ANALYSIS
Soaring defaults could fell normally resilient industry
Time Nov 14, 08 3:10 PM CST
(Newser)
-
Credit cards may be the next industry to be pummeled by the financial crisis, Time reports. The charge-off rate—money that lenders don't think they'll collect—is set to hit 10% in 2009. That's double the rate of the last decade and amounts to $96 billion in unpaid debt. Typically credit card firms do well in downturns because late fees and higher rates raise revenue. But that equation breaks down if customers start defaulting en masse.
More »
No-interest credit appeals to consumers
MSNBC Nov 10, 08 1:59 PM CST
(Newser)
-
With consumers strapped and credit short, retailers are reviving an older kind of financing: layaway. Although the arrangement was considered obsolete when Wal-Mart closed its layaway department in 2006, retailers such as TJ Maxx, Goody’s, Marshalls and the Burlington Coat Factory have moved to offer the service, especially as the holiday season approaches. MSNBC takes a look.
More »
Untapped market prompts banks to aggressively market plastic
Los Angeles Times Oct 22, 08 1:36 PM CDT
(Newser)
-
Banks are moving to tap China’s lucrative market for credit cards, issuing millions in new plastic in recent years, the Los Angeles Times reports. There are about 100 million credit cards today in China, up from 3 million in 2003. And the market is still tiny, by American standards: The average Chinese consumer has only two cards, while an American has five.
More »
BusinessWeek Oct 10, 08 2:14 PM CDT
(Newser)
-
The credit crisis may force Americans to do something truly drastic: live frugally. Benjamin Franklin-style penny-pinching once defined America, but thrift has gone decidedly out of style in recent times, BusinessWeek reports. "I can't help the economy," says one recent convert to the new frugality. "I've got to help myself."
More »
Longtime exec retires after grabbing timely loan ahead of crisis
Detroit Free Press Oct 10, 08 12:41 PM CDT
(Newser)
-
Ford CFO Don Leclair will retire at the end of the month after 32 years with the company, the struggling automaker said today. Leclair has drawn praise for snagging $25 billion in loans for the company before the credit markets dried up, a move that may ensure Ford’s survival through the crunch, the Detroit Free Press reports. Ford of Europe exec Lewis Booth will replace Leclair.
More »
Georgian war spooked foreign investment, destabilized economy
BusinessWeek Oct 8, 08 4:31 PM CDT
(Newser)
-
The credit crisis has officially reached Russia, revealing just how fragile the Russian economy is, BusinessWeek reports. Stocks fell so much this week that the government today suspended both exchanges to stem further loss. But the country's reliance on foreign cash—disappearing as investors flee—is bound to affect more than stock prices. "The flight of capital has exposed the complete dearth of domestic investment," says a Russian telecom company's director of investor relations.
More »
ANALYSIS
Experts say action is needed, but doubt if it will be enough
New York Times Sep 21, 08 1:49 PM CDT
(Newser)
-
Forget white and blue: Uncle Sam is all red these days after swallowing hundreds of billions in bad mortgages and coughing up billions more to save strapped businesses. As the Feds strategize a solution to the mess, experts are unsure if the plan will work and how much it’ll cost taxpayers, Peter Goodman notes in the New York Times , though there "is wide agreement that a broad intervention is necessary."
More »
Bernanke offers several options for cash-strapped firms
Associated Press Jul 30, 08 11:09 AM CDT
(AP)
-
The Federal Reserve today extended its emergency borrowing program for Wall Street firms through Jan. 30. Originally the program, through which investment houses can tap the central bank for a quick source of cash, was supposed to last until mid-September. Another program, where banks can temporarily swap more risky investments for Treasury securities, also will continue through Jan. 30.
More »
Real-estate
fallout dries up
credit stream
New York Times Jul 28, 08 5:09 AM CDT
(Newser)
-
Reeling from real-estate losses, banks are turning off the credit spigot to loan-seeking businesses, the New York Times reports. The loan reduction means more bad news down the line as money-starved companies begin to cut workers. Banks cut credit nearly 3% over the past year, the most since 2001, according to the Federal Reserve. The shrinking availability has hit companies especially hard as customers facing their own financial struggles horde their pennies.
More »
Third biggest American firm posts dismal second quarter
Bloomberg Jul 18, 08 5:29 AM CDT
(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 in the previous three quarters. Moody's cut Merrill's credit rating on the loss, which exceeded the $1.96-billion loss in the first quarter.
More »
Sinking value of big vehicles crashes auto firm's credit wing
Wall Street Journal May 30, 08 10:18 AM CDT
(Newser)
-
Ford's plans to get back in the black are being forced off the road by woes at its lending arm, the Wall Street Journal reports. The auto giant made a lot of cut-rate loans on trucks and SUVs in recent years and has been unable to recoup losses on bad loans through repossessions because of the plummeting resale value of bigger vehicles.
More »
Can't afford to pay in advance for fuel
Times (UK) May 26, 08 9:32 AM CDT
(Newser)
-
Cash-strapped airlines are now being pressured to pay millions of dollars in advance for aviation fuel, reports the Times of London. Mandatory prepayment for fuel has become common in the US and is now moving to Europe as crude oil prices continue to rise and the solvency of the industry is uncertain. Jet fuel costs have soared 60% since January.
More »
Simple tips to boost that murky rating
Today Show Apr 15, 08 12:19 PM CDT
(Newser)
-
Credit scores are key if you're getting a new cell phone, new home, new car—even a new job. The Today Show offers 7 simple steps to give your score a boost: Fix errors on your reports: A mistake on one report can sink a score. Be timely: Payment history affects about a third of your credit score.
More »
New cars tempt buyers into larger, longer loans that outlast the vehicle
Los Angeles Times Dec 31, 07 9:25 AM CST
(Newser)
-
More and more Americans are entering a cycle of larger, longer, and far riskier auto loans, raising the possibility of a debt crisis similar to the one that has hit the housing market. The Los Angeles Times explores the increasing trend of trading in a used car for a new one—and rolling together old debt and new.
More »
Lenders are tightening credit, raising rates as delinquencies rise
Wall Street Journal Dec 6, 07 6:36 AM CST
(Newser)
-
Consumer auto loans are beginning to show the strain of the subprime collapse, with delinquencies among top-rated borrowers from 2006 rising 55%, to 4.5%, in September. That's the largest month-to-month increase in delinquencies in nearly a decade, the Wall Street Journal reports. Delinquencies among less credit-worthy consumers rose to 12%, the highest level since 2002. Said one analyst, “the numbers will get worse.”
More »