After the Close: Financial Market Update-Wed., Oct. 22

Investors may not be worrying so much about the credit panic — no longer a panic, now just “credit malaise” — but they do seem to be concerned about the lousy third-quarter numbers companies are turning in, and gloomy profit forecasts, as the world enters a recession. If Wall Street worried about such things, they would also take note of the fact that jobs are being shed like autumn leaves. The Dow Jones Industrial Average ended the day at its lowest point in five years, at 8519.21, representing a retreat of 514.45 points, or 5.69 percent. The Standard & Poor’s 500 actually did worse, losing 6.1 percent, also to its lowest level in five years. The Nasdaq merely lost 4.77 percent.Failed insurer AIG has decided to freeze more than $600 million in compensation “due” to its execs, including $19 million “due” to former CEO Martin Sullivan. New York Attorney General Andrew Cuomo had insisted, under pain of all the legal action he could think of, that AIG do this. Presumably, Sullivan still has some of the $14.3 million he made in 2007, while he still was captain of the good ship AIG and steaming proudly toward that pesky iceberg.Here’s a surprise: Wachovia Corp. lost boxcars full of money in 3Q08, some $23.9 billion. The total included a $6.6 billion writeoff for losses associated with the bank’s ill-advised purchase of Golden West Financial about two years ago. The lost amounted to a whopping $11.18 a share, compared with income of about 85 cents a share in the third quarter of 2007. Moreover, the company projects $26.1 billion in mortgage-related losses next year. So is Wells Fargo still glad it won its struggle with Citigroup over who would acquire Wachovia? Wells Fargo chairman Dick Kovacevich says yes, and even offered some optimism during a speech last night to Commonwealth Club of California in San Francisco, as reported by the Sacramento Business Journal. “There may be doubt how long [the recovery] will take, but it will get done sooner than most people think.” According to the British Bankers’ Association, three-month LIBOR dropped overnight to about 3.54 percent. The last time the benchmark rate was so low was September 24, and that’s more 100 basis points below the peak of October 10. One-month and overnight LIBOR were down as well. Get in line: Pakistan is going to ask the International Monetary Fund for a loan or two. Reuters notes that the country needs some $10 billion to $15 billion to cover its current account financing gap.Argentina could be next. Its stock market fell dramatically–16.4 percent, the sharpest drop since 1990–on word that the government was planning to use 10 private pension funds to meet its immediate financing needs (or “grab the cash,” as critics said). More broadly, investors are worried that Argentina will default on its loans for the second time in less than a decade.