Mike Mayo Kills The Rally

Well maybe he did. Stocks were up overseas and flat in pre-market, but the markets have been lower all day ever since Mike Mayo dropped a bomb on the banking sector, saying the credit writedowns were still in the early stages.

The Dow is off 131 to 7,885, while the NASDAQ and the S&P 500 are both off of 2%.

Actually, the banks themselves aren’t getting creamed — at least not as bad as you’d think. Citi (C), Bank of America (BAC), Goldman Sachs (GS) and Morgan Stanley (MS) are each down in the 3%-4% range. Considering how hot much these guys have run, today’s sell off and the severity of Mayo’s report, these declines look pretty tiny.

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