Credit Suisse Slide, Foreclosure Aid
February 12, 2008
NEWS AT A GLANCE
Credit Suisse profit falls 72 percent
Credit Suisse reported a greater-than-expected 72 percent drop in fourth-quarter profits, to $1.2 billion, as its investment banking and money-market units wrote down $1.88 billion in debt and leveraged loans. (AP in CNNMoney.com) The writedowns were small compared with those at other banks, but Credit Suisse’s stock dropped in early trading as investors worried it could face further writedowns. “Credit Suisse was unable to avoid the credit market crisis but was clearly less affected than some of its competitors,” said analyst Andreas Venditti at Zuercher Kantonalbank in Zurich. (Bloomberg)
Banks, U.S. prepare new foreclosure plan
The federal government and six big lenders have put together a new plan, called Project Lifeline, to help seriously overdue mortgage holders avoid foreclosure. The plan would give all eligible at-risk homeowners, not just subprime borrowers, a 30-day window to negotiate more favorable loan terms. (AP in Yahoo! Finance) Participating are Bank of America, Citigroup, Countrywide, JPMorgan Chase, Washington Mutual, and Wells Fargo. The move came as an increase in delinquencies on prime loans, mixed with the broader housing slump, further threatens the economy. “This collapse in housing value is sucking in all borrowers,” said economist Mark Zandi at Moody’s Economy. (The New York Times, free registration)
Starbucks signs up AT&T for wireless service
Starbucks dropped longtime wireless Internet provider T-Mobile for AT&T, and changed its pricing so that wireless will be free for all AT&T broadband customers and people using Starbucks gift cards. (The Seattle Times) The price will also drop for paying customers, to about $20 a month for access to AT&T’s 70,000 wireless hot spots worldwide. AT&T will also now have 17,000 U.S. hot spots, the most of any provider. The deal is expected to help revive Starbuck’s stagnating customer numbers. “I think it’s a double positive for both product sales and traffic,” said E.K. Riley Investment analyst Robert Toomey. (AP in BusinessWeek.com)
Too much good living in cars
As if you—or the person driving next to you—didn’t have enough distractions, automakers have been touting their new models as mobile living rooms filled with high-tech video and communication systems. Some 80 percent of crashes are at least partly caused by driver distraction, the National Highway Traffic Safety Administration estimates. Now, with that in mind, car companies are introducing some apparently safer devices, like Ford’s voice-controlled Sync system and a button in a new Nissan minivan that kills all on-board entertainment. “At some point, you need to say time out, no more distractions,” said Nissan’s Bruce Campbell. (The New York Times, free registration)
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