The Los Angeles Times has an exclusive saying that Bank of America will change or refinance the mortgages of 265,000 borrowers to help them stay in their homes. The LAT says the bank, which is trying to “fast-track” its purchase of Countrywide, will also double its community-development lending to $1.5 trillion over the next decade. And, throwing in the kitchen sink, it’ll donate $2 billion to charity over the next ten years, too.
The announcements are timed to the bank’s appearance at a Fed hearing on the Countrywide deal.
The new nationalism
The WSJ has a page-one thumbsucker on what it says is the unwinding of globalization at the hands of reasserted nationalism.
The paper says 9/11, the commodities boom, and the backlash against free trade are the prime movers here. That’s resulting in stricter immigration policies (or at least lip-service to them), state-run investment pools and energy companies, and stalled trade talks. The crisis in global food markets has countries stopping food exports.
The Times has an interesting page-one story on an Alaskan program that allows so-called dental therapists to perform basic dentistry, like cavity-filling, on Native Americans after completing a two-year curriculum.
The dentists’ lobby is drilling lawmakers to keep the program from spreading to the lower forty-eight, something critics say is because they don’t want cheap competition. The dental therapists make less than half what a typical dentist makes and in Alaska help Natives to get care they otherwise wouldn’t receive. A study found no difference in the quality of care between dental therapists and dentists.
Since 1990, the number of private dentists has remained roughly flat, at 150,000, even as the United States population has increased 22 percent. As a result, dentists can easily fill their appointment books without seeing people who cannot meet their fees, and patients who have decayed teeth are suffering needlessly, said Tammy Guido, 50, who is one of seven students now training in Anchorage to become a therapist.
This is the root of the matter here and the story could have used a few beefy paragraphs expanding on it.
Buffett, Mars to gobble up Wrigley
The WSJ scoops on A1 that Mars Inc. and Warren Buffett are teaming up to buy Wm. Wrigley Jr. Co. for more than $22 billion. The paper says it could trigger further consolidation in the candy industry. Buffett would likely finance the deal for Mars in exchange for a stake in Wrigley.
Continental stays single
The papers all report that Continental canceled its merger talks with United Airlines. The NYT and Financial Times report the move came after United’s terrible earnings report last week, and the FT adds that prompted Continental execs to look deeper into United’s books and find that they didn’t like what they saw. The WSJ doesn’t really get around to saying why the talks fell apart.
Has finance juggernaut peaked?
The Journal writes on A2 that the finance sector’s share of the U.S. economy may have peaked with the credit bubble. Finance’s portion of gross domestic product has more than doubled since 1980 to 27 percent last year.
The paper says the financialization of the country had some clearly negative consequences:
As finance rose, financial workers took a bigger chunk of total U.S. pay. And as technology allowed financial firms to do more with fewer people, individual paychecks got fatter. Finance was a major factor in the widening gap between the very rich and the middle class. In 1980, finance workers made about 10% more than comparable workers in other fields, estimates New York University economist Thomas Philippon. By 2005, that premium was 50%.
That money diverted some of the brightest minds from other pursuits. “We’re seeing significantly more of our students going into the financial sector,” says Vincent Poor, dean of Princeton’s engineering school. “Traditionally, engineering students had not followed that path.”
The WSJ goes as far as saying the coming shift may be comparable to what manufacturing workers went through in the 1980s, and quotes an analyst saying ten percent of the nation’s seven million finance jobs may go bye-bye.