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Fighting Corporate Politicial and Media Liars

Global debt hit by credit

Recent Econ News

US-China Trade Talks irish times 12-11

US-China Trade Talks BBC 12-12

US-China Trade Talks NYT 12-12

 

Out of control markets threaten economy, june, 2007

crunch

 

BBC, 12-10-07

http://news.bbc.co.uk/2/low/business/

7136505.stm

 

Borrowing in international debt markets slumped by more than half between July and September amid the global credit crunch, a study has suggested.

 

Financial market turmoil saw the value of bonds and notes issued as security on loans fall to $396bn, said the Bank for International Settlements (BIS).

 

Emerging markets in Europe and Asia saw the greatest drop-off as lenders became cagey about releasing funds.

 

The period was dominated by US housing market deterioration, BIS said.

 

Washington Mutual Cutting Dividend and Jobs

By JAD MOUAWAD

NYT, December 11, 2007

 

http://www.nytimes.com/2007/12/11/business/

11lend.html?ref=business

 

 

Washington Mutual, one of the country’s largest lenders, said yesterday that it would exit the subprime lending business, cut its dividend and eliminate 3,150 jobs.

 

The company said it was acting in the face of an “unprecedented challenge” in the mortgage and credit market, which it expected to continue through next year.

 

In an effort to regain liquidity in the face of losses and bad loans next year, the company plans to raise $2.5 billion by selling convertible shares. It will reduce its dividend by nearly three-quarters, to 15 cents a share, from 53 cents.

 

The company said the mortgage market was undergoing a fundamental transformation and predicted a prolonged period of reduced lending. It said national mortgage originations would shrink by 40 percent next year, falling to $1.5 trillion, compared with $2.4 trillion this year.

 

Equity Firm Makes $1 Billion Investment in MBIA

NYT, 12-10-07

http://www.nytimes.com/2007/12/11/business/

11bond.html?ref=business

 

 

 

 

Bank of America to Close Money Market Fund

NYT, 12-10-07

http://www.nytimes.com/aponline/business/AP-BankofAmerica-Fund.html?ref=business

 

Big Banks Scale Back Plan to Aid in Debt Crisis

NYT, 12-10-07

http://www.nytimes.com/2007/12/10/business/

10finance.html?ref=business

 

 

Future of German bank 'in doubt'

BBC, 12-10-07

http://news.bbc.co.uk/2/low/business/

7137036.stm

 

China wholesale inflation at high

BBC, 12-10-07

http://news.bbc.co.uk/2/low/business/

7136161.stm

 

Consensus ahead of US-China talks

BBC, 12-10-07

http://news.bbc.co.uk/2/low/business/

7136915.stm

 

 

Societe Generale in $4bn bail-out

BBC, 12-10-07

http://news.bbc.co.uk/2/low/business

7136308.stm

 

Phone confusion after Bush error

BBC, 12-10-07

http://news.bbc.co.uk/2/low/business

/7136628.stm

 

US homeowners searching for help with their mortgages struggled to get through on a telephone number that President Bush gave them on Thursday.

 

"I have a message for every homeowner worried about rising mortgage payments: the best you can do for your family is to call 1-800-995-HOPE," he said.

 

But those who went in search of hope got a busy signal - the president had given them the wrong number.

 

The number Bush gave was for the Freedom Christian Academy in Texas.

 

The school phone rang non-stop when Bush gave out the number.

 

"I've tried my best to give the correct number to these people when they called," the academy's Ms Karen Pulaski told the Dallas Morning News, having spoken to more than 50 people in an hour.

 

"But it got a little overwhelming because I couldn't do anything except answer these calls."

 

Ms Pulaski later disconnected the phone.

Citi May Write Down $18.7B, Analysts Say

More abstracts from 12-27-07

 

By MADLEN READ, AP Business Writer

Thursday, December 27, 2007

 

http://www.sfgate.com/cgi-bin/article.cgi?file=/n/a/2007/12/

27/financial/f095906S72.DTL&

type=printable

 

(12-27) 13:39 PST NEW YORK, (AP) --

When Citigroup warned in early November that it was likely to write down its portfolio by $8 billion to $11 billion in the fourth quarter because of exposure to bad loans, investors recoiled at the size of the losses. Some now say those early estimates appear drastically understated.

 

Citigroup Inc. could write off as much as $18.7 billion in the fourth quarter, wrote Goldman analysts William F. Tanona, Betsy Miller and Neil C. Sanyal in a note to investors late Wednesday. If it does, they say, the bank may be forced to lower its dividend by 40 percent.

 

Citi has about $55 billion in exposure to subprime mortgages, about $43 billion of which are collateralized debt obligations, or CDOs, that have mortgages underlying them.

 

"We still believe it will be a couple of quarters before the current credit crisis is fully digested by the markets," the Goldman analysts wrote.

 

Already, Citi has been propped up by a $7.5 billion investment from the Abu Dhabi Investment Authority, a sovereign wealth fund that in late November bought a 4.9 percent stake in the bank.

 

But if Citi must write down the value of its portfolio by more than it estimated back in early November — a distinct possibility, given the lack of improvement in the tight credit markets — Goldman analysts said the bank may need to raise an extra $5 billion to $10 billion in cash.

 

A dividend cut is a possibility facing many banks wrangling with their losing investments in subprime mortgages. UBS recently replaced its 2007 cash dividend with a stock dividend, in a cash-raising effort that also included selling a $9.75 billion stake to a Singapore fund, borrowing about $11.5 billion from outside investors and selling treasury shares.

 

CIBC World Markets Corp. analyst Meredith Whitney has said for months that Citi's dividend should be on the chopping block. Earlier this month, she wrote that along with cutting the dividend, Citigroup should raise at least $30 billion in additional capital and sell at least $100 billion in assets.

 

Goldman increased its estimate for Citi's fourth-quarter loss to $1.33 per share, from 52 cents per share, based on the higher writedown prediction. Analysts polled by Thomson Financial, on average, predict a loss of 63 cents per share for the fourth quarter, which ends Monday.

 

The Goldman team also said they expect an additional $11.5 billion write-off from Merrill Lynch & Co., and increased their loss estimate for the broker to $7 per share for its fourth quarter from a loss of $1.50 per share. Wall Street, on average, expects Merrill to report a loss of $2.78 per share, according to Thomson Financial.

 

Goldman analysts also predict a $3.4 billion writedown at JPMorgan Chase & Co., and cut their profit estimate to 65 cents per share from $1.04. Analysts, on average, see JPMorgan posting a profit of $1.03 per share, according to Thomson Financial.