Business in brief: WaMu stops offering two types of loans
Washington Mutual Inc. said Wednesday it would stop offering two types of complex mortgage products as part of a shift in its mortgage business.
The nation’s largest thrift said it would no longer offer negative amortizing loan products, and will also end its WaMu Mortgage Plus loan.
Negative amortization happens when a payment on a loan does not cover the interest due, and the amount of interest owed is added to the principal balance, increasing the size of the loan.
Flood damage sends corn prices soaring
Corn prices crept closer to an unprecedented $8 a bushel Wednesday on concerns that damage to cornfields from Midwest flooding is worse than previously thought, which could further drive up the price of food.
Other commodities traded mostly higher, with crude oil, gold, silver and copper futures gaining.
The U.S. Department of Agriculture will say how big this year’s U.S. corn crop will be later this month. Estimates of the toll vary widely, from 2 million to 5 million corn acres damaged or destroyed by floodwaters.
Worst may be ahead for credit crunch
There are new signs that the worst of the global credit crisis is yet to come, and that banks and brokerages caught up in the market turmoil may lose $1 trillion by the time it has passed.
Major U.S. investment banks this week announced yet another painful quarter amid the implosion of mortgage-backed securities and risky credit investments.
Regional banks have scrambled to secure fresh capital to stay in business, and by Wednesday there was new talk that embattled investment bank Lehman Brothers might be forced into a sale.
FedEx reports fourth-quarter loss
FedEx Corp. reported a fourth-quarter loss Wednesday and offered a gloomy outlook as it wrestles with a slumping U.S. economy beset by soaring fuel costs and falling prices for homes.
FedEx, considered a bellwether for the broader U.S. economy, predicted 2009 earnings of $4.75 to $5.25 per share, well below Wall Street expectations of $5.92 a share. FedEx posted a loss for the fourth period of 78 cents a share, or $241 million, compared with a profit of $610 million, or $1.96 per share, for the same quarter last year.
From wire reports