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NEWS ABOUT: subprime mortgages

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Why the CEO Talent Pool Is So Small

As Citi, Merrill searches show, Wall Street is now a tough place to grow managers

(Newser) - With Citigroup and Merrill Lynch both suddenly searching for new CEOs, the Wall Street Journal looks at why the list of contenders for the top jobs at Wall Street's biggest firms is so short. Start with an earn-or-die corporate culture, which taints talented chief executives who fail to deliver in... More »

Same Missteps Felled 2 Wall Street Stars

Prince, O'Neal gambled they could ride out subprime storm

(Newser) - With the CEOs of two financial giants making their exits within a week of each other, the Financial Times looks at the similarities in the undoing of Citigroup's Chuck Prince and Merrill Lynch's Stan O'Neal. Both struggled unsuccessfully to change corporate cultures, making enemies along the way, and both invested... More »

It's Official: O'Neal Out

CEO ousted after subprime writedowns, backdoor merger talks

(Newser) - Merrill Lynch CEO Stan O’Neal is retiring effective immediately, the company announced today, shocking no one. Merrill characterized the ouster as a mutual decision, but massive subprime losses and takeover indiscretions clearly marked O’Neal for the chopping block. Terms of the exit package were not disclosed, but it's... More »

UBS Reports $712M Q3 Loss, $4.4B in Writedowns

Subprime crisis costs bank $4 billion in writedown

(Newser) - The subprime mortgage mess claimed another casualty today: Zurich-based UBS reported its first quarterly loss in nearly five years, a $712 million hit that drove down share prices as much as 1.9%, reports Bloomberg. UBS reported $4.4 billion in losses and writedowns on mortgage securities. And more writedowns... More »

O'Neal Exit Package Is All That's Left

Lawyers crafting golden parachute for Merrill CEO after $8.4B losses

(Newser) - CEO Stan O’Neal has leaped from the flames of Merrill Lynch after its $8.4 billion write-down last week, but nobody yet knows the size of his golden parachute, writes the Wall Street Journal. Teams of lawyers are negotiating an exit package that may exceed $160 million, reflecting 21... More »

Wall Street Watching Fed's High Wire Act

Rate cut expected in unusually tough decision this week

(Newser) - All eyes are on the Fed this week, with Wall Street expecting a quarter-point rate cut when the group meets Tuesday and Wednesday. But the decision is an usually tough one, the AP reports, with the tight rope between controlling inflation and keeping markets fluid more precarious than it has... More »

Existing-Home Sales Plummet Past Predictions

(Newser) - The housing market absorbed more bad news today. Existing-home sales dropped 8% in September, hitting their lowest level since at least 1999, as tighter credit standards kept buyers away. The 5.04 million annual rate was far below projections, bolstering predictions of another rate cut by the Fed next week.... More »

Top Chicago Homebuilder Goes Bankrupt

Neumann becomes second largest builder to fall in subprime collapse

(Newser) - Neumann homes, a top Chicago homebuilder, will file for Chapter 11 bankruptcy protection, the Chicago Tribune reports, making it the second-largest builder felled by the dive in the housing market. The company has laid off all but 20 of its 110 workers. “I’m not overly optimistic about the... More »

Countrywide to Refinance Risky Home Loans

About 80,000 subprime borrowers will get lower rates from the $16B plan

(Newser) - Countrywide, the nation's largest mortgage lender, will refinance $16 billion worth of subprime home loans. The move will allow 80,000 customers with adjustable-rate mortgages to get lower rates, making it more likely that they'll keep their homes. Countrywide will make less money from the new arrangement, but fewer mortgages... More »

Bear Stearns, China's Citic Trade $1B Stakes

Partnership will develop products, services for Chinese and Asian markets

(Newser) - In a welcome boost after this year's devastating subprime losses, Bear Stearns today moved to secure a long-coveted slice of the Chinese market. Stearns and China’s Citic Securities Co. agreed  to invest $1 billion in each other, pooling their Asian resources to develop new products for the Chinese market,... More »

Bank of America Takes 32% Third-Quarter Dive

Investment division, big write downs, sink quarter

(Newser) - Bank of America today reported a whopping 32% drop in third-quarter net income, thanks to steep trading losses, write-downs to cover loan defaults, and larger set-asides to cover credit losses. Unlike many competitors, the nation's second-largest bank hadn’t issued loss guidance. More »

Paulson: Economy in Danger

(Newser) - The ongoing housing implosion poses “a significant risk” to the economy, Treasury Secretary Henry Paulson said in a speech at Georgetown University today, in a sobering about-face from earlier attempts to downplay the crisis. “The ongoing housing correction is not ending as quickly as it appeared,” he... More »

Housing Still a Drag: Fed Chief

Setbacks likely, says Bernanke, who offers no hints on interest rate status

(Newser) - The real estate slump will continue to be a "significant drag" on US economic growth well into next year, said Federal Reserve Chairman Ben Bernanke in his first speech on the economy since August. Recovery from the credit crisis will take time, and setbacks are likely, Bernanke told the... More »

Banks to Form $100B Fund to Back Mortgage Securities

Critics say plan is unnecessary, only helps Citigroup

(Newser) - Citigroup and other major banks are banding together to create a $100-billion fund to buy back shaky mortgage securities in order to contain the threat of their undermining the markets and hurting the economy. The unprecedented project, pooling money from banks like JP Morgan and Bank of America, has been... More »

Subprime Loans Went to Rich as Well as Poor

High-rate mortgages accounted for 29% of all home loans last year

(Newser) - Crunching the numbers on 130 million home loans over the past decade, the Wall Street Journal finds that risky, high-interest loans were extended far beyond the low-income urban borrowers they are usually associated with. Last year, they accounted for 29% of all home loans, up from 16% in 2004. As... More »

Housing Slump Dampens '08 Prospects

Economists cut growth forecast; still predict better rate than '07

(Newser) - Economists cut projections for 2008 growth for a third consecutive month, Reuters reports, signaling the fallout from mortgage woes will be widespread and prolonged. A survey of 52 experts estimated the economy would expand 2.4% next year; they’d predicted 2.6% growth last month and 2.8% the... More »

Dow Breaks 14,000 for 2nd Time

New clarity takes steam out of doomsday scenario

(Newser) - Citigroup and UBS warned of steep third quarter declines today, and the Dow responded by jumping 191.92 points—reacting to new clarity in an uncertain market, the Wall Street Journal reports. The index hit an intraday record—14,091.53—before closing at 14,087.55, only the second... More »

Citigroup Earnings Plunge 60% on Subprime Woes

Company will be latest victim of market turmoil when it reports

(Newser) - Citigroup is the latest big-name victim of the subprime crash, the company announced today, warning of a 60% third-quarter earnings drop. Full earnings will be out Oct. 15, but it appears net income will drop to $2.2 billion from the $5.51 billion reported last year. “Our expected... More »

Swiss Bank Giant Posts Huge Losses Amid Credit Crisis

Biggest loser so far in subprime mess

(Newser) - Switzerland's largest bank, UBS, has become the biggest casualty of the worldwide turmoil in the financial markets, reports the Wall Street Journal. The bank is expected to announced today that it has written off  $3.4 billion in fixed income assets. UBS is projecting third quarter losses of at least... More »

August Home Price Plunge Is Biggest Since 1970

New-home sales also off more than forecast

(Newser) - New-home sales fell 8.3% in August, Bloomberg reports, a greater decline than predicted. Housing prices fell over last year, with the 7.5% decrease the biggest drop since 1970. Sales fell to an annual pace of 795,000, lowest in seven years. And that may not signal the housing... More »

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