Citigroup, Merrill seek fresh capital injections Wall Street giants Citigroup and Merrill Lynch & Co. are both negotiating further capital injections from overseas investors as they continue to suffer from the credit market crisis, according to a published report Thursday. Citigroup could get as much as $10 billion from foreign governments and Merrill Lynch is expected to receive $3 billion to $4 billion, with much of the cash coming from a Middle Eastern government investment fund, The Wall Street Journal reported. Both firms are rushing to finalize the deals before they report earnings later in the month, which will likely include further losses stemming from their exposure to mortgage-related investments. The fresh capital would come just weeks after Citigroup, Merrill and others first tapped overseas investors.
Weak holiday sales spark profit warnings U.S. retailers reported disappointing holiday sales in December, which in turn sparked some profit warnings, after promotions, last-minute shopping and gift-card redemptions failed to turn around lackluster performance in the largest sales month of the year. Concerns about higher gasoline prices and food costs as well as declines in the credit and housing markets have reduced shoppers' mall trips and made them tighten their purse strings, analysts said. A lack of must-have fashion items also hurt appetite for apparel buying, they said. Retailers, while trying to keep inventory lean at the start of the season, have been pressured to give more discounts to clear unsold merchandise, pressuring profit margins, investors said.
Tough to pump more oil, even at $100 Oil at $100 a barrel should give exporters every incentive to pump more, but their difficulty in doing so shows the world is struggling to sustain production. A growing number of leading industry figures -- the CEOs of Total and ConocoPhillips among them -- now question mainstream forecasts for supply, suggesting the era of "plateau oil" is nearer than many in the business have admitted. While global oil demand is projected to grow to more than 100-million barrels per day (bpd) later this century, some argue it may not be possible to boost flows beyond the current rate of some 86-million bpd. Supply still falls short even after so-called unconventional oils extracted from tar sands and converted from natural gas are taken into account, said Sadad al-Husseini, a former top official at state oil giant Saudi Aramco.
Corporate Default Risk Rises as Goldman Predicts U.S. Recession The risk of companies defaulting on their debt rose to a record after Goldman Sachs Group Inc. said the U.S. economy is probably slipping into recession. Credit-default swaps tied to Armonk, New York-based MBIA Inc. and U.S. mortgage lender Countrywide Financial Corp. rose to all-time highs, while the Markit CDX North America Investment Grade Index and Markit iTraxx Hi Vol index both jumped to the widest since they were created in 2004. Bond risk soared as Goldman forecast today that the Federal Reserve will need to cut interest rates to 2.5 percent by the third quarter from 4.25 percent now. Contracts on MBIA, the largest bond insurer, widened to distressed levels, according to Phoenix Partners Group. The loss of MBIA's AAA stamp would jeopardize ratings on $652 billion of bonds and threaten its ability to guarantee securities.
Fears of a U.S. recession mount Signs that the United States is facing a hard landing from a serious housing industry crisis multiplied Wednesday as forecasters at a prominent bank said that the world's largest economy was in or near a recession."Recession has now arrived or will very shortly," Jan Hatzius, the chief U.S. economist for the investment bank Goldman Sachs, wrote in a report Wednesday. Goldman is forecasting a "mild" recession contraction lasting two to three quarters.Sentiment has grown markedly in the last month that the U.S. economy is in more serious trouble than previously thought. These fears have taken on new significance politically as presidential candidates on the campaign trail hear voters express mounting concern about the health of the economy.Mindful of the political reality, President George W. Bush this week also acknowledged the United States had weakened considerably.
Fabricated documents raise questions about lender's practices Countrywide Financial fabricated documents related to the bankruptcy case of a Pennsylvania homeowner, court records show, raising new questions about the business practices of the giant mortgage lender at the center of the subprime mess. The documents - three letters from Countrywide addressed to the homeowner - claimed that the borrower owed the company $4,700 because of discrepancies in escrow deductions. Countrywide's local counsel described the letters to the court as "re-created," raising concern from the federal bankruptcy judge overseeing the case, Thomas Agresti. "These letters are a smoking gun that something is not right in Denmark," Agresti said in a Dec. 20 hearing in Pittsburgh.
Will foreclosures spark an arson boom? Faced with foreclosure on her Russellville, Indiana home, Christina Snyder allegedly concocted the kind of plan that now has insurance executives on edge. According to the county prosecutor, the 31-year-old Snyder allegedly offered to pay a neighbor $5,000 to help her burn down her house and make it look like a botched rape attempt - all in order to claim $80,000 in insurance money. Snyder wanted the neighbor to bind her hands in duct tape, write "whore" on her shirt, and then help her escape once the blaze was set, the prosecutor says. The neighbor demurred, instead reporting Snyder to police. With the national foreclosure rate zooming and the real estate market in a two-year funk,
- - - - - - - - - - - - - - - - Archived Page Link
- - - - - - - - - - - - - - - -
RSS
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/quotes_7a.gif)