Word: premiums
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...travesty is that jumbo borrowers have a lower delinquency rate, and on that basis deserve a lower, not higher, mortgage rate. Other considerations muddy this analysis. But people who know about these things pretty much agree that credit risk plays virtually no role in setting the jumbo premium, which typically runs .25 to .5 percentage point above nonjumbo loans. That premium is the result of financing advantages enjoyed by Fannie and Freddie, who pass along lower costs to nonjumbo borrowers. The problem with this stealth socialism is that it does not take hot markets into account. The breakpoint should...
...larger down payment to reduce your loan amount. But that money might be better spent in a stock fund. Another option is a piggyback structure, where you borrow just under the jumbo limit and take a second loan for the rest. That second mortgage comes at a hefty premium--maybe a couple of percentage points more than your first mortgage. But it may make sense if you retire the second loan quickly--say within five years. These options grow more valuable as rates rise and the jumbo premium widens--for as long as the dubious jumbo distinction is allowed...
...world Diller comes from, you don't pay a premium for unprofitable businesses. But in the Internet economy, where almost nobody has made a profit yet (and certainly Lycos hasn't), that hasn't kept Yahoo from shelling out $4.35 billion for GeoCities, or stopped the Internet portal @Home from paying $6 billion for Excite--both deals made at hefty price premiums. Of course, they used their richly priced shares as currency. Diller's offer to merge part of his USA Networks with Lycos to form a new company, of which Lycos would own 30%, values Lycos at approximately...
...bottling setup looking a lot more like Coke's. "It's a better mousetrap," Enrico concedes with a grin. "And there's no pride in this, so why not do it ourselves?" To add to his new mix, Enrico last August spent $3.3 billion on America's leading premium juicemaker, Tropicana. Last year PepsiCo had total sales of $22.3 billion...
...MediaOne's shareholders may jump at the price -- AT&T is offering, through a combination of cash and stock, a 17 percent premium over Comcast's bid -- but others in the industry aren't happy about the muscle-flexing. Consumers Union, a consumer advocacy group, plans to challenge the deal as a violation of antitrust laws and rules meant to limit concentration in the cable industry. But in an effort to let the market have its way, the FCC has temporarily stayed those rules. The deal will be pricey for AT&T: $23 billion would go to finance the cash...