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Wall Street Journal
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Jan 17, 08 12:33 PM CST
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After largely dodging the subprime bullet that tore through most of Wall Street’s big banks, JP Morgan Chase is looking to make a move, the Wall Street Journal reports. Buoyed by three years of cost cutting and refocusing its business, Morgan has nearly doubled its mortgage market, is flush with cash, and eager to expand through acquisition.
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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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New York Times
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Jan 16, 08 7:51 PM CST
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Ben Bernanke insists he won’t take sides in a congressional fray over how to revive the nation’s flat-lining economy. But the Fed chief says he will support an economic stimulus package—be it GOP tax cuts or Democrats' increased spending—as long as it is quick and temporary, the New York Times reports. Lawmakers are scrambling to devise ways to ward off a recession, and Bernanke testifies before a House panel tomorrow.
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Reuters
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Jan 16, 08 4:23 PM CST
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America’s spirits are sinking along with the economy, a new poll says. The Reuters/Zogby mood index fell from 97.3 to 94.2 this month, the lowest mark since polling began in July. The poll found that 48% of Americans expect a recession, up from 43% last month, and two-thirds think the US is headed in the wrong direction.
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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 12:20 PM CST
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Paulson & Co. made a fortune as the mortgage crisis unfolded, and now the hedge fund has hired the man some say caused the meltdown. Alan Greenspan, whose actions as chairman of the Fed have been under fire lately, today agreed to advise the firm, which saw one fund rise 590% on bearish housing plays and is betting things get worse, the Wall Street Journal reports.
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Bloomberg
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Jan 15, 08 8:42 AM CST
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Retail sales fell 0.4% in December, an unexpected drop that capped off retailers’ worst year since 2002 and is sure to fuel rampant recession fears. “Consumer spending slowed down pretty dramatically,” one economist tells Bloomberg. “We are kind of flying very close to a stall speed.” Prognosticators had expected sales to hold steady after November’s revised 1% gain; the lag suggests that gas prices, the housing slump, and the weak job market may be catching up with consumers.
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Wall Street Journal
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Jan 15, 08 6:05 AM CST
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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
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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 8:28 AM CST
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Wall Street’s tarnished image is taking another hit as the SEC takes a look at whether Merrill Lynch put its own trades ahead of those from clients, specifically mutual-fund operator Fidelity Investments, a practice known as front-running, reports the Wall Street Journal . The probe is the newest development in a broader look at improper information sharing on Wall Street.
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Wall Street Journal
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Jan 14, 08 7:28 AM CST
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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 13, 08 7:41 AM CST
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It may already be too late to quickly stop the economic tailspin triggered by the implosion of the housing market and booming energy prices, several experts believe, reports the New York Times . Perhaps the best that can be done is to make the crunch hurt a little less. “The question is not whether we will have a recession, but how deep and prolonged it will be,” said one analyst.
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New York Times
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Jan 12, 08 4:35 PM CST
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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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