NEW YORK, Jan 1 (Reuters) - Wells Fargo & Co (WFC.N) said it has completed its roughly $12.7 billion purchase of Wachovia Corp, a big bet that it properly assessed the risks in Wachovia's huge book of mortgage and real estate loans. The merger closed on Wednesday and more than doubles the size of Wells Fargo, creating the fourth-largest U.S. bank by assets. Wells Fargo also has the nation's largest branch network, with more than 6,600 offices in 39 states and Washington, D.C., and one of its largest retail brokerages. San Francisco-based Wells Fargo agreed on Oct. 3 to buy Wachovia, beating out a smaller bid by Citigroup Inc (C.N) for part of Wachovia. Citigroup's bid included government backing, while Wells Fargo's did not. Wells Fargo said Wachovia branches will keep their brand name at least for the "near future."
NEW YORK, Jan 1 (Reuters) - Wells Fargo & Co (WFC.N) said it has completed its roughly $12.7 billion purchase of Wachovia Corp, a big bet that it properly assessed the risks in Wachovia's huge book of mortgage and real estate loans.
The merger closed on Wednesday and more than doubles the size of Wells Fargo, creating the fourth-largest U.S. bank by assets. Wells Fargo also has the nation's largest branch network, with more than 6,600 offices in 39 states and Washington, D.C., and one of its largest retail brokerages.
San Francisco-based Wells Fargo agreed on Oct. 3 to buy Wachovia, beating out a smaller bid by Citigroup Inc (C.N) for part of Wachovia. Citigroup's bid included government backing, while Wells Fargo's did not. Wells Fargo said Wachovia branches will keep their brand name at least for the "near future."
Jan. 1 (Bloomberg) -- Merrill Lynch & Co.'s 95-year run as an independent company is coming to an end as Bank of America Corp. completed its acquisition of the broker for about $33 billion in stock. Bank of America, the biggest U.S. home lender, closed the purchase today, the Charlotte, North Carolina-based company said in a PRNewswire statement. Scana Corp., South Carolina's biggest utility owner, will replace New York-based Merrill Lynch in the Standard & Poor's 500 Index. Merrill Lynch was founded by Charles E. Merrill in January 1914 and evolved into the world's biggest brokerage, with an army of 17,000 financial advisers. After more than $50 billion of losses and writedowns tied to the collapse of the U.S. subprime mortgage market, Merrill agreed in September to a sale, escaping the fate of bankrupt Lehman Brothers Holdings Inc.
Jan. 1 (Bloomberg) -- Merrill Lynch & Co.'s 95-year run as an independent company is coming to an end as Bank of America Corp. completed its acquisition of the broker for about $33 billion in stock.
Bank of America, the biggest U.S. home lender, closed the purchase today, the Charlotte, North Carolina-based company said in a PRNewswire statement. Scana Corp., South Carolina's biggest utility owner, will replace New York-based Merrill Lynch in the Standard & Poor's 500 Index.
Merrill Lynch was founded by Charles E. Merrill in January 1914 and evolved into the world's biggest brokerage, with an army of 17,000 financial advisers. After more than $50 billion of losses and writedowns tied to the collapse of the U.S. subprime mortgage market, Merrill agreed in September to a sale, escaping the fate of bankrupt Lehman Brothers Holdings Inc.
Jan. 1 (Bloomberg) -- Treasuries recorded their biggest annual gain since 1995 as falling stocks and frozen credit markets drove investors to the relative safety of U.S. government debt. Yields of all maturities touched record lows as financial firms' losses in the credit crisis exceeded $1 trillion and policy makers made unprecedented moves to rescue the country from recession. Foreign companies and institutions increased their stake in U.S. government debt by 29 percent in the first 10 months of the year, Treasury Department data shows. "It's one heck of a run for 2008," said George Goncalves, chief Treasury and agency strategist with Morgan Stanley, one of 17 primary dealers that trade with the Fed. "The capital markets are going to be about the Treasury market next year."
Jan. 1 (Bloomberg) -- Treasuries recorded their biggest annual gain since 1995 as falling stocks and frozen credit markets drove investors to the relative safety of U.S. government debt.
Yields of all maturities touched record lows as financial firms' losses in the credit crisis exceeded $1 trillion and policy makers made unprecedented moves to rescue the country from recession. Foreign companies and institutions increased their stake in U.S. government debt by 29 percent in the first 10 months of the year, Treasury Department data shows.
"It's one heck of a run for 2008," said George Goncalves, chief Treasury and agency strategist with Morgan Stanley, one of 17 primary dealers that trade with the Fed. "The capital markets are going to be about the Treasury market next year."
Jan. 1 (Bloomberg) -- Commodity prices in 2008 plunged the most in five decades as demand for energy, metals and grains tumbled in the second half because of the recession. From July to December, the slumping economy drove crude oil, gasoline, copper, corn, and wheat down from records in the first half. In 2008, the Reuters/Jefferies CRB Index of 19 raw materials fell 36 percent, the most since the gauge debuted in 1956, to 229.54. It rose to a record 473.97 on July 3. On Dec. 5, the measure dropped to the lowest since August 2002. The worldwide economy crumbled last year. Home prices plummeted, investment banks collapsed and credit froze. U.S. consumer spending plunged, pushing the nation's automakers to the brink of bankruptcy. Growth in China and other emerging markets withered. "Macroeconomically, we're in a free fall," said John Brynjolfsson, the managing director and chief investment officer at hedge fund Armored Wolf LLC in Aliso Viejo, California. "That's a complete destruction in industrial production and demand, and this is likely to keep pressure on the commodity sector in general." In 2008, 15 prices dropped in the CRB, led by gasoline and nickel. Only four climbed, paced by cocoa.
Jan. 1 (Bloomberg) -- Commodity prices in 2008 plunged the most in five decades as demand for energy, metals and grains tumbled in the second half because of the recession.
From July to December, the slumping economy drove crude oil, gasoline, copper, corn, and wheat down from records in the first half. In 2008, the Reuters/Jefferies CRB Index of 19 raw materials fell 36 percent, the most since the gauge debuted in 1956, to 229.54. It rose to a record 473.97 on July 3. On Dec. 5, the measure dropped to the lowest since August 2002.
The worldwide economy crumbled last year. Home prices plummeted, investment banks collapsed and credit froze. U.S. consumer spending plunged, pushing the nation's automakers to the brink of bankruptcy. Growth in China and other emerging markets withered.
"Macroeconomically, we're in a free fall," said John Brynjolfsson, the managing director and chief investment officer at hedge fund Armored Wolf LLC in Aliso Viejo, California. "That's a complete destruction in industrial production and demand, and this is likely to keep pressure on the commodity sector in general."
In 2008, 15 prices dropped in the CRB, led by gasoline and nickel. Only four climbed, paced by cocoa.
Investors pulled a net $320bn from mutual funds in 2008, a record in both dollar terms and as a percentage of assets, in one of the biggest flights to safety the industry has seen.The move out of what were previously regarded as safe and stable investments followed a record year of investor inflows in 2007. However, it appears that outflows stabilised and even reversed in the final weeks of the year. Investors put a net $23bn into equity funds during December and withdrew only $3.5bn from bond funds, less than in earlier months.
Investors pulled a net $320bn from mutual funds in 2008, a record in both dollar terms and as a percentage of assets, in one of the biggest flights to safety the industry has seen.
The move out of what were previously regarded as safe and stable investments followed a record year of investor inflows in 2007.
However, it appears that outflows stabilised and even reversed in the final weeks of the year. Investors put a net $23bn into equity funds during December and withdrew only $3.5bn from bond funds, less than in earlier months.
Prime mortgage borrowers are struggling to keep up their payments - the proportion of top-quality loans held in asset-backed securities that are at least one month in arrears has risen 50 per cent.A report on Monday by Standard & Poor's notes that, at 3.24 per cent, the percentage of delinquent loans to prime borrowers at the end of September compared with a year earlier is at its highest since the ratings agency developed its index in 2000."Delinquencies are an indication of future defaults and the current increases in combination with falling house prices will start to put pressure on ratings for the first time," S&P said.So far, UK residential mortgage-backed securities backed by prime mortgages have not been downgraded as a result of losses on underlying collateral.Any downgrades of credit ratings are likely to hit lower-rated tranches first rather than the AAA-rated top layer that banks have provided to the Bank of England as collateral for government securities. Downgrades of credit ratings would force banks holding the securities to set aside more reserves for losses, making it harder to extend new loans.
Prime mortgage borrowers are struggling to keep up their payments - the proportion of top-quality loans held in asset-backed securities that are at least one month in arrears has risen 50 per cent.
A report on Monday by Standard & Poor's notes that, at 3.24 per cent, the percentage of delinquent loans to prime borrowers at the end of September compared with a year earlier is at its highest since the ratings agency developed its index in 2000.
"Delinquencies are an indication of future defaults and the current increases in combination with falling house prices will start to put pressure on ratings for the first time," S&P said.
So far, UK residential mortgage-backed securities backed by prime mortgages have not been downgraded as a result of losses on underlying collateral.
Any downgrades of credit ratings are likely to hit lower-rated tranches first rather than the AAA-rated top layer that banks have provided to the Bank of England as collateral for government securities. Downgrades of credit ratings would force banks holding the securities to set aside more reserves for losses, making it harder to extend new loans.
PARIS -- After a catastrophic year for global markets, dazed investors are emerging from their shelters to ask if 2009 will be any better. The consensus among professionals? Do not expect the big rebound that usually follows a sharp downturn. Stocks lost 42 percent of their value in 2008, as calculated by the MSCI world index, erasing more than $29 trillion in value and all of the gains made since 2003. Just about the only assets to prosper were government bonds of developed countries and gold, where prices rose as investors ran for cover. The year began with a shock, but only a previously lonely group of bears predicted the disaster to come. When Société Générale lost 4.9 billion euros ($6.8 billion) in January on the unauthorized positions taken by a low-level trader, it seemed the year might already have its biggest financial news.But that loss would prove trivial compared with what happened afterward. The bad news never seemed to let up: Bear Stearns in the spring, then after a bit of a summer lull, the Lehman Brothers bankruptcy in mid-September, the takeover of Merrill Lynch, the bailout of American International Group, the collapse of Bernard L. Madoff's business, the near-bankruptcy of General Motors. The names say it all for one of the most memorable years in financial history.
PARIS -- After a catastrophic year for global markets, dazed investors are emerging from their shelters to ask if 2009 will be any better. The consensus among professionals? Do not expect the big rebound that usually follows a sharp downturn.
Stocks lost 42 percent of their value in 2008, as calculated by the MSCI world index, erasing more than $29 trillion in value and all of the gains made since 2003. Just about the only assets to prosper were government bonds of developed countries and gold, where prices rose as investors ran for cover.
The year began with a shock, but only a previously lonely group of bears predicted the disaster to come. When Société Générale lost 4.9 billion euros ($6.8 billion) in January on the unauthorized positions taken by a low-level trader, it seemed the year might already have its biggest financial news.
But that loss would prove trivial compared with what happened afterward. The bad news never seemed to let up: Bear Stearns in the spring, then after a bit of a summer lull, the Lehman Brothers bankruptcy in mid-September, the takeover of Merrill Lynch, the bailout of American International Group, the collapse of Bernard L. Madoff's business, the near-bankruptcy of General Motors. The names say it all for one of the most memorable years in financial history.
The steel industry, having entered the recession in the best of health, is emerging as a leading indicator of what lies ahead. As steel production goes -- and it is now in collapse -- so will go the national economy. That maxim once applied to Detroit's Big Three car companies, when they dominated American manufacturing. Now they are losing ground in good times and bad, and steel has replaced autos as the industry to watch for an early sign that a severe recession is beginning to lift.The industry itself is turning to government for orders that, until the September collapse, had come from manufacturers and builders. Its executives are waiting anxiously for details of President-elect Barack Obama's stimulus plan, and adding their voices to pleas for a huge public investment program -- up to $1 trillion over two years -- intended to lift demand for steel to build highways, bridges, electric power grids, schools, hospitals, water treatment plants and rapid transit."What we are asking," said Daniel R. DiMicco, chairman and chief executive of the Nucor Corporation, a giant steel maker, "is that our government deal with the worst economic slowdown in our lifetime through a recovery program that has in every provision a `buy America' clause."
The steel industry, having entered the recession in the best of health, is emerging as a leading indicator of what lies ahead. As steel production goes -- and it is now in collapse -- so will go the national economy.
That maxim once applied to Detroit's Big Three car companies, when they dominated American manufacturing. Now they are losing ground in good times and bad, and steel has replaced autos as the industry to watch for an early sign that a severe recession is beginning to lift.
The industry itself is turning to government for orders that, until the September collapse, had come from manufacturers and builders. Its executives are waiting anxiously for details of President-elect Barack Obama's stimulus plan, and adding their voices to pleas for a huge public investment program -- up to $1 trillion over two years -- intended to lift demand for steel to build highways, bridges, electric power grids, schools, hospitals, water treatment plants and rapid transit.
"What we are asking," said Daniel R. DiMicco, chairman and chief executive of the Nucor Corporation, a giant steel maker, "is that our government deal with the worst economic slowdown in our lifetime through a recovery program that has in every provision a `buy America' clause."
