The news at a glance

Financial crisis: Ex-Fannie, Freddie execs sued; Telecom: AT&T drops T-Mobile merger plans; Euro debt: European investors flee the euro zone; Mobile: Apple wins patent victory over Android; Housing: A new wave of foreclosures ahead

Financial crisis: Ex-Fannie, Freddie execs sued

Six former Fannie Mae and Freddie Mac executives have been charged with fraud for misleading the public about the companies’ exposure to subprime loans, said David S. Hilzenrath and Zachary A. Goldfarb in The Washington Post. The former executives, who are accused of willfully “concealing the amount of risky mortgages” on the books of the home-loan-financing giants, are the “most prominent individuals” to date to be charged with wrongdoing related to the U.S. mortgage meltdown. The Securities and Exchange Commission alleges that in 2007, Fannie Mae “disclosed less than one tenth” of its exposure to subprime loans, which “robbed investors of the chance to make informed decisions.”

The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Telecom: AT&T drops T-Mobile merger plans

AT&T this week shelved its plans to acquire the U.S. operations of T-Mobile after being unable to “overcome stiff opposition” from U.S. regulators, said Michael de la Merced in The New York Times. The decision to drop the merger, which would have created the biggest U.S. wireless carrier, is “a major setback for AT&T,” which sought T-Mobile’s cellular spectrum to “relieve its congested network.” The Justice Department opposed the deal on the grounds that it would raise consumer prices and stifle innovation.

Euro debt: European investors flee the euro zone

Investors in southern Europe are stashing more of their cash outside the euro zone, said Deborah Ball in The Wall Street Journal. Worried that their national banks could collapse or that the euro zone could break apart, people in Greece, Portugal, and Italy are converting their holdings to currencies like the Swiss franc, buying real estate abroad, and setting up trusts in locales such as the Bahamas and Singapore. The capital flight could intensify as fears about the euro’s stability persist, say financial experts. “The atmosphere is tense,” says London-based analyst Marcello Zanardo.

Mobile: Apple wins patent victory over Android

Apple got some support this week for its allegation that “devices running Google’s Android system copy the iPhone,” said Susan Decker in Bloomberg.com. The U.S. International Trade Commission ruled that Apple patents protect some smartphone features, including one that allows users to dial a phone number by tapping it. As a result, some Android smartphones from Taiwan-based HTC, which has the largest share of the U.S. smartphone market, will be banned unless their features are changed by April.

Housing: A new wave of foreclosures ahead

The U.S. “is about to be hit by another surge” of home foreclosures, said Diana Olick in CNBC.com. Foreclosure auctions and new default notices were up sharply in November, suggesting that the backlog of 4 million delinquent home loans could begin moving through the pipeline after the holidays. Foreclosures have been backed up for more than a year following the “robo-signing” scandal, which led to new safeguards and procedural delays. A new wave of distressed homes hitting the market could push U.S. home prices still lower.

Explore More