| Fed boss says 2008 outlook worse
In particular, Mr Bernanke highlighted the impact the slowing housing market, and specifically the sub-prime mortgage crisis, was having on the wider economy. With banks having to write off billions of dollars of investments linked to sub-prime debt - loans taken out by people with bad or little credit histories - this has made them reluctant to lend, limiting the availability of credit, Mr Bernanke explained. He added that the financial situation "remains fragile, and many markets remain impaired", saying that much uncertainty remained about the exposure of major banks to the credit crisis. But he said that while banks had become more restrictive in their lending, it was in their best interest to find a systematic way to restructure loans. "This is not a situation that can be dealt with one mortgage at a time," he said.
Earnings roundup: Parker Hannifin
CLEVELAND (AP) _ Parker Hannifin Corp., which makes motion-control systems, said Thursday its second-quarter profit rose 9.8 percent on higher industrial sales in North America and internationally. MEMPHIS, Tenn. (AP) _ Regional bank First Horizon National Corp. swung to a loss during the fourth quarter due to rising loan-loss reserves, a reduction in the value of mortgage servicing rights and charges stemming from an earnings enhancement plan. DALLAS (AP) _ Business and consumer banking services provider Comerica Inc. said Thursday its fourth-quarter profit fell 60 percent year-over-year as bad debt more than quadrupled on the continued downturn in Michigan and California real estate development markets. NEW YORK (AP) _ BlackRock Inc.'s fourth-quarter earnings surged as investors shifted money to safer harbors and increasingly sought financial advice amid the ongoing credit crisis, the investment management firm said Thursday.
Lenders' pitches aiming higher
Despite the mortgage meltdown, the blizzard of advertising for home loans continues.
With the subprime market in tatters in the wake of record defaults and foreclosures, fewer pitches scream "Bad credit? No problem!" Instead, lenders struggling to remain profitable are targeting people who have good credit and plenty of home equity.
With fewer homes being sold -- and, therefore, fewer loans taken out to finance purchases -- mortgage firms that have survived the subprime shakeout are focusing their marketing on persuading homeowners to refinance.
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Readers offer ideas to WaMu
Oh sure, readers said, there are lots of quick-fix, desperation moves Washington Mutual Inc. could try to rescue itself from its current predicament. Lay off more managers and employees. Change the name. "How about topless tellers and a cover charge?" one suggested. But if Washington Mutual is serious about restoring faith with investors and customers and reversing the string of financial mishaps that will lead to a loss for the fourth quarter, then it will have to master two simple and basic skills: managing risk, and being the kind of customer-oriented company it was once reputed to be. Tuesday's column challenged P-I readers to diagnose the causes of the ills that now beset the venerable Seattle-based company, and to propose some solutions. They did not disappoint, coming through with analyses that were perceptive, informed and often caustic (terms such as "fiasco" were frequently used).
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