A Countrywide Sale, a Mess at Merrill
Bank of America is buying Countrywide Financial for $4 billion. Merrill Lynch reportedly faces $15 billion in mortgage-related writedowns this quarter. And subpoenas are issued in an antitrust probe of Intel.
EWS AT A GLANCE
Bank of America scoops up Countrywide
Bank of America agreed to buy out Countrywide Financial for about $4 billion in stock, in part to save the $2 billion investment it made in the mortgage lender last summer. Merger talk sent Countrywide shares up more than 50 percent yesterday, largely erasing three days of bankruptcy-rumor-fueled losses. (Reuters) Bank of America’s offer is 7.6 percent below yesterday’s closing price. Countrywide was worth $27 billion a year ago. “I hope Bank of America isn’t throwing good money after bad,” said Eric Schopf at Hardesty Capital Management. (Bloomberg) Countrywide CEO Angelo Mozilo could reap $115 million from the buyout. (Los Angeles Times, free registration)
Merrill faces $15 billion writedown
Merrill Lynch will write down a greater-than-forecast $15 billion in mortgage-related loses when it reports quarterly earnings next week, The New York Times reported. Wall Street has been expecting $10 billion to $12 billion in markdowns. (The New York Times, free registration) JP Morgan analysts also estimated today that Citigroup could write down $14 billion next week. “It’s going to be a tough year for investors,” said Hugh Young at Aberdeen Asset Management Asia. (Bloomberg) In other banking news, ailing British lender Northern Rock sold a $4.3 billion mortgage portfolio to JP Morgan to start repaying the Bank of England for a $50 billion bailout. (Reuters)
New York expands Intel antitrust probe
New York Attorney General Andrew Cuomo issued subpoenas yesterday in an antitrust probe of Intel. Smaller rival Advance Micro Devices alleges that Intel has illegally quashed competition by coercing computer makers to shun AMD chips. (The New York Times, free registration) Intel already faces similar antitrust investigations from the European Union, Japan, and Korea, as well as a lawsuit from AMD. But the alleged “predatory pricing and exclusive dealing are a tough case under U.S. law,” says antitrust lawyer John Peirce. (BusinessWeek.com) Wall Street analysts expect Intel to post a 12 percent jump in revenue next Tuesday. (MarketWatch)
Looking for the one that got away
A growing number of middle-aged men are going to extraordinary lengths to track down lost loves—cars they owned decades ago. Some of them hire lost-car detectives, others beg cop friends to run serial numbers. The carsick men are part of a boomer nostalgia wave that has driven the collector-car industry up 60 percent since 2002, to $25 billion last year, and helped bring back the Mustang, Camaro, and Dodge Charger. But most of them won’t find their cars. Dee Cole, 54, has been trying for four years, and is at the point of calling a girlfriend he broke up with decades ago for help. “I’m beginning to think my karma for leaving the girl is never finding the car,” he says. (The Wall Street Journal)
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
MOST POPULAR ON THE WEEK
- Why you should stop believing in evolution
- 10 things you need to know today: August 22, 2014
- 7 of the scariest spiders in existence
- Innocent before proven guilty? The bizarre bipartisan rush to clear Rick Perry
- 4 things NASA can teach you about a good night's sleep
- This is why you can't trust the NSA. Ever.
- 7 grammar rules you really should pay attention to
- Don't listen to Paul Ryan: The GOP is still the party of makers and takers
- Why isn't 'Arkansas' pronounced like 'Kansas'?
- What's wrong with Europe’s economy?
Subscribe to the Week