Stories related to: credit market chaos

Students at 2-year and some less competitive 4-year colleges will be having a tougher time finding loans as banks trim the list of colleges they serve, reports the New York Times . In a move that potentially shuts out some of the neediest students, Citibank, JPMorgan, PNC, and SunTrust all say they have cut back their eligible institutions, focusing on upper-tier schools whose students generally borrow more and default less. More »

JP Morgan hopes to find jobs for 5,000 Bear Stearns employees cut when it acquired the brokerage in March, the Financial Times reports. CEO Jamie Dimon is sending letters to rivals and clients, and the company has contacted 1,800 firms urging them to consider former Bear workers. The approach could be used across Wall Street, which has pared 65,000 jobs—and counting—amid the credit crunch. More »

Germany's president, a former head of the International Monetary Fund, blasted the system of financial markets responsible for the global credit crisis as a “monster," Der Speigel reports today. Horst Köhler said the world “came close to a collapse of the global financial markets" as the system "greatly disgraced itself in pursuit of profit. More »

Battered National City—which has seen shares plummet 78% as it's been overwhelmed by the subprime fiasco—is close to a $6 billion bailout funded by some of its largest shareholders and private equity firm Corsair Capital, reports the Wall Street Journal . The infusion for the Cleveland-based bank would be the third rescue package this month for a struggling bank that offers discounted shares to raise capital. More »

General Electric CEO Jeffrey Immelt faced the music yesterday, as his predecessor, Jack Welch, raked him over the coals on his own cable TV network for missing first-quarter earnings forecasts. Immelt admitted GE “let people down” in downgrading its outlook for 2008, the Wall Street Journal reports. But he said he won’t change the direction he’s set for the company, or cave to demand he split it up. More »

Like shoppers stalking deals at Filene’s Basement, savvy Wall Street vulture investors are swooping in to find deals among the carcasses of companies and investments felled by the subprime contagion, reports the New York Times . They're betting big—Blackstone Group just raised $10.9 billion from investors to buy distressed real estate—that many companies had to unload good investments in all the chaos. More »

UBS, one of the banks hardest hit by the subprime collapse with $37.7 billion in writedowns, is under attack from an investor group led by one of its former presidents, reports the Wall Street Journal . The group wants the Swiss banking giant to spin off its investment bank, blaming it for the bank's woes. More »

Top financial regulators today challenged banks to come clean about risks they face, the Wall Street Journal reports. The Financial Stability Forum, a worldwide team of financial honchos—including several central bank chiefs—concluded that “hording of liquidity” was leading to “severe strains” in the lending market. Only greater transparency, they said, could restore lending confidence. More »

The best way for the Fed to help reverse the sagging economy is for it to buy some of the $6 trillion in outstanding mortgage-backed securities that have Wall Street so nervous, investors say. The move would ease the credit crunch but put taxpayers at risk. It’s an option the Bush administration has been reluctant to take, reports Bloomberg. More »

JPMorgan Chase was in negotiations last night to quintuple its bid for Bear Stearns following a storm of angry protests by Bear shareholders over the initial bargain-basement deal for the investment banking giant, reports the New York Times . Under the new deal, JPMorgan Chase would pay $1 billion—$10 a share, up from the initial offer of $2 a share, which represented just one-fifteenth of Bear’s market price. More »