie Dimon said "a lot of people are working on it" in a Bloomberg story. I posted some brief thoughts on this M-LEC monster here.
UPDATE: New York Attorney General Andrew Cuomo's appraisal investigation has broadened to include Fannie Mae and Freddie Mac. Lots to follow here. You can read the latest press release here, the Fannie Mae and Freddie Mac responses, and my thoughts on the original investigation news here.