August 19, 2008 in City

Bailout fears clobber Fannie, Freddie shares

 

Whether or not the government is actually on the verge of taking over mortgage finance companies Fannie Mae and Freddie Mac, investor fears that a bailout is imminent could turn such a worst-case scenario into reality.

Amid renewed concern that shareholders will wind up with nothing if the government intervenes to bail out the troubled companies, shares in the mortgage finance giants tumbled Monday to their lowest levels in nearly two decades.

The Treasury Department late last month gained the authority to boost Fannie and Freddie through an investment or a loan due to soaring losses from bad mortgages.

Trenton, N.J.

Researchers fault 1999 Vioxx study by Merck

A 1999 Merck & Co. study of its since-withdrawn painkiller Vioxx, touted to participating doctors and patients as meant to show whether Vioxx caused fewer stomach problems than another drug, was primarily a stealth marketing strategy, researchers report.

The true purpose was to get lots of doctors and patients in the habit of using Vioxx just in time for its launch, according to doctors who uncovered internal Merck memos discussing the strategy behind the study, called ADVANTAGE.

New York

Crude oil prices fall below $113 a barrel

Crude prices settled below $113 a barrel for the first time in more than three months Monday as Tropical Storm Fay steered clear of oil-producing infrastructure in the Gulf of Mexico.

Light, sweet crude for September delivery fell 90 cents to settle at $112.87 on the New York Mercantile Exchange, after earlier rising to as high as $115.35. It was the first time crude ended below $113 since May 1. The contract fell $1.24 on Friday to settle at $113.77 a barrel, about $35, or 24 percent, lower than its record of $147.27, set July 11.

At the pump, a gallon of regular fell another penny overnight to a national average of $3.741, according to auto club AAA, the Oil Price Information Service and Wright Express. Prices have dropped 9 percent from the record $4.114 retail gas reached July 17.

From wire reports


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