financial crisis

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NFL's Model Is Better Bet Than Big Biz

(Newser) - The business world’s dependence on its own form of gambling—the “expectations,” or stock market—helped fuel the current financial crisis and the dot-com crash, writes Roger Martin in the Financial Times. “Neither would have happened if our business and capital markets theories had been as...

Bernanke: Risks Remain Despite Stress Tests

But Fed chief is encouraged by bank response

(Newser) - Big banks' response to "stress tests" has been encouraging but they will need to watch out for risks not covered by the tests, Ben Bernanke warned regulators yesterday. The Fed chief—signaling that investment giants like Goldman Sachs can expect tighter scrutiny—said banks should self-test for potentially disastrous...

Don't Celebrate Yet: Earnings Are Up, but Not Sales

Though first-quarter profit beat expectations, a growth story is absent

(Newser) - The fact that 66% of American companies beat their first-quarter earnings expectations is good, writes Henry Blodget in Clusterstock, but not as good as it looks. A closer examination of the data shows that while profits increased, revenues did not, and “you can’t fire your way to prosperity....

Stocks, Commodities Plunge
 Stocks, Commodities Plunge 
MARKET Open
May 11, 2009 8:57 AM CDT

Stocks, Commodities Plunge

(Newser) - Stocks plunged at the open, as banks sold shares to raise capital, and consumer and commodity stocks took a pounding, the Wall Street Journal reports. The Dow was down 140, the Nasdaq down 1.8% and the S&P off 2.1. Oil producers were hit hard as crude fell...

Investors Rush Back Into Risky Emerging Markets

After a season of defensive investing, money flows to developing economies

(Newser) - The economic slump may not be over, but investors are piling on risk in emerging markets, driving up stocks in developing nations as they seek the large rebounds that will accompany a global turnaround, the Wall Street Journal reports. The week ending May 6 saw some $4 billion flow to...

Bank Wrangling Softened Stress Test Results

Fed massaged some figures to portray banks as healthy

(Newser) - Some major banks managed to cajole the government into using more optimistic figures in its "stress test" results, insiders tell the Washington Post.  Banks like Citigroup—eager to show they were healthy and didn't need more help from the government—were given credit for pending moves to raise...

Europe's Jobless Thrive as US Counterparts Struggle

European safety nets make joblessness easier, recovery more difficult

(Newser) - On either side of the Atlantic, different narratives are playing out among the unemployed, the Wall Street Journal reports. While Americans left jobless by the recession struggle to pay insurance and bills, Europe’s social safety nets provide many with the majority of their former incomes and cover health-care costs....

Tests Replace 'Uncertainty With Transparency'
Tests Replace 'Uncertainty With Transparency'
OPINION
May 7, 2009 7:56 AM CDT

Tests Replace 'Uncertainty With Transparency'

Tests on the biggest banks will make raising capital, paying it back easier

(Newser) - In an op-ed piece in the New York Times today, Timothy Geithner positions the stress tests—whose results are released officially today—as a way to restore longer-term confidence in the aftermath of the "tentative stability" achieved by the last administration. "We chose a strategy to lift the...

Recession Chic: Quirky Out, Blond In

(Newser) - The economy is in freefall, which makes it a good time to be blond, the Times of London reports. Flip through the latest Vogue, and you’ll see page after page of blond-haired, blue-eyed beauties—a shift from the “quirky” faces sought after in recent years to grab the...

Top Subprime Lenders Owned by Bailout Banks

Analysis of gov't data reveals sources of the economic meltdown

(Newser) - Some 21 of the top 25 subprime lenders that triggered the global economic collapse were either owned or financed by banks that ended up needing bailouts, an analysis by the Center for Public Integrity finds. Among the backers, who make huge profits on the subprime business, were Lehman Brothers, Merrill...

Hiring Healthy, Even During Downturn

Dire employment figures disguise huge amount of vacancies opening up

(Newser) - Grim unemployment figures are disguising the fact that hiring has stayed surprisingly strong in the midst of the worst postwar recession, economists tell the New York Times. In February—long before any hint of recovery emerged—4.8 million workers lost their jobs, but 4.3 million people were hired,...

Brokers Bail on Wall Street
 Brokers Bail on Wall Street 
May 6, 2009 2:46 AM CDT

Brokers Bail on Wall Street

Commissions shrinking as investors turn away from stocks

(Newser) - A rising number of stock brokers are abandoning the industry as markets fall and commissions dry up, the Wall Street Journal reports. More brokers have already departed this year than in any of the last 15 years, and experts expect the exodus to continue as investors shift assets out of...

BofA Still Short Whopping $34B

Fed's findings mean government may end up as BofA's majority shareholder

(Newser) - Treasury Department officials have told Bank of America that it's nearly $34 billion in capital short of a passing grade on its "stress tests," sources tell Reuters. The amount is more than triple earlier estimate of BofA's capital needs, and may force the bank to convert the non-voting...

In Market Hit Early, Signs of a Recovery
In Market Hit Early, Signs of
a Recovery
ANALYSIS
May 5, 2009 8:53 AM CDT

In Market Hit Early, Signs of a Recovery

Some see bottom, others 'fool's gold' in Sacramento real estate

(Newser) - In Sacramento, one of the first US cities to see the housing market crumble, there are glimmers of recovery, the New York Times reports. Sales have jumped 45% from last year, and investors and first-time buyers are on the prowl. “It’s fragile, and it could easily be fleeting,...

Edgy Banks Crack Down on Revolving Credit Lines
Edgy Banks Crack Down on Revolving Credit Lines
ANALYSIS
May 4, 2009 9:04 AM CDT

Edgy Banks Crack Down on Revolving Credit Lines

Shorter loan maturities, higher interest rates make 'safety nets' less safe for businesses

(Newser) - Banks, lashed by the credit crunch and wary of defaults, have shortened the terms on revolving credit lines—typically running for 3 or 5 years—to less than a year, the Wall Street Journal reports. Often a little-used safety net before the recession, so-called revolvers had low interest rates; now,...

Stress Tests Expected to Show Confidence in Banks

Administration ready to say bailout worked

(Newser) - The top US banks may not be as deep in the mud as analysts fear, government "stress tests" out Thursday are expected to show. Officials seem ready to argue that the nation's financial system is recovering and won't require more bailout funds from Congress. "None of these banks...

Citi May Need Extra $10B to Pass Stress Test

Fed delays release of results as banks haggle over initial findings

(Newser) - Citigroup may have to scrape together as much as $10 billion in fresh capital to pass the Fed's stress tests for big banks, insiders tell the Wall Street Journal. The release of the tests—which assess how a bank could weather various dire scenarios—has been pushed back from Monday...

Strapped Art Market Preps for Auctions

Expectations low as auction houses try variety of tactics

(Newser) - After a 7-year boom, art auction houses are struggling as collectors hit hard by the recession close their wallets. Sotheby’s predicts it will pull in $179 million to $256 million at spring sales, compared to $742 million a year ago. As the spring events approach, auctioneers are employing an...

British MPs Blast Bankers For 'Astonishing Mess'

Report by finance committee blames HBOS, RBS for meltdown

(Newser) - Bankers bear the majority of blame for the global economic crisis for having made "an astonishing mess of the financial system," an investigation by the British parliament's finance committee has concluded. The Treasury Select Committee said in a report that bailed-out banks such as HBOS and Royal Bank...

France Steels for Raucous May Day

Rising tide of discontent has many French talking about a revolution

(Newser) - France's traditional May Day marches are expected to be bigger and angrier than ever today, the BBC reports. Unemployment nearing 10% has swelled the ranks of the discontented. More than 300 rallies are planned across the country to protest the government's handling of the financial crisis. Many accuse President Nicolas...

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