NEWS AT A GLANCE
NBC scores with Olympics; China, less so
NBC pulled in at least $100 million in profit from its TV coverage of the Beijing Olympics, as more than 200 million viewers tuned in, a new record. That success was partly due to NBC itself, which persuaded the International Olympic Committee to move swimming and gymnastics up to the morning hours in China, so they would be live during U.S. prime time, and to hold the games in August, so as not to compete with sports like NFL football. (The New York Times) China also used the Olympics to successfully show off its economic progress. (The Wall Street Journal) But hosting the games, especially the measures to clean up Beijing’s air by shutting down factories, could shave 3 percent from China’s $585.3 billion GDP this year. (Bloomberg)
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Canada’s Precision Drilling buys U.S. oil firm
Precision Drilling Trust, Canada’s largest oilfield-services provider, agreed to buy Houston-based drilling firm Grey Wolf for about $2 billion. Precision will get 121 rigs in the deal, most of them drilling for natural gas in the U.S. Grey Wolf had rejected a $2.2 billion bid from Precision in June, when Grey Wolf was pursuing the buyout of Basic Energy Services. (Bloomberg) Grey Wolf shareholders rejected that deal in July. (Reuters) Domestic natural gas prices have fallen 42 percent since early July, in part because an 8.8 percent increase in domestic gas production has started to be felt in the markets. That rate of increase in production was last seen in 1959. (The New York Times)
Danish Central Bank buys failing lender
Denmark’s Central Bank is the lead buyer for Danish lender Roskilde Bank, paying $890 million in cash and assuming $7.36 billion in debt, after no private purchaser came forward. The Danish Central Bank said it is stepping in to avoid “considerable contagion throughout the financial sector.” Hit by a slumping real estate market, Roskilde has lost 88 percent of its market value since April 2007. (Bloomberg) In Germany, meanwhile, No. 2 bank Commerzbank is reportedly working to buy No. 3 rival Dresdner Bank by the end of the week. (Reuters) And in the U.S. banking sector, the FDIC took over Kansas regional bank Columbian Bank and Trust Company, the ninth FDIC-insured bank to fail this year. (AP in CNNMoney.com)
FBI warned of mortgage mess, but didn’t act
The Federal Bureau of Investigation predicted the mortgage crisis as early as September 2004, but failed to do much to prevent it. The FBI is supposed to watch out for and prosecute illegal banking and other white-collar activity. By 2004, FBI officials had noticed that the then-booming mortgage business was attracting some shady dealers, and noted that, if left unchecked, the mortgage fallout could be as bad as the savings-and-loan bailout of the 1980s and early 90s. As it turned out, the cost of the global mortgage meltdown dwarfs that of the S&L crisis. The FBI blames its inactivity on a shift in resources away from white-collar crime. “Nobody wanted to listen,” said Sharon Ormsby, the head of the FBI’s financial crimes section. (Los Angeles Times)
