Moody's Investors Service raised its loss estimates for $680 billion in U.S. subprime residential mortgage-backed securities issued between 2005 and 2007 and put them on risk for possible downgrade, the latest hit to the ailing financial system.

The ratings agency also said by the end of the year, one-third of subprime borrowers who are currently paying on their mortgages will become delinquent and eventually default, representing 19% of outstanding loans.

In what will be seen by many as die-cast confirmation that the world economy is plummeting towards an economic and corporate implosion of unprecedented proportions, Moody's said it anticipated a tidal wave of defaults was approaching....

This peak is even higher than the peak reached in 1933, when bank after bank throughout America was collapsing, taking hoards of other companies with them....

The report traced the health of the bond market all the way back to the 1920s, and finds that the threat of companies defaulting is more stark now than at any point in that stretch of time.