Stocks slid worldwide, sending the Dow Jones Industrial Average below 7,000 for the first time since 1997, and Treasuries rose after Warren Buffett said the economy is in “shambles” and American International Group Inc. posted the largest corporate loss in U.S. history. Berkshire Hathaway Inc. fell 4.7 percent following the worst drop in book value in Buffett’s career at the company. Citigroup Inc. tumbled 20 percent as AIG posted a $61.7 billion quarterly loss and HSBC Holdings Plc said it needs to raise capital, triggering the worst plunge in U.K. banks since at least 1985. Exxon Mobil Corp., the world’s biggest company by market value, fell as oil slid 10 percent. General Electric Co. sank below $8 for the first time since 1994.

USD and JPY traded higher initially supported by a fresh spike in risk aversion sparked by news that Russia may reschedule some of its corporate debt and a CNBC report which suggests that the bad bank plan may be left out of today’s announcement of the Obama financial stabilization plan.

Transactions in agency MBS by investment managers acting as agents for the System Open Market Account (SOMA).