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Markets Dive as HSBC Shuts US Business, Axes 6,100

Banking giant sells record $17.8B in new stock

(Newser) - European and Asian markets took a nosedive today, and HSBC announced it will sell $17.8 billion in new stock in the largest rights issue in British corporate history. Europe's largest bank ended last year in the black, posting a $9.3 billion profit. But HSBC wrote off $10.6... More »

Time Warner Posts $16B Loss on Declining Media Value

Conglomerate takes $25 writedown as publishing, Net assets cheapen

(Newser) - Time Warner reported a shattering fourth-quarter loss of $16 billion, prompted by plunging ad sales and a $25 billion goodwill writedown to reflect the decline in cable, publishing, and Internet assets, Bloomberg reports. While the media conglomerate took a hit from plummeting revenue at AOL and its magazines, rising revenue... More »

Prof Does Math, Finds Banking System 'Insolvent'

(Newser) - A New York University professor who predicted the current economic crisis warns that losses at US banks could climb to $3.6 trillion, leaving the whole system essentially bankrupt, Bloomberg reports. Economist Nouriel Roubini argues that since the system has a base capitalization of just $1.4 trillion, if losses... More »

Fannie Mae Posts Stunning Losses

Lender bled $29B last quarter, dwarfing total bubble gains

(Newser) - Fannie Mae lost more in the third quarter of this year than it gained from soaring house prices between all of 2002 and 2006, the New York Times reports. The massive $29 billion loss, mainly from asset writedowns, means the company may need more than the $100 billion pledged from... More »

Wachovia Takes Massive $23.9B 3rd Quarter Loss

Writedowns lead to $11.18 per share loss; Wells Fargo says merger on track

(Newser) - Wachovia reported losses of $23.9 billion in the third quarter, a whopping hit of $11.18 per share that blew by analysts’ estimates of a 2-cent-per-share loss, reports Bloomberg. But Wachovia’s loss—virtually all tied to mortgages or mortgage-related securities—may be Wells Fargo’s gain. More »

Citi Losses Less than Expected; Merrill Drops $5B

Third quarter earnings show recovering bank, struggling brokerage

(Newser) - A pair of earnings reports from Citigroup and Merrill Lynch for the third quarter shows just how deeply wounded the big brokerage is, while painting a slightly brighter picture for the big bank, reports Bloomberg. Citi, the nation’s largest bank, beat analyst expectations with a net loss of $2.... More »

Markdown Sparked Lehman Meltdown; More to Come

Other firms could follow suit, meaning widespread losses

(Newser) - What caused two venerable investment banks to implode this weekend, and how much more damage can we expect? It started when Lehman Bros. surprised markets by slashing the valuation of its mortgage holdings last week, making downward revisions so steep that "even longtime bears on the stock thought the... More »

Lehman to Sell Off Assets; Faces Record $3.9B Loss

Company to dump commerical real estate holdings, slash dividens

(Newser) - Facing a record third-quarter loss of $3.9 billion, beleaguered investment bank Lehman Brothers is planning a fire sale of assets to help shore up its sagging capital base, reports the Wall Street Journal. The company said it would spin off its commercial real estate holdings, and auction of a... More »

Secret Lehman Sale Talks Fail

South Korean, Chinese investors balk at hefty $5B price for half of troubled bank

(Newser) - Secret talks earlier this month to sell up to half of struggling US investment bank Lehman Brothers to South Korean or Chinese buyers fell apart after last-minutes squabbles over details, the Financial Times reports. The bank, which is expected to announce up to $4 billion in writedowns next month, was... More »

Merrill Aims to Raise $8.5B, Prune Bad Debt

Brokerage announces surprise stock sale, $5.7B writedown

(Newser) - Merrill Lynch announced a surprise stock offering today aimed at raising $8.5 billion for the brokerage, strapped by the mortgage and credit crises, the Financial Times reports. It also said it was writing down a further $5.7 billion in bad debt, and is selling collateralized debt obligations nominally... More »

Ford Posts $8.7B Loss, Will Make Fewer Trucks

Writedowns lead to ugly quarter

(Newser) - Ford Motor Co. lost $8.67 billion in the second quarter and will retool two more North American truck and SUV plants to build small, fuel-efficient vehicles, the company announced today. The net loss includes $8.03 billion in writedowns due to a decline in the value of its truck... More »

Merrill Posts $4.65B Loss in Dismal 2nd Quarter

Third biggest American firm posts dismal second quarter

(Newser) - Merrill Lynch posted a second-quarter loss of $4.65 billion late yesterday, more than twice the second-quarter loss analysts had expected and one of the worst in the brokerage's history. The firm took a hit of $9.7 billion in credit-market writedowns, reports Bloomberg, on top of some $30 billion... More »

FedEx Reports $241M Loss on Fuel Costs, Soft Economy

Spike in costs offset 8% rise in revenue as company revises guidance down for year

(Newser) - Surging fuel costs, softening demand, and retail operation charges—including the cost of renaming its FedEx Kinko’s stores FedEx Office—sent FedEx Corp. to a fourth-quarter loss of $241 million, or 78 cents a share, compared to profits of $610 million or $1.96 a year ago, reports the... More »

Barclays Seeks $7.8B From Sovereign Wealth Funds

UK bank's stock soars as investors support plan to recapitalize

(Newser) - The UK’s fourth-largest bank, Barclays, is looking to raise capital by issuing $7.8 billion in new equity, underwritten by sovereign wealth funds, the London Times reports. The announcement sent shares soaring in trading today. Barclays has been rumored for weeks to be considering a cash infusion, joining a... More »

Lehman Axes 2 Top Execs in Effort to Stem Slide

CFO and COO both get pink slips after quarterly loss

(Newser) - Lehman Brothers, struggling to allay mounting worries about the company's balance sheet, today axed its COO and CFO. The move comes days after the bank reported a $2.8 billion quarterly loss. Joseph Gregory and Erin Callan will both remain at Lehman, but will be replaced at the top by... More »

Citi Pulls Plug on Hedge Fund CEO Founded

Lackluster returns and management defections seal fate of Vikram's Old Lane

(Newser) - Citigroup will close Old Lane Partners, a hedge fund co-founded by CEO Vikram Pandit, after months of lackluster returns and the loss of its top managers, the Wall Street Journal reports. The investment bank bought the fund’s management group for $800 million less than a year ago; Citi will... More »

Stocks Again Stuck in Neutral

Conflicting news on financials hinders the market

(Newser) - The markets finished mixed today as fears over the financial sector clashed with positive economic reports. Moody’s said it may downgrade ratings for Ambac Financial and MBIA because of continued mortgage-related losses, MarketWatch reports, helping the Dow down 12.37 to 12,390.48. The Nasdaq gained 22.66,... More »

Mammoth Writedowns Hammer AIG

Insurance giant posts $7.8B 1Q loss as credit woes continue

(Newser) - American International Group posted a record-breaking $7.8 billion first-quarter loss yesterday, reports the Wall Street Journal. The insurance giant blamed the poor results on the sagging housing market, the credit crunch and the see-sawing stock market. It announced plans to raise $12.5 billion to patch up the damage... More »

UBS to Lay Off 8,000, Add $11.4B to Writedowns

Swiss bank likely to announce cutbacks with earnings

(Newser) - Swiss banking giant UBS will lay off some 10% of its 83,000 workforce and scale back its investment banking arm in an attempt to reassure shareholders that it's taking actions to curtail losses associated with the subprime debacle, reports Bloomberg. Switzerland's largest bank says it will detail a further... More »

Credit Suisse Posts $2.1B Loss

$5.2B in writedowns shake Swiss banking group

(Newser) - Credit Suisse has announced it lost a mammoth $2.1 billion in the first quarter, reports the Financial Times. The Swiss banking group, which until recently appeared to have escaped the worst of the credit crunch, continued to post strong earnings from its private banking sector—but that wasn't enough... More »

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