Fed Steps Up, Palm Faces Down
The Federal Reserve proposes rules to keep home lenders from issuing overly risky mortgages. Palm reports a $9.6 billion loss. And the FCC relaxes rules.
EWS AT A GLANCE
Fed proposes mortgage rules
The Federal Reserve proposed new rules designed to curtail new risky mortgages and help protect subprime and other borrowers from predatory lending practices. The rules, expected to be adopted after a 90-day comment period, require lenders to verify a borrower’s income and assets for high-cost loans and bar subprime mortgages based solely on the house’s value. (The Wall Street Journal) Standard & Poor’s economist David Wyss said the rules are “almost irrelevant” since nobody’s making subprime loans now. (MarketWatch) Meanwhile, RealtyTrac reported today that November home foreclosures were up 68 percent from a year earlier, but down 10 percent from October. (AP in Yahoo! Finance)
Palm reports $9.6 billion loss
Palm Inc., the maker of the Treo smartphone, reported a greater-than-expected $9.6 billion loss in its second quarter. It also issued a dire forecast for the current quarter and said it would not offer guidance for future quarters. (MarketWatch) Palm shares dipped 11 percent, to $5.27, in extended trading after the earnings report. Palm’s earnings were hit by delayed product launches, restructuring costs, and increased competition from Apple’s iPhone and RIM’s BlackBerry. “I’ve been very negative about Palm,” said Global Crown Capital analyst Pablo Perez-Fernandez, “but today’s report stunned even me.” (AP in BusinessWeek.com)
FCC approves two media rules
The Federal Communications Commission, in two 3-2 votes, relaxed rules that prevented ownership of TV stations and newspapers in the same market, and capped the market share of cable TV providers at 30 percent. (The Washington Post) Comcast, with 27 percent of the U.S. cable market, opposed the rule. Both rulings will be challenged in court. The media cross-ownership ruling was more controversial, but analysts didn’t expect it to lead to many new mergers. As newspapers have seen, “synergy is supposed to mean two plus two equals five, but it often equals three,” said media consultant John Morton. (Los Angeles Times, free registration required)
Selling the news, even if it isn’t newsworthy
With 235,000 public relations people clamoring for the attention of 100,000 journalists, Todd Brabender manages to stand out. The owner of a PR firm in Kansas, his accounts include the SummerSled, Litecubes illuminated ice cubes, and the Fish ’n Flush toilet aquarium. Using humor, targeted pitches, and media-friendly savvy, Brabender’s Fish ’n Flush press release has spawned 500 newspaper, TV, and radio stories. “People are skeptical of advertising,” says Lena Fiore, who credits Brabender with half a million sales of her Toilet Tatoo seat covers. But when they read something in a newspaper article, she says, “they seem to believe it whether it’s true or not.” (The Wall Street Journal)
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
MOST POPULAR ON THE WEEK
- 7 ways to be the most interesting person in any room
- What would a U.S.-Russia war look like?
- Sorry Belle Knox, porn still oppresses women
- Who are the real gay marriage bigots?
- Colorado’s new ‘drive high, get a DUI’ commercials are actually pretty clever
- Watch The Daily Show mock Fox News' confused man-crush on Vladimir Putin
- Why is American internet so slow?
- What the collapse of the Ming Dynasty can tell us about American decline
- Why states should stop limiting the alcohol content in your beer
- Religious liberty should be a liberal value, too
Subscribe to the Week