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In a move sending shockwaves throughout the financial marketplace, Countrywide Financial Corp., the leading US mortgage lender, announced it borrowed $11.5 billion dollars from 40 banks to boost its stressed finances and continue operations as the global financial crisis curbed access to short-term financing. Countrywide says the $11.5-billion line of credit was provided by a… Continue reading Countrywide Borrows Billions to Finance Operations

In a statement released yesterday, New York-based Bear Sterns Cos., the second-largest underwriter of mortgage bonds, announced it is eliminating jobs at two of its divisions. “In the normal course of business Bear Stearns Residential Mortgage Corp. and Encore Credit evaluate market conditions and staffing levels in an effort to identify areas where we can… Continue reading Jobs Cut at Beleaguered Bear Stearns

After U.S. stocks stopped their dramatic slide at the end of the trading day yesterday, the yen fell for the first day this week, giving rise to speculation that investors could gain confidence to take advantage of the drop in higher-yielding currencies to purchase them via loans from Japan. The yen also dropped after days… Continue reading Stock Market Slide Stops, Yen Drops

The no-fault insurance law currently in force in Florida will expire on October 1 after being in effect for 37 years. Unless legislators act quickly, state residents can expect to encounter a slew of uninsured drivers on the road, says the Florida Department of Highway Safety and Motor Vehicles.    Says Wayne NeSmith, president of… Continue reading Clock on Mandatory Personal Injury Auto Insurance Ticking Toward Expiration

The House Committee on Financial Services has taken a major step toward extending the federal terrorism insurance backstop by passing H.R. 2761, the Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA). The Independent Insurance Agents & Brokers of America (the Big “I”) strongly supports the bill, sponsored by Rep. Michael Capuano (D-Mass.) and… Continue reading House Committee Takes Action on Terrorism Insurance Bill as Big “I” Says Bravo

Reinsurer Scottish Re reported investments with subprime exposure of about $2.1 billion, and of Alt-A about $1B, vs. shareholders’ equity of about $1.1 billion. Oppenheimer called the exposure “significant,” and noted that subprime, Alt-A portfolios have seen unrealized losses of about 6.6% of book value. Firm maintains neutral rating, forward estimates. Posted at 10:45 a.m.

The benchmark S&P 500 saw gains for the entire year eliminated when U.S. stocks fell yesterday following a steep drop in shares of Countrywide Financial, prompted by a brokerage downgrade and rumors that the leading mortgage lender in the U.S. was having difficulty raising money in the commercial paper market. The flurry of activity surrounding… Continue reading Mortgage Lender Shares Drop, Erasing S&P Gains

According to Tobias Levkovich, Citigroup Inc. chief equity strategist, the recent credit market woes do not a bear market make. Levkovich says members of the S&P 500, excluding financials, “are sitting on roughly $800 billion of cash, indicating a widespread lack of need for bank loans.” He added that the biggest U.S. companies “control more… Continue reading No Bear Market Here, Says Citi Strategist

A spokesperson said the U.S. Federal Reserve Bank of New York made another cash infusion yesterday into the credit-crunched financial system to serve increased demands for liquidity in light of upset fueled by the high-risk sub-prime mortgage sector. The bank, which manages operations of the short-term federal funds market, injected $7 billion on this occasion… Continue reading Fed Injects More Cash to Meet Liquidity Demands

Looking back to 1998 when the collapse of Long-Term Capital Management LP kicked off a credit crisis, stock market investors should hold onto their U.S. stocks longer than global benchmarks may suggest in the face of today’s subprime mortgage rollercoaster ride, says Credit Suisse Group. Credit Suisse analysts led by London-based Andrew Garthwaite said that… Continue reading Credit Suisse Says U.S. Stocks Safer Than After LTCM