Merrill suspected of hiding subprime losses
Merrill Lynch has been quietly talking to hedge funds about temporarily buying up to $5 billion in mortgage-backed securities, in what looks like an attempt to put off writing down risky mortgage assets, The Wall Street Journal reported. The Securities and Exchange Commission is examining how Wall Street firms value mortgage securities, and the Merrill transactions are on the SEC’s radar. (The Wall Street Journal) Ousted Merrill CEO Stan O’Neal’s $161.5 million golden handshake—among the 10 largest on record—is also drawing scrutiny from Congress, reviving a Senate bill that expands shareholder power over corporate pay. (Bloomberg)
Chrysler cuts up to 12,000 jobs
Chrysler said it will cut up to 10,000 hourly jobs and 2,100 salaried positions and eliminate four slow-selling models to help speed up its turnaround. (AP in Yahoo! Finance) Chrysler’s monthly sales dropped 12 percent, according to figures released yesterday, while GM and Toyota sales increased. (Reuters) The new layoffs, which add to 13,000 cuts set in February, come less than a week after the United Auto Workers narrowly ratified a contentious contract. The sense of betrayal among Chrysler’s UAW workers is expected to impact Ford in its upcoming UAW talks. “No question this is going to make things tougher,” said one Ford executive. (
New York sues over inflated home loans
New York Attorney General Andrew Cuomo sued First American Corp.’s real estate appraisal subsidiary yesterday for allegedly inflating home values nationwide. The suit says the subsidiary, eAppraiseIT, illegally colluded with Washington Mutual by agreeing to appraise about 262,000 homes for more than their real value, feeding the housing and subprime bubbles. (AP in Cuomo said he didn’t have standing to sue Washington Mutual for its role in what he called an “industrywide” problem. “This is certainly not isolated to New York, and it’s certainly not limited to this particular case,” said Terry Dunkin of the Appraisal Institute. (The Washington Post)
Fighting traffic, then fighting license theft
As New York City weighs copying London’s lauded congestion-pricing scheme to reduce city traffic, London is battling an unintended side effect: a scourge of license plate theft and counterfeiting. Drivers who fail to pay London’s $16-a-day driving fee have their plates photographed, and the plate numbers are used to levy fines. Britain has set new standards for anti-theft plates. But some drivers, including Tory MP Robert Goodwill, are fed up. After ordering plates online with Prime Minister Gordon Brown’s numbers, Goodwill told the press, “If I’d screwed those plates on my car, the fines would be delivered to the doormat of Number 10 Downing Street.” (The Wall Street Journal)