E-Trade Quits Housing, IBM Targets Microsoft
E-Trade quits the wholesale mortgage game amid red ink. IBM finds that "free" can be a power weapon. And balloon vendors are panicking about a different kind of gas shortage.
NEWS AT A GLANCE
E-Trade hit by mortgage slump
Discount brokerage E-Trade Financials cut its profit forecast by 31 percent and said it was exiting the wholesale mortgage business. E-Trade blamed its lowered guidance on the U.S. mortgage debacle, especially on borrowers who had overextended themselves with second mortgages. (MarketWatch) The E-Trade warning precedes earnings reports from several large investment banks this week. Merrill Lynch said it is cutting an undisclosed number of jobs at its ailing subprime mortgage operation, First Franklin—which is now “essentially worthless," said analyst Matthew Howlett at Fox-Pitt Kelton. (Los Angeles Times, free registration required)
IBM gives it away
IBM is joining the growing list of companies offering free office software. IBM's Lotus Symphony desktop software suite—with word-processing, spreadsheet, and presentation applications—will compete with Microsoft's dominant Office software. (Reuters) Microsoft already faces free competition from Google's online Google Apps, and IBM's software is a new version of another free offering, the open-source OpenOffice program—which is now expected to get a boost. "IBM is jumping in with products that are backed by IBM, with the IBM brand and IBM service," said IDC analyst Melissa Webster. (The New York Times, free registration required)
Oil hits another new high
Oil hit a new intraday high of $81.24 this morning, before retreating a little. The record prices are being fed by concerns that a cold winter will deplete tightening stockpiles. Goldman Sachs yesterday predicted that oil would rise to $85 a barrel in the U.S. by the end of the year. (Reuters) But analysts say the higher oil prices probably won't make gas prices rise above their current average of about $2.80 a gallon anytime soon. "If $80 a barrel holds, then it will trickle down to the pump," said energy trader Sal Gilbertie at Fimat in New York. "But I have no faith in it staying up there." (CNNMoney.com)
A threat to birthday parties
Another gas shortage—helium—is sending balloon vendors into fits of anxiety. With delays in new helium plants coming online and older plants offline for maintenance, there's a global run on the gas. "People are panicking and the balloon stores are limiting you to 10 balloons per person," said New York-based balloon vendor Leon Sorin. But helium is also essential to the space program, medical MRI machines, and the semiconductor and microchip industries. "The balloon industry is at the lower end of the food chain," notes Leslie Theiss of the Federal Helium Reserve. (Newsday in Los Angeles Times, free registration required)
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
MOST POPULAR ON THE WEEK
- How academia's liberal bias is killing social science
- Diagnosing the Home Alone burglars' injuries: A professional weighs in
- How Wall Street is chipping away at reform
- Why Pakistan won't hunt down the terrorists within its borders
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- 10 things you need to know today: December 21, 2014
- 43 TV shows to watch in 2014
- How I lost all my money
- Are there dogs in heaven? Let's hope not.
- You should be furious about Hollywood's gutless retreat on The Interview
Subscribe to the Week