Cutting at Banks, Banking on Buyers
Bear Stearns and Credit Suisse both cut mortgage-related jobs Wednesday. U.S. private equity firms J.C. Flowers and Cerberus Capital Management are weighing separate bids for ailing British mortgage bank Northern Rock.
NEWS AT A GLANCE
Mortgage blowout continues
Bear Stearns and Credit Suisse both cut mortgage-related jobs Wednesday. Bear Stearns is axing 310 positions and fusing together its two mortgage units. Credit Suisse is laying off 170 in its mortgage-backed securities business. Morgan Stanley sacked 600 mortgage-oriented employees on Tuesday. (New York Daily News) Meanwhile, Congressional Democrats outlined their plan to help low- and middle-income families weather the subprime mortgage fiasco. They proposed increasing Fannie Mae’s and Freddie Mac’s mortgage portfolio and urged President Bush to appoint a mortgage czar. (The New York Times, free registration required)
Northern Rock on the bidding block
U.S. private equity firms J.C. Flowers and Cerberus Capital Management are weighing separate bids for ailing British mortgage bank Northern Rock. Northern Rock’s shares have dropped more than 75 percent since mid-September, when its near-collapse led to the first bank run in Britain in a century. (The Wall Street Journal) Citibank, hired to advise Northern Rock, offered to help fund a potential buyer. (Reuters) “Without a takeover, it would be very difficult for Northern Rock to run its own business,” said Richard Hunter at Hargreaves Lansdown in Bristol, England. “The brand has been irrevocably damaged.” (Bloomberg)
Airbus insider-trading probe takes off
French stock-market regulators are accusing top executives at European airplane giant Airbus of insider trading. The probe, reported in the French daily Le Figaro, is focusing on 21 top executives at Airbus and its parent company, EADS, as well as major shareholders DaimlerChrysler and defense firm Legardere. Le Figaro is owned by a Legardere rival, Dassault. (Forbes.com) The regulators say that the executives sold shares before reporting a costly Airbus delivery delay in June 2006, and also warned the French government to sell some of its 15 percent stake due to an imminent “zone of turbulence.” (The New York Times, free registration required)
Blogging goes pro. Watch out.
Professional athletes have discovered the blog as a form of personal expression and a professional tool—and the candid, unscripted format has caused some public relations debacles for their teams. Blogging can also cause headaches for brands that endorse the blogging athletes. Like when Washington Wizards guard Gilbert Arenas wrote in his popular NBA blog about an unreleased prototype of an Adidas shoe bearing his signature. “I’m sitting there looking at the shoe like ‘I hope you guys aren’t serious. Because I’m not going to wear this shoe,’” he wrote. “Nobody is going to wear this shoe.” (The Wall Street Journal)
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