Lehman Intends to File Bankruptcy
Submitted by
CalculatedRisk on Sun, 09/14/2008 - 8:57pm (274 comments)
in
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First? Fat chance! Haloscan, yer a tease!
Chapter 11... That's the one that does not imply liquidation, right?
OK, I'm off to bed. For some reason I'm going to get up early tomorrow.
Best to all.
CNBC just mentioned Fannie and Freddie.
Funny, I had almost forgotten about that.
They won't be doing business in Australia.
They were shut down there a few hours ago.
So, business as usual?
Dasm!! Still 540 people here. We all have no life!! 10 banks are putting up $70 billion to help ease through the crisis. I wonder if "B-52" Ben will say it is all contained.
Thank you, CR! For all you do.
I think Fuld is playing "who's the chicken" here.
This is going to increase the uncertainty even more.
Is anyone going to continue to do business with the subsidiaries? That does not seem to make sense.
Tomorrow, Tomorrow, Ill love ya Tomorrow ... Life is a Cabaret my friend ... oops Mixed Musical Metaphors.
Yup, yup, yup! Thanks, CR!
With the equity at window nuance couldn't naked short selling be reversed? Meaning create "counterfeit" shares on the long side and swap them into the window artificially setting a floor in the "other" free market? Talk about a fantastically motivated way to insinuate inflation on a massive scale back into the American economy.
Could it offset the housing slump? Arrest it? Bubble it back up?
To borrow, to burrow, to barrow. That is our crass, hairy and evergrim life.
See you guys in a few hours...I need some sleep.
Seriously CR, I know it sounds corny but you provide a service unrivaled by any existing media group. Good ******* job.
Here's the YouTube of the White House screens shown on CNBC tonight:
Thanks, CR. Great coverage today...
Scary day tomorrow...
Say goodbye to all that!
"OK, I'm off to bed. For some reason I'm going to get up early tomorrow."
It's like a stock car race. Goes on for hours and hours, but if you get up for more than five minutes you miss the fatal three-care pileup on Curve 3.
Yeah, they're not going away.
Ahhhh. Shit.
But what's left of them to do anything, apart from give the rest of the IB community the finger?
Instead of just printing more dollars, how about doubling all the financial securities, bonds,etc. All the commercial paper could double and in effect be the same as currency manipulation. Print a little money, print a little stock, print a few extra bonds. Introduce slowly for minimal discovery of true inflation.
TOW --
You just beat me to it.
YouTube - White House Screens 2008-09-14
heres faber...
Thanks CR, for covering the whole weekend. Best coverage anywhere!
i guess while Leh is chap 11 they can bestow all manner of compensation on the miscreant leadership.
foold you diabolical master you
(mis-spelling intentional)
still poundin the pooch even after the body is cold
Thanks go to Nemo, TOW
Bob Dobbs, AIG will probably announce in a couple of hours ... shoot, I can't stay up 24 hours anymore! Tomorrow might be very interesting.
Best to all.
I await some truthful reporting with details on the latest Bernanke-panky and Hanky-panky. Clearly they are going to put at risk much more of our taxpayer money, but how this time?
Thank you Tow & Nemo.
I don't get it. What is with the screens?
I like Faber, but he is dead wrong that the market is oversold. The market is at a historically high valuation.
I'msorry as I know there's probably more important things to worry about, but to me this is very disturbing (from the youtube description)
This is a blatant, in-your-face statement that the American people have no right to know what goes on in the White House. That the White House will tell us what we need to know.
This is unacceptable, but I doubt the press has the spine to make this a front and center issue.
Is Morgan Stanley next? When?
Oh my god!
What about their LaCrosse team?
come on guys. Even an ignoramous like me knows chapter 11 is a protection from creditors and allows a company to trade back to profitability if it can do so.
CR: Thank you for your invaluable blog today.
Short Courage
Clearly they are going to put at risk much more of our taxpayer money, but how this time?
All of it
What is being shown on the Whitehouse clip that is so notable?
-GSD
shoot, I can't stay up 24 hours anymore! Tomorrow might be very interesting.
CR, drink a coca cola with a raw egg and a crushed Extra Strength Excederin in it. Tastes like caca, but does the trick.
Lehman suspended on Aussie exchange:
nvestment Bank Lehman Brothers has been suspended from trading on the Australian sharemarket.
Meanwhile, more than 100 Lehman Brothers staff are waiting to find out whether their US parent company will file for bankruptcy.
ASX suspends Lehman
GSD writes:
What is being shown on the Whitehouse clip that is so notable?
My guess is the Saudi Ambassador shielded from public view.
Nemo, you were on the ball enough to put CR in the description. I should have too, I never would have known about that shot if I wasn't reading here.
Am I the only one who reads this thinking, "So long and thanks for all the fish..."
You can see people moving around behind the screens. Is this SOP for concealing the comings and goings of tonight's cast of characters?
Got it.
-GSD
Faber on CNBC just called for 0.5% emergency fed rate cut, during trade session monday.
If I heard correctly.
Then he was cut off.
Seemed to be hoping this would whiplash the market...
ow lets see
the official line is that ben and hank and chris played hard ball with the IB guys and the CEOs refused to blink
think so
or is whats happening not at all a "call" or a "raise: or a "bluff", but rather a well orchestrated dog and pony show for sheeple.
i 'm ignorant and dont know shit,,,except one thing
these guys are gonna do every thing they can to keep it held together with twine and tape until after the first tuesday in november
"So long and thanks for all the fish..."
Don't forget your towel.
"come on guys. Even an ignoramous like me knows chapter 11 is a protection from creditors and allows a company to trade back to profitability if it can do so."
Worried, Lehman Brothers is not Spic and Span Laundry LLC.
It is an investment bank.
Mr. Market will not give it the opportunity to trade back to profitability.
The franchise vaporized tonight.
BofA merger (stock swap) with Merrill. Circle the wagons.
LEH officially filing bankruptcy. Make no mistake. The participants wanted to do a deal and the Fed and Treasury were ready to facilitate any deal. What happened is so bad they won't even talk about it. Barkclays and BofA looked at the books. There was no good bank part. So bad they must have told Paulson "you don't have enough money."
Quadruple witching Friday.
Somebody is going to do an index P/E calculation going forward. IMO over 40 by their methods, over 50 by mine. I eliminate survivors bias.
I am revising my call for Dow Industrials 9600 lower. At least 8800. Remember I've been talking about all the trends of the next few quarters starting with stairstep events. What the first step.
I reiterate my call for an emergency rate cut of 50bp. That means my WaMu HELOC goes to 4.5%. That'll help them, not.
The glod and sliver pops are fear and something interesting. Call it a physical squeeze. Lots of people want to hold the coin and the dealers have gotten a bit sloppy in actually having the metal on hand. I'm not talking illegal; just in the mail, in process, awaiting customs, awaiting assay, in transit, any number of excuses as to why "I want my bullion" is being met with "Sorry, there will be a delay." And behind the scenes there is chicanery. Their sources are undoubtably juggling a small physical supply amongst multiple customers. Hedging, leveraging and arbitrage.
I doubt the markets will open under normal rules. Perhaps the uptick rule, but I don't expect the computer trades to be sidetracked until all the fast money is long gone then stranding the poor retail investor. We will hit at least the first circuit breaker, possibly in the first 20 minutes.
Cramer will be available all day to calm the skittish sheep... err... people. You can bet he'll be in suit and tie.
And people laughed at my call for ^HGX in the 80s.
--worried wrote:
come on guys. Even an ignoramous like me knows chapter 11 is a protection from creditors and allows a company to trade back to profitability if it can do so.
worried | 09.15.08 - 1:18 am | #
Well, tonight on Bloomberg or CNBC, I forget which, a commentator stated the distinction as Ch7 consumer, ch 11 business - and left it at that. Oy.
Thank you Paulson!
mp, neither are airlines laundry companies.
Mr Market has known about Lehman for months now. What is now different by Chapter 11?. Anything??
The franchise vaporized tonight.
Wow Lehman was 158 years old, only took a decade to kill it!
Angry Saver writes:
"So long and thanks for all the fish..."
Don't forget your towel.
Angry Saver | 09.15.08 - 1:22 am | #
But DO PANIC
Rob Dawg writes: The glod and sliver pops are fear and something interesting. Call it a physical squeeze. Lots of people want to hold the coin and the dealers have gotten a bit sloppy in actually having the metal on hand. I'm not talking illegal; just in the mail, in process, awaiting customs, awaiting assay, in transit
Or undiscovered in the ground.
Rob Dawg
yeah, the important players will get to exit first
the sheeple will be left down in steerage to drow
Don't think its been posted, but it is hard to keep up...
The Federal Reserve Board on Sunday announced several initiatives to provide additional support to financial markets, including enhancements to its existing liquidity facilities.
http://www.federalreserve.gov/newsevents/press/monetary/20080914a.htm
futures not taking kindly to it - and TW down 4.5%. Ouch. from nearly reaching 10k, as the peeps I know in the local market were egging it on to and fully expecting, to 40% down just a bit more than a year later.
As I often year, AIYA!
"What is now different by Chapter 11?. Anything??"
Chapter 11 creates even more uncertainty and stress for the market.
ow I know why bears hibernate, they can't take the news....
Chapter 7 equals liquidation.
Chapter 11 equals reorganization.
Either can be applied to a corporation.
Earlier articles about Lehman today definitely mentioned Chapter 7.
The Chapter 11 filing suggests Fuld thinks they might yet pull through. Could get interesting.
In my childhood I remember a story about spinning gold from straw. We have that technology dont we?
There was a merchant in Bagdad who sent his servant to market to buy provisions and in a little while the servant came back, white and trembling, and said, Master, just now when I was in the market-place I was jostled by a woman in the crowd and when I turned I saw it was Death that jostled me. She looked at me and made a threatening gesture; now, lend me your horse, and I will ride away from this city and avoid my fate. I will go to Samarra and there Death will not find me. The merchant lent him his horse, and the servant mounted it, and he dug his spurs into its flanks and as fast as the horse could gallop he went. Then the merchant went down to the market-place and he saw me standing in the crowd and he came to me and said, Why did you make a threatening gesture, I said, it was only a start of surprise. I was astonished to see him in Bagdad, for I had an appointment with him tonight, in Samarra.
You have ridden away from peril in the past, but tonight is your appointment due. LEH
CNBC "analysts" puzzling over why oil continues to fall. Deleveraging anyone?
Commodities will be sold off to backstop other bad plays. Credit is being destroyed faster than the dollar can fall.
If anyone cares to help me out here... How does LEH go Ch 11 but not it's subsidiaries? What does that mean? And about B of A buying Merril Lynch... What exactly are they buying? How is it they are willing to pay (allegedly) $29 per share or some such for a company that is close to insolvent? I am just a poor layman (not Lehman, thank gosh) and would appreciate a little enlightenment.
This smells like a smoke and mirrors bail out.
Let me see if I get this straight:
The taxpayer isn't bailing out Lehman.
But, 10 of the hotshot banks create a $70 billion pool. Which other banks can tap into.
Many of these 10 companies have access to Fed borrowing.
The Fed increased it's auction limits and expanded the type of assets it will accept.
So, who's to say the Fed didn't just agree to eventually lend 70 billion which will be used by banks to absorb Lehman's assets in liquidation? They could be repaid in later sweetheart deals or by funds that we aren't told about. Or maybe they just forgive it all later. All kinds of possibilities.
So I take it the screen in front of the white house is for a puppet show tomorrow? Some good old-fashioned bread and circus?
Calculated Risk writes:
Bob Dobbs, AIG will probably announce in a couple of hours ... shoot, I can't stay up 24 hours anymore! Tomorrow might be very interesting.
Best to all.
Calculated Risk | Homepage | 09.15.08 - 1:16 am | #
why do i find this so intriguing, being posted at 10 minutes past the time of CR's self declared sleepy time.
If Lehman are history it makes sense to take them down via chapter 11 enabling a controlled demise to reassure Mr Market
from prior thread:
Lehman CEO: Short-Sellers Took Down Bear
Lehman CEO Says Short-Sellers Took Down Bear: Sources - CNBC
Lehman Brothers CEO Richard Fuld has instructed his legal staff to tell regulators that he has information suggesting that short-selling hedge funds colluded to help cause the demise of Wall Street investment bank giant Bear Stearns, sources told CNBC.
Re: Dick Fuld, CEO of Lehman Brothers (LEH), told market regulators that he has information that short-selling hedge funds colluded to bring down Bear Sterns (BSC). If Fulds's "information" is of evidentiary value, these hedge fund managers, and their cast of cohorts, could find themselves behind bars.
Illegal Short Sellers May Face RICO Indictments -- Seeking Alpha
Anyone else sensing an epiphany in the world of financial reporting tonight? - there are many others, but I think Krugman's column would be the most representative of the bunch, but the guy who closed CNBC's special tonight was scared witless.
Well I'm glad nobody is responsible for this.
Krugman's column would be the most representative of the bunch, but the guy who closed CNBC's special tonight was scared witless.
Geoff
Yeah, Radigan kept taking over from the talking heads during the whole program. Explaining what leveraging was so the average guy could understand. Explaining what effect this would have on credit on Main Street. He did a good job, IMO. It wasn't just technical, he made everything understandable.I think Radigan was not just scared, he struck me as pissed off.
Wanderer writes:
Short Courage
Clearly they are going to put at risk much more of our taxpayer money, but how this time?
All of it
Actually, my question was as I typed it..."How this time?" as in "How are they going to accomplish the bailout this time?".
I have no doubt that they will put a bunch of taxpayer money at risk to do it. But what's the sneaky mechanism by which they attempt to hide the blatant bailout?
Just the 429 of us
... Intends to file Bankruptcy
Just so I'm clear. Does this mean:
Perhaps the answer to #2 is irrelevant if they file Chap 11 instead of 7??
Oh RGE Monitor just came in. Let's go get more "reality"
W-I-M-retirement :
Agreed - his attempt to make it understandable to the common man wondering why their Sunday TV was preempted, well...they deserve to have it explained. But I was only refering to his close; it was sort of ominous.
With the Fed now accepting equities as collateral and BofA supposedly offering $29/share for MER, can one of these crooks now go to the Discount Window and pledge their MER shares for $29/share in taxpayer monies?
Chapter 11 buys some time and quite possibly brings others folks down low so the reorganizing does not hurt LEH as much or just buys time to f*ck over the other guys whom would not lend a helping hand before re-filing for straight liquidation.
This could be fairly straightforward. My interpretation of the 10K is there is $87 billion in debt at the holding company level. If so the holding company bondholders and equity investors could absorb all the losses.
IMO this may be why Paulson is OK with the bankruptcy.
Do you think it's by accident that there was no bank failure this past Friday? I am betting that several should have been shut down, but were not because of all these more pressing matters.
What will be the additional cost in the coming weeks and months as these institutions extend their losses further?
Got Shorts?
Reposted for current thread with slight mods:
Replacement nicknames for Dr.Doom:
Sybil from Stern (Sternaen Sybil?)
Bocconian Bear would work too I guess.
Persian Prophet. Or Turkish Delight (my favorite).
Sarah: whew. Traitor/Trader. Had me worried there. Call me a traitor and that's bad enough... but trader... pow.
Cha-Ching Ratings Conglomerated will be very very busy tomorrow. Shall we just give everyone an A and head for the Cyclades? Scylla and Charybdis await!
"If Lehman does not find a buyer over the weekend and the counterparties of Lehman withdraw their credit lines on Monday you will have not only a collapse of Lehman but also the beginning of a run on the other independent broker dealers," Nouriel Roubini, a New York University economist, said ahead of the latest announcement.
"It seems clear that a category five storm is making landfall in the US financial system and a lot of very messy stuff is hitting the fan," Michael Panzer, author of the book "Financial Armageddon," said on his blog.
Uncle B,
I'm fucking sorry, I was under stress with the sarah thing, I was trying to make a point with palin and people thought I was sarah. WTF would you have done? I got pissed and said things I regret, so relax, Im sorry.
Re: Sarah: whew. Traitor/Trader. Had me worried there. Call me a traitor and that's bad enough... but trader... pow.
"Got Shorts?"
SEC to act on abusive short selling: source
SEC to act on abusive short selling: source
| Reuters
Yeah but I don't know if I should be laughing or crying because this shit is getting old.
Angry Saver | 09.15.08 - 1:20 am | #
CR, drink a coca cola with a raw egg and a crushed Extra Strength Excederin in it. Tastes like caca, but does the trick.
Finally something I can comment about:
Coffee, beat up raw egg (milk sugar if you so wish) and spot of Jameson (or other). Its supposed help in recovery in honeymoon activity.
yawn
Just waking up from a two day nap...
Anything happen this weekend guys? How much did Cal beat Maryla... WHAT?
INSOLVENCY?! IN MY BANKING SYSTEM?
Cheers,
prat
SEC short ban info -- banks lose the fight
Banks Lost Fight to Halt Bets Against Financial Firms - DealBook Blog - NYTimes.com
SEC to act on abusive short selling: source
The solution is so simple. The Feds should just outlaw all selling (be it stocks, houses, cars, or whatever) and we would be in this liquidity crisis.
BTW, is this still being referred to as a "liquidity crisis"? It doesn't seem like I've heard that phrase in a while
would = wouldn't
scientists working with the large hadron collider may have just created
the first man made black hole - on Wall Street - Black Monday.
expecting to find the Higgs Boson...scientists have instead stubmled upon a new discovery...
Αυτό ήταν ένα jealous οργή και ήμουν ενεργεί σαν μια σκύλα, αλλά ήταν πραγματικά από χαμηλό σάκχαρο στο αίμα και γενικά άγχος ...
Guy on CNBC thinks the Fed-equity swap will prevent shorts due to less shares being available! These guys are such morons.
Cold hearted orb that rules the night
Removes the colours from our sight
Red is gray and yellow, white
But we decide which is right
And which is an illusion
Pinprick holes in a colourless sky
Let insipid figures of light pass by
The mighty light of ten thousand suns
Challenges infinity and is soon gone
Night time, to some a brief interlude
To others the fear of solitude
TTFN
I still think this is killer stuff!!!
If Fulds's "information" is of evidentiary value, these hedge fund managers, and their cast of cohorts, could find themselves behind bars.
Fuld may be cutting a better deal by turning the tables on people who may have been playing dirty pool??
Naked Kings, hey! I got it, I got it.
Agreed. Fuld does not appear to be the type to go quietly.
Some thread music to keep the diehards awake:
YouTube - Buzzcocks "Breakdown" 1976
(myself, I'm off to bed in 10 mins)
We are closer to the bottom than two months ago.
Good Night and Good Luck.
Everyone.
they "own" the federal reserve
they make the rules
they make money out of thin air by creating exotic securities, ponzi and shadow banking... they get paid to do it
its a club
and you're not in it
YouTube -
Adding to the thread music play list, sung by AIG to the Fed:
YouTube -
Best wishes to everyone in the coming months.
mp, are you and conjure considering upgrading your Cat D9 to a M1117?
I'm just hoping a '78 landcruiser and a shotgun gets me and the fam out of Palo Alto. I figure I've got a good chance against ex-hippies throwing organc tofu from their prius'. Pray for me when I hit Sactown, though.
Warmest,
prat
FYI:
He guided Lehman through the market turmoil in 1998 set off by the collapse of Long-Term Capital Management. Lehman stumbled during that crisis, but Fuld helped the New York Federal Reserve orchestrate a bailout of the hedge fund, cementing his reputation as a manager capable of handling rough patches.
"Fuld showed he could manage market expectations," said Axel Merk, head of the Merk Hard Currency Fund. "And so far he's done a better job than others this time around in that area."
Once the biggest U.S. underwriter of mortgage-backed securities, Lehman was stuck with the assets after two Bear Stearns Cos. hedge funds that invested in the instruments collapsed in July 2007, causing the market to freeze.
The ensuing credit contraction ultimately led to the takeover of Bear Stearns, once the fifth-biggest U.S. securities firm, by JPMorgan Chase & C...
if the fed is accepting equities as collateral....
tomorrow could be a big "UP" day on wall street
NO?
It appears to be very likely that BofA would be in worse shape if it did not buy Merrill, due to either having some sort of direct risk (counterparty or something else that I am not aware of), or due to what Roubini discussed in his most recent column, a run on firms such as Citi or JPMorgan (I'm assuming you could include BofA in that as well).
I am also very curious to see how BofA's stock trades in the coming days, and given that this is an all stock deal, how Merrill's stock trades as well.
Finally, I am not sure of this, but I would think BofA also has to get this approved by their shareholders, and I don't see how this can happen given where Merrill's stock was headed and the ridiculous premium that is being paid.
Can people please provide their thoughts on this?
if the fed is accepting equities as collateral....
tomorrow could be a big "UP" day on wall street
NO?
LOL! I imagine there will be a long line at the Discount Window tomorrow. Most likely the participants will be hoping for some backdating, too.
Thought it was apropos to post NYSE circuit breaker rules:
http://www.nyse.com/press/circuit_breakers.html
NYSE Circuit Breakers
In response to the market breaks in October 1987 and October 1989 the New York Stock Exchange instituted circuit breakers to reduce volatility and promote investor confidence. By implementing a pause in trading, investors are given time to assimilate incoming information and the ability to make informed choices during periods of high market volatility.
Rule 80B
Effective April 15, 1998 the SEC approved amendments to Rule 80B (Trading Halts Due to Extraordinary Market Volatility) which revised the halt provisions and the circuit-breaker levels. The trigger levels for a market-wide trading halt were set at 10%, 20% and 30% of the DJIA, calculated at the beginning of each calendar quarter, using the average closing value of the DJIA for the prior month, thereby establishing specific point values for the quarter. Each trigger value is rounded to the nearest 50 points.
The halt for a 10% decline would be one hour if it occurred before 2 p.m., and for 30 minutes if it occurred between 2 and 2:30, but would not halt trading at all after 2:30. The halt for a 20% decline would be two hours if it occurred before 1 p.m., and between 1 p.m. and 2 p.m. for one hour, and close the market for the rest of the day after 2 p.m. If the market declined by 30%, at any time, trading would be halted for the remainder of the day.
Under the previous Rule 80B trigger points (in effect since October 19, 1988) for a market-wide trading halt, a decline of 350 points in the DJIA would halt trading for 30 minutes and a drop of 550 points one hour. These trigger points were hit only once on October 27, 1997, when the DJIA was down 350 at 2:35 p.m. and 550 at 3:30, shutting the market for the remainder of the day.
CR - Thanks for your work.
I think CR & Tanta deserve a tip FROM ALL OF US!
Cheers
Anyone else waiting for the London open?
My opinion:
我认为它的时间为您需要花上一点时间休假-公安条例，从计算的风险。二天。使所有的电脑使用。电视只。不用担心，如果真的什么大事发生，您找出无论如何。
CR: epic hat tip for this weekends work.
Tanta: Your posts are too long and I'm a conservative and you can too.
Cheers,
prat
So, we have BofA, Countrywide & MER in one happy family now? This seems insane, i.e, where in the fu-k did BOA get the cash?
Europe waiting....id guess -5.5% for the FTSE in early morning trade.
是的，我认为这是明智的意见，因为有其他活动需要做的。也许我要摧毁我的电脑，并寻求智慧，从性质？
expecting to find the Higgs Boson...scientists have instead stubmled upon a new discovery...
The found that it decayed into morons.
讲英语！他们必须不知道我们在这里。
If C uses Lehmans valuations, its in some seriously deep kim-chi. Guess I better clear next Sundays calendar.
From the WSJ, Wake-Up Call: Lehmans Mortgage Mark:
For instance, applying some of Lehman's latest marks to AIG's holdings could result in at least $15 billion in additional write-downs to the insurer's residential portfolio, which has a face value of $88 billion.
"We consider those kind of broad, simplistic comparisons to be unreliable," an AIG spokesman said. "We have a thorough process for pricing and marking our portfolio."
Lehman Chief Financial Officer Ian Lowitt said on the firm's investor call that the firm was marking Alt-A exposures at about 39% of face value, compared with about 63% at the end of the second quarter.
Still, Lehman has thrown down a marker. At the end of June, AIG's marks on Alt-A securities were about 67%. Citigroup, meanwhile, appeared to be valuing its $16.4 billion in Alt-A exposure at just over 80 cents on the dollar.
Naked:
That's why I asked for a diagram of this entire goldberg apparatus with inputs and vectors, etc. to see where all of this is coming from and where it's going. From the creation of repos and treasuries to the bridge loans and windows to the whole structure of cds and counterparties to the local banks to our bank accounts.
Don't forget to include a complete accounting of how all of this affects the national budget, healthcare and social security. Not to mention pension funds, all other retirement accounts.
Where's it coming from and where's it going. That's all. Too. Many. Freaking. Balls. In. The. Air.
We saw the goons that made money during phase I of meltdown betting against america. Who's it this time? Or are they incidental? Did China just win the economic war they've been waging against us for the past 20-30 years? Organized crime? "Enlightened Globalists?"
Recipe was easier than a gin tonic: Give America enough rope and we'll hang ourselves. Fine, let's blame ourselves, but who gave us the rope? Everyone who bought treasuries and mbs right? Let's get really big picture here.
mt: "they "own" the federal reserve
they make the rules
they make money out of thin air by creating exotic securities, ponzi and shadow banking... they get paid to do it
its a club
and you're not in it"
Special illuminated screens at the White House have been installed in preparation for the harvest moon Wayang Kulit performance, held at the first full moon of each windu in the eight year cycle that make up the Javanese Calendar.
Crowds of common folk, made up of multi-generational family groups, have traveled by foot from distant villages to enjoy the performance which will last late into the night by the flickering glow of kerosene lanterns.
The Dalang for this evening's performance will hold the crowd transfixed with a heady mixture of myth, magic and mayhem, drawing on Hindu epics, centuries old. For months afterward, indeed until the next assembly, elders will recount the moral messages conveyed in the performance to the delight of their children and grandchildren.
Dalang - Wikipedia, the free encyclopedia
正确的！让的作准备，错过了一份文件到保尔森的财富的Cookie说： 您的所有基地，属于我们 。
Morons... hehe.
I'm sure the Truth Commission will ferret all these details out. After all, Americans have always been ferociously inquisitive about learning the truth, even if ithis requires the readjustment or jettisoning of long-held stereotypes.
Every other time there has been this much Sunday night interest, markets have gone up.
If LEH can liquidate without blowing up the financial universe, then I think it is bullish.
The subs can be sold.
The holding company has Assets that are worth less then they are booked, and debt which is a lot less then the assets.
Everyone has had 6 months since Bear to get their counter party risk in order.
What exactly has this shadow banking system done for us lately? No one was buying any of their structured finance products anyway.
On the other hand, I don't like companies with the word "America" going south. The ONLY legacy airline that hasn't done a chapter 13 is American.
silliness is being vaporized
Official bankruptcy filing papers can be found here:
Lehman Bankruptcy – It’s Official
re Lehmans, leverage and BK
If a private citizen with reasonable income puts a 3000 deposit down on a house and takes a 97% loan then are they not levered at 33:1? If house prices fall 20% are they now not insolvent?
If their lender is happy to finance them while they make the loan payments what is the big deal?
Because there is a lender of last resort then this mess will end. Some banks will never recover and some will.
What is the big deal here apart from the opportunity to know who to short the hell out of and who to profit from?
Is it really so bad right now?
Things need to get much worse before we all rush to the WW3 bunkers and head for the hills surely!
Congratulations Hank Paulson, you managed to wipe out or massively impair the equity of FNM, FRE, LEH, MER, and AIG all in one week. Not since Brownie handled Katrina has government action seemed so inept and counterproductive. Perhaps the theft of GSE shareholders' capital was not such a good idea, after all, seeing as how the takeover utterly failed to calm the markets and the confiscation of the equity ensured that LEH, MER, and AIG would be unable to raise equity capital.
Something tells me the doom and gloomers (myself included) are going to have just as big a "Oh Sheeit!" moment as the "slight recession" gang.
Our horse is glue.
My take on the B of A buyout is that Hank is piling up all the crap into one huge turd on B of A's books so that when they go under it is clearly too big to fail and can be handled in one fell swoop.
worried wrote: "Is it really so bad right now?"
Nope, it's worse. It's an opaque borg of interconnected financial instruments created to enrich the few. It's illiquid, it's worthless, we're freaking doomed.....
这方面的经验已成为关键在我心目中，但我们必须分开，从今天晚上和今天上午。
Well that's not too bad (thanks Chuck).
Only about $150 Billion in unsecured claims starting with Citi at $138B then Bank of New York Mellon with Billions more, and then a ton of Japanese banks.
多少为所有夜间长时间？
Heh...that's all I know.
Naked Gypsy,
The machine translated Chinese is largely garbled. Avoid idioms.
And if you mean what you say about departing this evening, that might be a good idea.
those blaming Paulsen must remember who appointed him
think Hoover
then remember Bush-McCain-Palin
there, go finish your list of worst to first presidencies
"My take on the B of A buyout is that Hank is piling up all the crap into one huge turd on B of A's books so that when they go under it is clearly too big to fail and can be handled in one fell swoop."
I think you mean one foul scoop?
请不要强奸我。
One last reminder:
banks will not extend credit to securities firms under RICO indictments.
Hmmm.. AXA had 7.25% of Lehman Holdings. Wonder if they had a seat at the table. I'll bet that's why Weil was chosen as BK attorney.
为期两天的国际互联网的假期。只有电视！
And I mean it.
man, this Chinese has got to stop, but the Humble American Tax Payer wins for cogency.
"Please don't rape me"
indeed.
The simpler the better. Revolutionary government, please pay attention.
(Chinese analysts must be all a-twitter at this point)
מי אתה
Well guys you did it. Prior to today I've read everything here for at least the last year, but I'm not going to try to plow through thousands of comments. Two 600+ threads? You all have been very busy. Good night.
sd: I think I only missed one thread. Really haven't learned much more than what we suspected. Cemented some good friendships though.
Nous devrions peut-être prendre une page de la pièce livre de Kenneth Lewis et acheter l'ensemble puant tas de fromage?
Please excuse the devaluation in my signature, it should read as follows:
Department of Axa Investment
Nous devrions peut-être prendre une page de la pièce livre de Kenneth Lewis et acheter l'ensemble puant tas de fromage?
Non Babelfish French translation:
Maybe we should take a page from Ken Lewis and buy the whole thing which stinks of cheese.
Disclaimer: As a Frenchman, stinking of cheese is not necessarily a bad thing.
Ce serait trop cheesey.
Es ist jenseits unserer Kontrolle, es sei denn, wir sammeln in die Wälle (des Internets, natürlich).
Me pregunto si Cheney tiene un tribunal jester
Hey ah, I'm starting to get a little worried about this Lehman thing.
Doc, Muaziz. Congratulations, we've closed this thread down. Best of luck to us all in the morning. Don't take any cheesey nickels.
un autre Canadien avec popcorn writes:
Hey ah, I'm starting to get a little worried about this Lehman thing.
Why?
What's the worst that could happen? Nuclear holocaust? If you can live with that, you'll be fine. Especially with Labatt's bottled in Winnipeg.
I have just changed my sandwich board from "The End Is Nigh" to, "We Are All Doomed".
I feel much better know!
Cult futures must be soaring!
oh, no good reason I guess.
Ok, my better third has decided it's time for bed. Thanks CR & Tanta.
Labbats is what you drink when you can't find any Kokanee.
bonne nuit, et bonne chance-sil vous plaît nous souhaitons la même
Look at the bright side! Osama can now get out of the cave and be free because Americans are not interested in hunting him down anymore..(or do not have money to do that, surveillance satellite fees are such a bitch).
praetorian writes:
CR: epic hat tip for this weekends work.
Tanta: Your posts are too long and I'm a conservative and you can too.
CR did an amazing job this weekend. I would not be surprised if the number of posts and comments this Sunday were double of any previous Sunday (I don't quite recall exactly much activity BSC generated many months back).
I have learned a tremendous amount reading this blog. Probably more so than any other finance blog. But I did find your cynical comment on Tanta disturbing. In case you hadn't noticed, the things that Tana talks about cannot be summarized in a 30 second sound-bite for you. There's a reason why her posts are long: because she deals with very complex issues.
And Tanta is one of the few bloggers on this planet that actually responds to comments. Not only does she take the time to go into agonizing detail on the issues, but then she takes the time to discuss those issues with us, the CR community.
PS: As the French expression goes, trying to get Tanta to espouse your conservative viewpoints is like "pissing in a violin".
Hmmmm.. wonder who's next?
Hope this shadow banking system really collapses!!
Muaziz, I think that there were a couple of inside jokes in prat's post.
Cannot sleep. Checking the crashing foreign markets at Bloomberg teevee. Where do we start? Where do we end?
If I have trouble falling asleep tonight can I get a bailout too. Or as Ipodius would have it, it's not a bailout/expansion of the money supply/inflationary, because it's a loan and has to be repaid, except that the collateral is worthless and the loan will never be repaid so it is a bailout/expansion of the money supply/inflationary.
DJ Stoxx 50 vertical off the bat. And I don't mean vertical in a good way.
Okay, had to share this email before I really go to sleep. Someone is offering me a "hard money" loan to purchase residential or commercial real estate at 60% loan to value, at 10%. No documentation necessary.
I will slam my head into my headboard gently as I drift off into sweet sleep.
Bloody SCREAMING WSJ headlines with multiple articles including these samples:
The Japan Lesson:
U.S. Must Own Up
To Its Bank Crisis
The Japan Lesson: U.S. Must Own Up To Its Bank Crisis - WSJ.com
The Mother of All Mondays
The Mother of All Mondays - MarketBeat - WSJ
In case anyone missed it:
Bank of America to Buy Merrill Lynch for $50 Billion
Bank of America to Buy Merrill Lynch for $50 Billion - CNBC
Bank of America said it agreed to buy Merrill Lynch in an all-stock deal worth $50 billion
Merrill is expecting huge job losses with the merger. The brokerage division will stay intact, but there will be large-scale reductions in workforce. CEO John Thain is also expected to leave.
all stock, snork
figures, all stock--compared to what?
morons, they deserve each other
Wonder where that stock will come from? Eagerly await the opening to see if the shorts will go after BoA. 70% above last price just seems illogical in this environment.
Clearly MER's management was working for thier shareholders and BoA's were asleep.
Wonder if any suits will be taken against them.
5 Days of Pressure, Fear and Ultimately, Failure
"Bankers with two or three decades experience used words scary, terrifying, and horrible to describe the situation."
- NY Times
scary?
who's exchanging gunfire?
terrifying?
pussies!
horrible?
did their old lady get fat? did they lose their cat?
losers
"So, we have BofA, Countrywide & MER in one happy family now? This seems insane, i.e, where in the .... did BOA get the cash?"
If you have four pockets in your pants, I'll give you four guesses.
The next shock may be the oil markets, it seems the same mania that caused the uptrend are all piling on the way down too. Am looking for a spike to happen.
Da Man writes:
"So, we have BofA, Countrywide & MER in one happy family now? This seems insane, i.e, where in the .... did BOA get the cash?"
It seems logical, so the next time the FED has only to bail out one institution instead of three.
I guess LEH was the first financial that was TBTB (Too Big To Bailout).
"Uncle B's Science is Dismal writes:
Naked:
That's why I asked for a diagram of this entire goldberg apparatus with inputs and vectors, etc. to see where all of this is coming from and where it's going. From the creation of repos and treasuries to the bridge loans a" etc.
You probably realize that this system is so complex that there is probably no one who can answer this question. I think we are experiencing a situation that is beyond the comprehension of any of its players. I am not in this business, but I work on complex systems in biology. If one was to try to write out an algorithm to solve this problem for computation, it would probably be np complete, i.e. insoluble for any realistic value of n involving the number of players and positions we have here.
Knowegeable people can try to tweak a few variables around the edges and hope for the best. We are really in uncharted waters and the best is to sit back and watch it unravel (and try to protect our tiny investment while it goes down). This is an interesting problem and we are witnessing something new.
I believe AIG wants the FED to cough up 40B which is bigger than their market cap now!!
Is that logical? Hmmm. Shouldn't a Chapter 11 be in order.
its nice to see these bozos finally die. This is the first step of the healing process that needs to happen. The sooner the better.
Thanks for the great posts. Some here have asked for if Tanta could put hers in haiku form. How about an on going contest--I'll start:
Run fast to big bank
Take out all of your money
Hide it somewhere safe
Berserker writes:
Thanks for the great posts. Some here have asked for if Tanta could put hers in haiku form. How about an on going contest--I'll start:
Where there are humans
You'll find flies,
And Buddhas
Kobayashi Issa
It's been a wild ride, and it was good while it lasted.
Now our kids have gotta pay up.
Don't weep, insects -
Lovers, stars themselves,
Must part.
In the cicada's cry
There is no sign that can foretell
How soon it must die.
Such a moon -
Even the thief
pauses to sing
Lehman Files for Biggest Bankruptcy as Suitors Balk (Update1)
There is likely to be a domino effect as other firms and individuals who relied on Lehman for financing feel the effects of its meltdown,'' said CharlesChuck'' Tatelbaum, a bankruptcy lawyer with Lauderdale, Florida-based Adorno & Yoss and former editor of the American Bankruptcy Institute Journal. ``The whole thing is frankly frightening for the U.S. economy.''
Lehman Files Biggest Bankruptcy Case as Suitors Balk (Update4) - Bloomberg.com
Why am I reminded of Germany in May 1945? Pictures of that keep flashing through my head.
Well, turns out the financial mess wasn't a bad dream.
Welcome to Republican capitalism, where the profits are private and the losses are public and America is a big fat embarrassment.
China Cuts One-Year Lending Rate; Lowers Banks' Reserve Ratio - Bloomberg.com
Sept. 15 (Bloomberg) -- China cut its one-year lending rate by 27 basis points and lowered the reserve ratio by 1 percentage point at some of the banks, according to People's Bank of China.
Why did't Walmart buy Merrill and rename it MerriMart?
AIG asks each american family: buddy can you spare $800? we'll pay it back, honest. We just need it so we can keep our jobs..
Lehman and Merrill now sinking to the bottom and AIG taking on water rapidly. Attention should now shift to WM and DSL and a bunch of other banks that have hit icebergs and are starting to sink. Does Bair always wait for a run before she does anything? She'll have to step up the pace if she is going to take care of the 600 or 700 banks that Roubini says will go under too. (It's going to get crowded down there on the ocean floor.)
The CBOT DOW futures is looking optimistic compared to the market movements in Europe.
Banks and insurance companies are getting pounded in Europe:
FORTIS -8,9%
DEXIA -6,4%
KBC -3,9%
AXA -9,8%
BNP Paribas -6%
DEUTSCHE BANK -6,1%
SOCIETE GENERALE -8,9%
UBS -8,25%
HSBC -2,9%
ROYAL BANK OF SCOTLAND -6,6%
CEDIT SUISSE -5,4%
My children's college funds are in Fortis; I hope the Belgian state is as communist as the US is.
FFDIC, very fine haikus.
I realized that I still don't know what the heck happened this weekend. And I don't know whether anyone else does, either.
long bond up 2 1/2!
Europe equity markets spurting blood.
Down 3-4% across the board.
American Banker (no link)
As Thrifts Stagger, OTS Faces Tough Questions
This week will be a crucial week for the OTS. It faces what will probably be a grueling hearing on the takeover of IndyMac; Wamu could be acquired soon; and collapses
(Can someone post more on this? Is it a Congressional hearing or what?)
It's not Lehman Brothers that's scary, they're just one company. It's EVERYONE else.
Sue (Capital S) writes:
FFDIC, very fine haikus.
From a tiny book I keep on my living room coffee table in my McMansion...
Morning tasks coming up. Don't shoot any bankers in the face before CR gets up.
Lehman Chief Financial Officer Ian Lowitt said on the firm's investor call that the firm was marking Alt-A exposures at about 39% of face value...
CathyG
All the big players got filthy rich collecting wheelbarrows full of IOU's from J6P's joining the Ownership Society. Traded them back and forth, used them as poker chips. Bribed Congressmen and regulators. Stamped the IOU's as 24Karat and sold them all over the planet.
Sliced and diced 'em. Wrote IOU's on the IOU's, and then wrote IOU's on those.
It was a drunken and raucous revelry, went on for years.
But the IOU's are worthless, because they won't be paid back.
And a dismal silence washes over the room...
go to bed at 1:30 - wake up at 5:30.
yeah! ready to embrace the day!
Money markets have seized up here in Europe. No trades, Libor is fictitious. Waiting for the US to open.
Paris is burning!
CAC down 4.67%
China central bank cuts interest rates
http://www.ft.com/cms/s/0/35795e42-830d-11dd-907e-000077b07658.html
The strengthening of the dollar continues.
I say FED will CUT rates pretty soon!
FF fut pricing 25bp cut tomorrow at 86%
AIG in the 7's...ouch
Got SKF?
Good news for PM bugs :
India's silver imports seen surging on lower prices
India's silver imports seen surging on lower prices
| Business News
| Reuters
NEW DELHI (Reuters) - India will import around 300 tonnes of silver in September to meet heavy demand triggered by falling prices, after buying just 56 tonnes in the seven months to July-end, a trade body said on Monday.
Maybe it's time to edge back into PMs
Nemo, have you read Krugman's column? You'll see a line that you might recognize!
It looks like peak oil was nothing more than Leveraged Speculation...
very fitting song for today
YouTube - Willie Williams - Armagideon Time ("Ghost Dog Version")
WM 1.86
crispy&cole writes:
It looks like peak oil was nothing more than Leveraged Speculation...
Trends tend to overshoot, may go all the way down to 80 but then I expect the longer term be firmly in the 3 digits.
Bet this liquidation is all about funds needing liquidity immediately.
What happens to RE prices now ?
I'm back baby!!
Will the bozo's be calling the bottom?
Time to buy Mr. Cramer?
Futures down 4% for everyone else? LMAO x ROFL!
AIG at 6... wow.
Maybe today will be capitulation.
Lola,
Are you up? Lefty isn't going to open up today. I need you to go to Spec's and get me the biggest J&B they got and some more chili Fritos. Get yourself some porkskins. You love those. I need a pack of Salem Ultra Lites - make it two packs. When can you go? I'm almost out. Yes, there is gas in the car about 1/4 tank. Don't go anywhere else just to Spec's ok? Hurry up!
AIG is playing chicken with the FED.
Bet there will be an announcement backing AIG for that 40B they want.
SKF the safest thing to do this AM ?
Play chicken with the Fed and live to regret it.
Yeah, I think AIG will get a loan from the fed or the treasury
I haven't browsed the news since I knocked myself out @2:00am this morn, what's the latest on AIG? Still bracing for an announcement that could possibly turn events around?
FTSE down >5%
This is not good.
FED up with the FED.
No $$$$ for AIG yet..stock is priced at 6.25...
John writes:
SKF the safest thing to do this AM ?
I wouldn't be buy gap ups on any ultrashorts or shorting gap downs, unless I had a solid trading plan. I still think today will be a trend day where such a plan can work effectively. But you'd need a trailing stop in place and be willing to take it.
Oil down 5.10...I have said all along that the great unwinding will bring some serious deflation. All asset classes were driven up by IB's leverageing up 40, 50, 100 to 1
PM's look like they will do better going forward what with India buying 300 Tonnes of silver in Sept.
Gold seems to be holding up despite the oil meltdown.
All asset classes were driven up by IB's leverageing up 40, 50, 100 to 1
Read somewhere that LEH was deleverage to about 20:1, fat load of good that did it.
Hope these violent price swings shakes up and BKs those huge funds, live by the sword.. die by the sword.
Get your coffee first before reading this.
Paulson Statement on SEC and Federal Reserve Actions Surrounding Lehman Brothers
Treasury Secretary Henry M. Paulson, Jr. made the following statement today:
I strongly support the actions announced tonight by SEC Chairman Chris Cox, Federal Reserve Chairman Ben Bernanke and market participants. These changes will strengthen and enhance our financial markets.
These initiatives will be critical to facilitating liquid, smooth functioning markets, and addressing potential concerns in the credit markets.
I particularly appreciate the efforts of market participants who came together this weekend and initiated a set of steps to facilitate orderliness and stability in our financial markets as we work through this extraordinary environment.
Today we are looking forward. This weekend's discussions made clear that both market participants and regulators in this country and abroad recognize the need to support market stability and remove uncertainty as they address current challenges.
I am committed to working with regulators and policymakers including Congress to take necessary and appropriate steps to maintain the stability and orderliness of our financial markets. And I will engage with regulators and policymakers around the world to that end.
Healthy capital markets are the backbone of a vibrant U.S. economy and critical to the well-being of our economy and American families. I am confident in the resilience of our capital markets, and in the commitment of U.S. regulators and market participants to work together through this difficult period.
hp-1134: Paulson Statement on SEC and Federal Reserve Actions Surrounding Lehman Brothers
China Central Bank cut rates:
China Cuts Key Rates Amid Strains - WSJ.com
ECB, BOE race to help:
Central Banks Elsewhere Take Action to Limit U.S. Impact - WSJ.com
Good luck folks:
YouTube -
Oil now down 6.80....
I think that I should be the Nth person to suggest "Sunday, bloody sunday," for rock blogging.
Morning comrades.
So it's early, but BAC down 14% brings out a terrible possibility for Hank: MER + BAC doesn't save MER, but instead kills BAC.
If I were a PPT, I would be a BAC buyer cuz god forbid that toxic crap can't be cured with a shotgun marriage.
Nemo,
Your Krugman moment is at
OP-ED COLUMNIST; Financial Russian Roulette - NY Times
Nice work!
The BAC deal is a stock for stock...the $29 amount will only mean BAC goes down to the low 20's
Sheila Bair is pulling her greasy hair out.
$29 amount will only mean BAC goes down to the low 20's
(You mean MER down to the low 20s, no?)
I'm pointing out that if people believe MER is toxic, and since BoA still has indigestion from CFC, the merger may take BoA down.
Lehman Brothers officially files for bankruptcy, listing $631 billion in debts, Dow Jones reports. More soon.
... oh is that all?
If you think the Fed will raise rates before 2012, you need your head examined.
WB is also getting hit hard.
Target is to defend 11k DOW and 1200 S&P. Lets see if those hold.
I think BAC goes to the low 20's...as the market figures out the crap they are taking their price will drop.
That plagiarist Krugman!
Of course, I'd love to see him credit "Nemo".
"Who?"
So tired. But just can't go back to bed. Not now...
Ah, got it.
ALso, From the NYT this morning:
Questions remain about how the market will react Monday, particularly to Lehmans plan to wind down its trading operations, and whether other companies, like A.I.G. and Washington Mutual, the nations largest savings and loan, might falter.
Geez, those damn new yorkers. First the NYPost disses WaMu, now NYT. Sheila gonna be pissed.
Don' know how wamu survives the week with press like this.
Yeah, WM will have a run on the bank with this press...at least Sheila cant blame the bloggers this time
E-Mini S&P 500 Sep 08 1,209.00 48.25 (-3.84%)
CBT Mini Dow Jones Indus.-$5 Sep 08 11,080.00 378.00 (-3.30%)
Nasdaq 100 Sep 08 1,727.25 46.00 (-2.59%)
So now the S&P 381 is the S&P 260?
I wonder if they'll really file and "stay dead" or if the Fed will concoct some new, absurd lending facility to juice the markets with more debt that will never be paid back?!
Wall street firms are like zombies and super-villains... they are hard to get rid of (no matter how badly they deserve it) and you can never count them as dead until you see the body, and even then...
Adam Levitin at Credit Slips points out possible claw back of Lehman's $5.7 billion in 2007 bonuses as fraudulent transfer:
Credit Slips
Picked this up from Yves at Naked Capitalism.
NYSE Rule 48 In Effect Today
Ya think?
Wake up, Nemo.
The Matrix has you.
Fed head Poole says Merrill no longer at risk. Assclown.
Circuit breaker today?
Lehman's $5.7 billion in 2007 bonuses as fraudulent transfer:
Sorry if I repeat: 1/2 of 2008 was awarded in July. Those damn well should be clawed back.
Run on Wamu? When does the run on the Fed begin? AIG wants $40 billion, Sheila could need 3 times that as Wamu and the 100 dwarves fold. Shoot, if Alt-A mortages are worth what Lehman valued them at, 39% of face value, where does that leave Wachovia?
That is the $800 billion dollar gorilla in the banking system.
uthread
Although Wall Street is not New York's biggest employer, it is the city's economic anchor. Each financial-sector worker is believed to create as many as four other New York jobs, due to their high salaries.
Sounds like the state of New York better rethink how it diversifies its "job portfolio." Just like it's a bad idea to build an economy around bad debts, it's a bad idea to build a tax revenue stream and service job market around a relatively small group of wealthy and super-wealthy finance workers.
I have to drive to Miami shortly. Will Wall Street Still be there when I arrive?
In Miami? No.
I blame the Large Hadron Collider (LHC) for causing a disturbance in the force.
Bloomberg TV broadcasting BofA Merrill Conference Call now.
JP writes:
Ah, got it.
ALso, From the NYT this morning:
Questions remain about how the market will react Monday, particularly to Lehmans plan to wind down its trading operations, and whether other companies, like A.I.G. and Washington Mutual, the nations largest savings and loan, might falter.
HERE IS THE LINK:
- NY Times
BoA combined firm will break even in 2010... so i guess that means they skirted the coming defaults of option arms, alt-a and other loans.
Kick it down the line. Our kids are gonna hate us.
MER sure ain't $29 right now.
FFDIC writes:
Bloody SCREAMING WSJ headlines with multiple articles including these samples:
The Japan Lesson:
U.S. Must Own Up
To Its Bank Crisis
WSJ Error Page - WSJ.com SB...pecial_coverage
But while the U.S. has been decisive where Japan was not, it is worth remembering there was a reason Japan was hesitant to deal with its problems. Recognizing the financial sector's problems quickly increases the possibility of a run for the exits that could seize up the credit markets, putting the overall economy at greater risk. Quickly shrinking the financial sector could have a social cost, as well, putting tens of thousands of people out of work. Where will they go?
Now that it's New Yawkers in the Financial Sector losing out, they're worried about job losses? Come now, I remember the tough love proffered for the Rust Belt. These folks just have to accept that things have changed and find something to do that there is demand for. Lots of $10/hr jobs out there.
As I said at about 1:00 AM, Lehman and Merril are gone. Probably Morgan Stanley is next to be bought (merged).
Fed should now lower Fed funds rate by 25 or 50 basis points. If not in tomorrow's meeting then in the next one. Unless they preempt and do something before the meeting(s).
They must try to keep the banks as profitable as they can (or better said, reduce the losses as fast as they can).
But it is all "contained" to Lehman, right? I mean it won't spread anywhere else? Didn't BenBark say something like that? I sure hope he did.