credit crisis

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Bailout's Execution Draws Bipartisan Ire on Hill

Treasury's point man takes heat from lawmakers

(Newser) - The Treasury Department's radical shift in the execution of the government bailout drew fire from both sides of the aisle in a Capitol Hill hearing today, the Washington Times reports. Neel Kashkari, point man for the $700 billion plan, felt the wrath of the House Oversight subcommittee's ranking Republican, Darrell...

Crisis Looms for Credit Cards
 Crisis Looms for Credit Cards 
ANALYSIS

Crisis Looms for Credit Cards

Soaring defaults could fell normally resilient industry

(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...

Freddie Posts Record $25.3B Loss; Taps $13B Infusion

(Newser) - Freddie Mac, the swamped mortgage giant seized by the government two months ago, asked for $13.8 billion from the Treasury today after a record quarterly loss plunged its net worth into the negative, Bloomberg reports. Sister company Fannie Mae, also under government control, said this week it might need...

Citi to Lay Off 10,000, Raise Credit Card Rates

Banking behemoth will shed 10,000 as it grasps for positive cash flow

(Newser) - Citigroup, seeking profitability after suffering net losses of $20 billion over the past year, is laying off at least 10,000 employees worldwide and raising rates on some credit card holders, the Wall Street Journal reports. Officials were told to trim employee compensation budgets by 25%, allowing managers to minimize...

Bailout Flip-Flop Diminishes Paulson
 Bailout Flip-Flop 
 Diminishes Paulson 
ANALYSIS

Bailout Flip-Flop Diminishes Paulson

(Newser) - Henry Paulson’s recent about-face on his plans for the $700 billion bailout do not bode well for his legacy, write Bloomberg's Rebecca Christie and Matthew Benjamin. Perhaps most damaging is not the change of mind, but what it says about his initial plans. “This is a flip-flop,”...

Cash-Strapped Shoppers Remember Layaway

No-interest credit appeals to consumers

(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...

Fed Won't Say Where $2T in Loans Went

Money is in addition to $700B Wall St. bailout; collateral unclear, too

(Newser) - The Federal Reserve has lent more than $2 trillion to financial institutions under programs without congressional oversight—and will not disclose to whom or under what terms, Bloomberg reports. The loans are separate from the $700 billion congressionally approved bailout package. Investors and citizens are concerned that the collateral given...

No Quick Fix on Economy: Obama
 No Quick Fix 
 on Economy: Obama 
UPDATED

No Quick Fix on Economy: Obama

US 'strong and resilient,' president-elect says at first news conference

(Newser) - Barack Obama addressed the nation today for the first time since his presidential victory, focusing his remarks on the economy, the New York Times reports. “It is not going to be quick and it’s not going to be easy for us to dig ourselves out of the hole...

Credit Crisis 'Froze' Inflation: Dallas Fed Chief

Nevertheless, US is 'navigating the mother of all financial storms'

(Newser) - The credit crisis has had at least one unintended positive effect, stopping a growing threat of inflation, Bloomberg reports. Dallas Fed president Richard Fisher said “inflationary momentum froze in its tracks” as the credit market did the same, but otherwise had a poor view of the economy. “I...

For Wealthy, It's Cool to Be Cheap

Twin concerns drive new consumer psyche

(Newser) - Affluent Americans are folding up the Gucci sunglasses and trying green living's thriftier practices on for size, a response to environmental and economic concerns that's sure to dampen spending for the duration of the recession, the Wall Street Journal reports. "People aren't shopping to feel better," said one...

US May Buy Equity in More Firms

After seeing some thawing in key credit markets, Treasury may expand program

(Newser) - Treasury is considering using some of the $700 billion at its disposal to buy stakes in a range of financial companies beyond banks, the Wall Street Journal reports. The idea comes after seeing measured success in thawing credit markets by taking equity stakes in several banks. Treasury may also abandon...

Credit Crisis Spells Disaster for Private Equity Firms

Debt tightens as profits fall for many acquired companies

(Newser) - After a nearly 3-year buyout spree, private equity firms are facing tightened credit conditions just as slumping consumer spending squeezes many of their acquisitions, the New York Times reports. The leveraged-buyout bubble that culminated in $796 billion in deals in 2007 is bursting, leading to a grim reckoning as firms...

Sorry, Bono: Economy Shelves U2 Tower

Tallest building in Ireland would house band's studio

(Newser) - Not even Bono is immune to the gloomy economy. Plans for a record-breaking Dublin skyscraper partly financed by the band U2 are on hold thanks to the global crisis, AFP reports. The U2 Tower, designed by architect Norman Foster, would be the tallest in Ireland and house a studio for...

MGM Delays New Casinos for Vegas, Atlantic City

After credit downgrade, firm reports 67% decline in quarterly net income

(Newser) - MGM Mirage will suspend work on new casinos in Las Vegas and Atlantic City due to the dismal credit climate, the Wall Street Journal reports. The firm reported a 67% drop in third-quarter net income as the slumping economy quells consumers’ desire to gamble or spend at casino restaurants and...

Fed Rate Cut to 1% Expected
 Fed Rate Cut to 1% Expected 

Fed Rate Cut to 1% Expected

With Inflation fears fading, 'the issue now is how bad the recession will be'

(Newser) - Worries about inflation are taking a backseat to recession fears as the Federal Reserve today is likely to lower its benchmark rate another half-point to 1%, with the possibility it could go to zero by June if the economy doesn’t rebound, reports Bloomberg. “The issue now is how...

As Investors Seek Cover, Central Banks Slash Rates

Seeking to loosen credit, central banks plan another round of cuts

(Newser) - Central banks worldwide are slashing interest rates, attempting to stem the bleeding in financial markets as investors dump holdings, credit remains tight, and currencies spasm in value, the Washington Post reports. The Federal Reserve is set to cut rates for the second time in as many weeks tomorrow, while the...

Gas Prices in Record Fall
 Gas Prices in Record Fall 

Gas Prices in Record Fall

Gas drops 53 cents in two weeks

(Newser) - Gasoline prices have dropped 53 cents in the last two weeks, the steepest decline ever, according to the nationwide Lundberg Survey. The national average price for a gallon of regular unleaded is $2.78, Reuters reports. Wichita, Kansas, has the cheapest gasoline, at $2.26 a gallon, and San Francisco...

Financing Deals Make AIG a Drag on Transit Agencies

With AIG sinking, banks are calling loans to transit agencies

(Newser) - Transit agencies nationwide are facing the prospect of unexpectedly having to repay billions in loans to large banks under financing deals made years ago, the Washington Post reports. Because AIG guaranteed many of the agreements, the insurance behemoth's woes could potentially affect millions of public transit riders as banks worldwide...

Goldman Sachs to Cut Staff 10%
 Goldman Sachs to Cut Staff 10% 

Goldman Sachs to Cut Staff 10%

Restructuring bank will trim 3,000 employees

(Newser) - Goldman Sachs will cut almost 3,300 jobs, or about 10% of the bank's total staff, an insider told Reuters today. Although Goldman has weathered the credit crisis better than its competitors, its transition from an investment bank to a traditional enterprise means that it will have to obey stricter...

Starbucks Helped Brew Meltdown—Just Check a Map

Coffee empire's rise tracked (and fueled) housing's, and store locator mirrors trouble spots

(Newser) - A simple tool could hold the key to predicting where the financial crisis will strike next, Daniel Gross writes on Slate: Starbucks’ Internet store locator. “Having a significant Starbucks presence is a pretty significant indicator of the degree of connectedness to the form of highly caffeinated, free-spending capitalism that...

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