subprime crisis

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Financials Skid, Spark Sell-Off
 Financials Skid, Spark Sell-Off 
MARKETS
Aug 18, 2008 3:26 PM CDT

Financials Skid, Spark Sell-Off

Financials plummet on the prospect of a GSE bailout

(Newser) - The markets took a tumble today as familiar fears about a government bailout of Fannie Mae and Freddie Mac returned to the fore, MarketWatch reports. Led by its financial components, the Dow fell 180.02 to close at 11,479.88. The Nasdaq shed 35.54, settling at 2,416....

Greenspan: Housing Will Hit Bottom in 2009

Skilled immigrants would help end slump, he says

(Newser) - Alan Greenspan said housing prices could continue to edge lower through 2009, but should “stabilize or touch bottom” in the first six months of the year, reports the Wall Street Journal. And, the former Fed chief says, while a government bailout of Freddie Mac and Fannie May was the...

Fannie Misses Estimates, Slashes Dividend
Fannie Misses Estimates, Slashes Dividend
Earnings
Aug 8, 2008 8:37 AM CDT

Fannie Misses Estimates, Slashes Dividend

Stock drops 12% in early trading

(Newser) - Fannie Mae reported its fourth straight losing quarter today, Bloomberg reports, coming in $2.3 billion in the red and slashing its dividend. The $2.51-per-share loss far exceeded the 72-cent average predicted by analysts, much as Freddie Mac surprised investors two days ago. “Neither of these companies have...

2007 Mortgages Failing at Triple the Rate of 2006

Prime loans made in early 2007 are going bad at triple the rate of 2006 loans

(Newser) - Mortgages procured in 2007 are souring at a rate nearly triple that of 2006, reports the Wall Street Journal, suggesting that the wallop to the financial system from forclosures could be far from over. Analysis done for the paper finds 0.91% of the prime loans issued in the first...

Wall Street May Scoop Up Troubled Pension Plans

Businesses stand to benefit, but opponents worry about big guns' motives

(Newser) - Though still smarting from the subprime debacle, some of the Wall Street’s biggest players are lobbying the government to be allowed to buy up and manage some of the $2.3 trillion in US corporate pension funds, BusinessWeek reports. Many businesses, eager to get the plans off their books,...

Freddie Has 4th-Straight Loss as 2nd Quarter Charges Rise

Increase in foreclosures and associated fees, $1B writedown lead to $821M loss

(Newser) - Rising delinquencies and a still-skidding home market combined to make Freddie Mac’s second quarter losses three times worse than analysts predicted, reports Bloomberg. The government-backed mortgage enterprise lost $821 million, or $1.63, in the quarter, prompting it to also announce a third quarter slash in dividends from 25...

Financial Faith Is Crisis' Top Casualty
 Financial Faith Is 
 Crisis' Top Casualty 
ANALYSIS
Aug 4, 2008 2:35 PM CDT

Financial Faith Is Crisis' Top Casualty

One year in, credit crunch has upset all expectations about modern markets

(Newser) - Last summer, central banks injected hundreds of billions of dollars into the financial system, desperate to restore liquidity to battered markets. But by then the credit crunch was on—and after 12 months, it shows no signs of abating. The Financial Times looks at how risky US mortgages set off...

Lenders See New Wave of Prime Defaults

Bigger group of 'good' borrowers now face foreclosure

(Newser) - The flood of foreclosures on subprime mortgages seems to be ebbing, the New York Times reports, but a second, larger group of borrowers—those with better credit—are now expected to default in coming months. A continued weak economy, unemployment, and other economic factors helped to quadruple the percentage of...

Merrill Panic May Mark Bottom of Stock Market
Merrill Panic May Mark Bottom of Stock Market
analysis
Aug 1, 2008 10:30 AM CDT

Merrill Panic May Mark Bottom of Stock Market

Once regaled for cavalier confidence, CEO's chief cuts losses

(Newser) - Merrill Lynch CEO John Thain has seen better days, Floyd Norris writes in the New York Times. He's gone from “cockiness to capitulation. Distinction to desperation.” Thain recently unloaded a bundle of his company’s securities for 22 cents on the dollar and raised $8.5 billion from...

Home Prices Fall Again; Rate of Decline Sets Record

Consumer confidence numbers offer ray of hope

(Newser) - Home prices continued to nosedive in May, a signal that the housing crisis may be worsening and a red flag for the credit markets and Wall Street, reports the New York Times. Every region covered by the S&P/Case-Schiller home-price index showed a drop compared to May 2007, with the...

Gramm Guilty of Sparking Subprime Mess
Gramm Guilty
of Sparking Subprime Mess
analysis
Jul 26, 2008 5:10 PM CDT

Gramm Guilty of Sparking Subprime Mess

Ex-senator still has clout despite dire deregulation

(Newser) - Former Senator Phil Gramm helped create the subprime meltdown, yet faces no punishment—and could even become treasury secretary if John McCain wins in November, David Corn writes in Mother Jones. Eight years ago, a Gramm bill stopped the feds from regulating insurance policies that protected Wall Street securities. These...

A Believer in Hands-Off Now a Defender of Hands-On

Treasury chief Henry Paulson has turned to intervention to calm markets

(Newser) - Treasury Secretary Henry Paulson is in the midst of a reluctant about-face of his economic principles. The Los Angeles Times looks at how Paulson—a former chief executive at Goldman Sachs with a long history of faith in laissez-faire capitalism—has had to become the point man for the Bush...

How Mac Can Get His Groove Back
 How Mac Can Get
 His Groove Back 
OPINION
Jul 23, 2008 1:36 PM CDT

How Mac Can Get His Groove Back

A laundry list of what to change

(Newser) - It's not quite time for John McCain's "obit," Mark Halperin writes in Time, but we're getting there. How the Republican could right the ship:
  • Realize that voters “want an upbeat president”—and stop pointing out his old age.
  • Recognize that Americans care more about mortgages and
...

Credit Woes Move Bank to Offload $2B in Coke Shares

Cola's secret formula kept in SunTrust vault

(Newser) - Continuing credit losses have prompted SunTrust Bank to offload its 43.6 million shares of Coca-Cola, breaking ties with the soft-drink maker that stretch more than 90 years and include a copy of the cola’s secret recipe stored in the bank’s Atlanta vault, the Guardian reports. SunTrust’s...

In Good Times and Bad, Looks Matter
In Good Times and Bad,
Looks Matter
Jul 21, 2008 1:07 PM CDT

In Good Times and Bad, Looks Matter

Execs' trustworthy appearance can mislead consumers

(Newser) - Did so many people believe IndyMac CEO Michael Perry's assurances that his company was doing fine because of his baby face? A forthcoming study suggests that soft features like "large eyes, small nose, high forehead and small chin," engender more favorable bias in viewers, the Washington Post reports....

Failed FDIC-Run Bank Added Fuel to Subprime Fire

Feds seized Ill.-based Superior in 2001, but it continued to write, sell off bad loans

(Newser) - An Illinois bank seized by regulators in 2001 continued to write risky subprime mortgages for months after it was put under the day-to-day supervision of the Federal Deposit Insurance Corporation, the Wall Street Journal reports. Many of the loans—some with interest rates above 12%—have been foreclosed; a Texas...

Bank of America Posts Slide but Beats Q2 Expectations

41% drop in net earnings still better than forecast; shares rise 9.3% pre-market

(Newser) - Bank of America reported a 41% decrease in net income today, beating analyst expectations as writedowns shrank to $1.22 million in the second quarter from $2.81 billion a quarter earlier, reports the Wall Street Journal. The bank also said it expects to make money this year from its...

Economic Recovery to Take Months: Paulson

But banking remains 'safe and sound'

(Newser) - Henry Paulson sought to reassure Americans today that US banking is "sound" despite a growing list of troubled banks, Reuters reports. He also said the economy will stay slow for months, but expressed confidence that Congress will shore up Fannie Mae and Freddie Mac before summer recess. "Congress...

Public Silence Greets Wall St. Blunders
Public Silence Greets Wall St. Blunders
OPINION
Jul 19, 2008 3:10 PM CDT

Public Silence Greets Wall St. Blunders

Small savers are suffering, but giving financiers a free ride

(Newser) - America's financiers have driven the country into crisis with stunning recklessness, James Grant writes in the Wall Street Journal, but public anger seems strangely dormant. Populist politicians railed against Wall Street during past financial crises, Grant notes, but today's politicians appear largely uninterested in taking aim at the easy target.

Investors Fall Out of Love With Banks

Even well-managed regional banks no longer darlings

(Newser) - With the nation's banks under pressure from bad loans, and sources of credit scarce, bank customers aren't panicking, the New York Times notes, but  investors are, fleeing an industry much more accustomed to being a Wall Street darling. Bank shares continued their downward spiral yesterday, with the S&P Regional...

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