Stocks fell the most in four weeks, with the Dow dropping 206 points (1.6 percent) and financial shares tumbling 3.7 percent. The Wall Street Journal blames the financials drop on investors taking profits they’ve made in the run-up of the last few weeks and on another record for oil prices, but Bloomberg’s lead cause is the Securities and Exchange Commission saying it would implement new disclosure rules for banks, something the Financial Times and New York Times both mention.

The SEC chairman said that in the wake of the run on Bear Stearns, he would implement rules requiring financial firms to report their capital and liquidity (cash availability) levels “in terms that the market can readily understand and digest”, Bloomberg says in a separate report. The SEC also said it would require disclosure of where firms’ risks are concentrated and would increase its staff overseeing investment banks by 60 percent to a still-paltry forty.

Bloomberg has the Hide It Under a Bushel Quote of the Day:

“The market is obviously worried about what will be disclosed,” said Janna Sampson, co-chief investment officer at Lisle, Illinois-based Oakbrook Investments LLC, which oversees about $1.4 billion. “From an investor’s perspective, you want to know the firm you are invested in has a strong capital standing. Why these firms wouldn’t disclose this data is a mystery.”

The NYT is a bit skeptical, saying it spoke to four investors after the market closed who hadn’t heard about the SEC plan, but it drily notes that “Wall Street rarely cheers an increase in regulation.”

The Journal in a separate story inside its Money & Investing section, notes that banks already provide some information about their liquidity, but the SEC would require more. It also says the SEC is upping its “stress testing” of the four biggest investment banks to make sure they are able to withstand shocks like the one that felled Bear.

Working less, but more productive

A good showing by productivity, which rose 2.2 percent from the fourth quarter, wasn’t enough to offset the worries. The year-over-year increase of 3.2 percent was the highest in four years. The Journal on A3 says it shows that companies “are adjusting quickly to the economic slowdown by shedding workers and cutting back on the number of hours worked.”

The WSJ says labor costs showed their smallest up-tick since 2004, saying that “underscored workers’ difficulty in securing higher wages during a slowdown.” The number of hours worked plunged 1.8 percent, the most in five years.

That was counteracted by (more) bad housing news—pending home sales fell to a new low in March and were 20 percent lower than a year ago. Bloomberg quotes an online real-estate data provider as saying home “values” in the first quarter fell to the lowest level in three years.

And the Associated Press in its economic roundup emphasizes news that consumer borrowing soared a much-higher-than-expected 7.2 percent in March, up from 3.1 percent in February, “in further evidence of the squeeze on consumers.”

Wrong numbers

The Journal stuffs on C6 a very interesting story reporting that Wachovia and Washington Mutual may be low-balling their mortgage losses. The paper says the two banks are using federal data that is much more optimistic than the Case-Shiller Home Price Indices, which the other banks use.

As Seattle-based WaMu posted a $1.14 billion net loss for the first quarter, Chief Executive Kerry Killinger used Case-Shiller data to show investors the magnitude of declines in housing prices. But when WaMu assessed the current value of properties backing its mortgages, WaMu used Ofheo data, the presentation’s footnotes suggest…

Some economists and researchers contend that Ofheo home-price data are thin in hard-hit markets like Florida and California, where Wachovia and WaMu each have about half of their home loans.

More, please.

Moody’s blues

Moody’s president Brian Clarkson became the “highest-profile” person to fall in the credit-ratings debacle, and the Journal implies on C1 that he was forced out.

The Journal calls Clarkson “the driving force behind Moody’s Investors Service’s push into lucrative but riskier businesses” like mortgage-backed securities and collateralized-debt obligations and notes that he’s being replaced by an exec from one of Moody’s stodgier, old-line businesses.

In the early 2000s, Mr. Clarkson overhauled the residential-mortgage team and ushered in a new methodology that led to higher ratings for some mortgage bonds and more market share for Moody’s in the area. While the bonds performed well, in later years, people who worked under Mr. Clarkson assigned ratings to complex mortgage bonds that didn’t take into account the likelihood of a national housing price decline and the widespread nature of fraudulent loans that backed some subprime mortgage bonds.

“We were preparing for a rainstorm and it was a tsunami,” Mr. Clarkson said in an interview in late 2007.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.