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CNN
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Jan 17, 08 10:50 AM CST
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The country needs a federal stimulus package ASAP, Federal Reserve Chairman Ben Bernanke told the House Budget Committee today, advocating immediate legislation designed “so its effects on aggregate spending are felt as much as possible within the next 12 months.” But he said the package should be “explicitly temporary,” to avoid unwanted long-term stimulus and an undue deficit bulge, CNNMoney reports.
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Bloomberg
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Jan 17, 08 6:31 AM CST
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Merrill Lynch reported a fourth-quarter loss of $9.8 billion, or $12.01 a share, nearly triple the per-share loss most analysts predicted, reports Bloomberg. It was the second straight losing quarter for the nation’s largest broker, and capped the company’s first full-year loss since 1989. Merrill said it took $11.5 billion in writedowns on subprime mortgage-related securities.
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Wall Street Journal
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Jan 16, 08 12:02 PM CST
(Newser) -
The subprime collapse has US financial institutions in uncharted waters—asking for help from foreign investors and governments, the Wall Street Journal reports. Citigroup, Merrill Lynch, and Morgan Stanley all have recently sought bailouts, a dramatic switch from a tradition that saw US banks coming to the “rescue of nations and businesses across the world."
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Bloomberg
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Jan 16, 08 7:03 AM CST
(Newser) -
Subprime mortgage writedowns of $1.3 billion cut deeply into better-than-expected revenue gains at JP Morgan Chase in the fourth quarter, leaving the nation’s third-largest bank with net income of $2.97 billion, or 86 cents per share, a 34% drop from a year ago, reports Bloomberg. The writedown is a pittance compared to Citigroup’s $18.1 billion announced yesterday.
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Wall Street Journal
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Jan 15, 08 6:05 AM CST
(Newser) -
Merrill Lynch has reached into the deep pockets of foreign investors once again, pulling in a $6.6-billion lifeline today from a consortium of investors that include Japan’s Mizuho Financial Group and the Kuwait Investment Authority, the Wall Street Journal reports. In December, Merrill received a $5-billion cash infusion from a fund run by the government of Singapore.
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Bloomberg
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Jan 15, 08 6:03 AM CST
(Newser) -
Citigroup announced $18 billion in writedowns and a $9.83-billion fourth-quarter loss today as a relentless torrent of mortgage defaults has brought the banking giant to its knees. The $1.99-per-share loss is the largest in Citi’s 196-year history, Bloomberg reports. Citi, struggling to recapitalize, also reported US and foreign investors—including Kuwait and Singapore—have agreed to a $14.5-billion cash infusion.
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Wall Street Journal
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Jan 14, 08 7:28 AM CST
(Newser) -
On the eve of Citigroup’s fourth-quarter earnings announcement, the Chinese government appears to have raised objections to China Development Bank's purchase of a $2 billion stake in the struggling financial giant, reports the Wall Street Journal . The proposed deal, reported by the Journal over the weekend, is part of an $8-billion to $10-billion infusion Citi has been trying to put together from a number of foreign investors.
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New York Times
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Jan 12, 08 4:35 PM CST
(Newser) -
Prosecutors are probing Wall Street banks to see if they ever revealed the risky nature of certain subprime mortgage investments, the New York Times reports. Industry experts are accusing the banks of turning high-risk loans, called exceptions, into investments without divulging details to investors and credit-rating agencies. One probe, led by New York Attorney General Andrew M. Cuomo, could lead to charges within weeks.
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Wall Street Journal
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Jan 10, 08 3:21 PM CST
(Newser) -
Bank of America is in advanced talks to buy troubled Countrywide, the Wall Street Journal reports. The Charlotte-based bank could be on the brink of acquiring the US' largest mortgage lender, whose market value has plummeted to $3 billion—about 2 months' profit for BofA—as foreclosures continue to dent profits. It's still unclear if the Federal Reserve would approve of an even-more-giant BofA, the second largest bank in the nation.
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Wall Street Journal
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Jan 10, 08 7:23 AM CST
(Newser) -
Merrill Lynch and Citigroup, which have already tapped foreign investors for billions of dollars to help bail them out of the subprime debacle, are headed back to the well, reports the Wall Street Journal . Merrill is seeking some $4 billion more, Citi up to $10 billion—all expected to come from foreign governments—to help recapitalize coffers stripped by writeoffs the past two quarters.
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Bloomberg
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Jan 9, 08 1:40 PM CST
(Newser) -
After its stock plunged yesterday on rumors it might declare bankruptcy, mortgage giant Countrywide Financial was its shares fall to a 12-year low today on news that foreclosures and late payments were up last month, Bloomberg reports. The subprime collapse has forced the company to lay off thousands, and it's under investigation by two states and the federal government.
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Wall Street Journal
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Jan 8, 08 7:11 AM CST
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Add Bear Sterns CEO Jimmy Cayne's to the list of rolling heads in the subprime mortgage market collapse, reports the Wall Street Journal . Cayne, 73, has been the target of board and shareholder angst over the 53% drop in the bank’s stock last year—the largest of any of the big securities firms. He began informing directors yesterday of his decision.
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Wall Street Journal
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Jan 7, 08 9:17 PM CST
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Treasury Secretary Henry Paulson advised the mortgage industry today to give help to millions of financially stressed homeowners whose mortgages are set to rise. His comments signal that the Bush administration is starting to push lenders to expand relief beyond subprime borrowers to homeowners with other adjustable-rate loans, reports the Wall Street Journal .
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