Posted on 09/14/2008 7:39:42 PM PDT by HAL9000
The possible collapse of one of world's biggest investment banks could be "catastrophic" and lead to the "implosion" of the banking sector, Sky sources say.British bank Barclays had appeared to be the frontrunner to take over the struggling Lehman Brothers but has pulled out of the bidding, a source close to the deal said.
And a consortium led by the Bank of America is reported to have also dropped out.
~ snip ~
(Excerpt) Read more at news.sky.com ...
And no more golden parachuites for the CEOs and corp. officers that mostly created this mess.
The Fannie & Freddie guys got an obscene amount for what ? Failure.
It would help if Greenspan would STFU.
He’s got a dental health problem, rampant Cartermouth disease.
That is not correct. The CEO’s were following bullshit guidelines that forced this fail. Washington forced it and everybody pays.
This is worse than the starting of the Hadron collider. Women and minorities will be hurt the most.
Since you are one of the able-bodied mentioned, it is only proper Freeper etiquette to let you know you have been mentioned.
Should I talk to my Amish friends yet?
I actually waited for that and only got 3 earthquakes. My money went to Chicago btw. :^)
What are some good links to stay abreast of latest indicators and what are good online brokerages. ty
Sounds like you’re trying to do more of a “rollover”, not just a simple purchase.
Let it Die.
It will make for a better movie.
I use ‘bloomberg.com’ for the former,,,,and ETrade and Scottrade for the latter.
AIG is demanding that the Fed give them a bridge loan to raise $40 billion BY TOMORROW. If they don’t get the money, it is suspected that AIG is going to be downgraded by ratings agencies, and that will cripple them outright.
If the Fed gives a direct loan to a private sector company like AIG, why wouldn’t they give one to Lehman? Or General Motors? Or United Airlines?
If they do that, they’re going to have to flood the markets with treasuries and drive the interest rate to zero just to generate the cash to loan to these outifits! What will they take as collateral? A fleet of Chevys?
That is where the danger of a depression becomes palpable.
Thanks. So any idea how much the Fed has pumped into the banking industry since the first 400 billion?
yes sir. :^(
Now they can continue on doing whatever, right?
Whatever they will do in the future, it will be done under tighter regulatory control.
Certainly, any attempt to continue with the high bonus / high risk approach to business via excessive ‘profit centers’ will likely be curtailed.
I would like to see an elimination of stock options as a bonus tool, to be replaced by only actual stock grants at CURRENT MARKET PRICES. The stock options have too much leverage, and they lead to a mentality of risking the house’s money too easily. They also mask the true cost of doing business as they are not expensed (remember Buffett was making a point of this a few years ago) until exercised. And even then it meant less of a bottom line impact becasue so many of them were immediately ‘net exercised’ into the market.
Some of us have been ATTEMPTING to curtail this MADNESS on the part of the government for many years.
Sadly, over the years, the madness metastasized into the private sector with derivatives of derivatives and too many totally ephemeral and whacked out so-called “investment” and “credit” instruments to list them all. It was SO far out of control that a number of the top economic minds in the country admitted that even THEY didn’t understand them.
What the DUMMIES in the private sector failed to realize is that the GOVERNMENT has the printing press to bail THEM out. If they tried it, they’d be arrested for counterfeiting. The feds HATE competition!
Unfortunately, not many others felt any of this government and private sector insanity was – or would become – a serious problem. I can’t count how many LAUGHED at us during that period. Many of them right here at Free Republic (and you know who you are). Most of them have STOPPED LAUGHING!
And so the sheep will again be sheared.
Trust me, it is NOW A SERIOUS PROBLEM, one even the feds may not be able to print their way out of this time.
It is ALWAYS what happens when man – or SOME MEN – play god with the immutable laws of nature and economics. History teaches that they do so at great peril – and they ALWAYS fail. Insanity is doing the same things over and over while expecting a different result.
What saddens me most is that – on the government side, at least — Newt either squandered or let slip HIS chance to get a grip on it. And, no, I’m NOT picking on Newt. WE’RE ALL GUILTY!!
In this 2 minute clip, he seems to be trying to tell us that he took a shot at it:
http://www.youtube.com/watch?v=lIo8FJJMps8
Hence, the reckless promotion of derivatives and new mortgage scheme. It may have been a bad recession, but not on this scale we are about to have. Besides, I suspect they are also afraid that their promotion of globalization would be dead at the track if the economy went south at the time.
Right.
The real story isn’t Lehman. The real story tonight is AIG begging the Fed for a $40 billion bridge loan to fend off the ratings agencies that are prepared to downgrade (and cripple) them in the morning.
Lehman may not single-handedly cause a cataclysm, but an AIG collapse, I believe will dwarf any ramifications you saw at Drexel.
If the Fed bails out AIG, the bond market will being pricing in a bailout of the automakers and airlines, as well.
AIG is demanding that the Fed give them a bridge loan to raise $40 billion BY TOMORROW. If they don’t get the money, it is suspected that AIG is going to be downgraded by ratings agencies, and that will cripple them outright.
—
AIG is trying to raise that capital privately, it is not a Fed led bridge loan. They need equity capital, not debt. Given the product mix and their world wide scope, they are more able to raise this than most firms. Keep in mind, they are an insurer for the most part, not an investment bank. A lot of their product lines are state regulated, not federal (ie-life insurance).
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