Posted on 09/14/2008 8:05:20 PM PDT by bruinbirdman
Three of the biggest names on Wall Street - Lehman Brothers, Merrill Lynch and AIG - poised to buckle under the seismatic credit crunch pressure.
The global financial system faced its biggest test in at least half a century this morning after some of the worlds leading firms took drastic emergency action in America in the face of a worsening international economic crisis.
Lehman Brothers, one of the worlds biggest investment banks, was on the verge of collapse after a weekend of talks to find a willing buyer ended without success.
Hank Paulson, the US Treasury Secretary, led the efforts to identify a buyer but the British bank Barclays walked away from a deal. Lehman Brothers was last night being prepared for bankruptcy.
Merrill Lynch, another investment bank, appeared likely to be bought by Bank of America in an attempt to save it from a similar fate. Discussions on what would be a $200 billion (£110 billion) merger were at an advanced stage last night.
Meanwhile, American International Group, the worlds largest insurance company, was planning a radical restructuring of its business, which would see it sell its aircraft leasing arm and raise $20 billion from new investors.
The impact on stock markets was expected to be severe. If Lehman crumbled, it would be the first collapse of a major bank since the credit crisis began 13 months ago, and would stand as one of the biggest banking collapses in history.
Coupled with the moves by other Wall Street giants, it would wipe billions of pounds worth of value from pension funds and other investments.
Alan Greenspan, the former chairman of the US Federal Reserve and a leading economic expert, warned: Lets recognise that this is a once in a half-century, probably once in a century type of event.
(Excerpt) Read more at telegraph.co.uk ...
Let’s face it: despite whatever moral justification there may be for bailing out Frannie, Bear, AIG, etc., the fact is that the US financial system has ceased to resemble a capitalist one.
Symbol | Name | Last Trade | Change | Related Info |
---|---|---|---|---|
^AORD | All Ordinaries | 4,847.00 |
110.10 (2.22%) | Components, Chart, More |
^SSEC | Shanghai Composite | 2,079.67 |
0.69 (0.03%) | Chart, More |
^HSI | Hang Seng | 19,352.90 |
35.82 (0.18%) | Components, Chart, More |
^BSESN | BSE 30 | 14,000.81 |
0.00 (0.00%) | Chart, More |
^JKSE | Jakarta Composite | 1,783.27 |
20.80 (1.15%) | Components, Chart, More |
^KLSE | KLSE Composite | 1,044.03 |
2.96 (0.28%) | Components, Chart, More |
^N225 | Nikkei 225 | 12,214.76 |
112.26 (0.93%) | Chart, More |
^NZ50 | NZSE 50 | 3,320.83 |
40.86 (1.22%) | Components, Chart, More |
^STI | Straits Times | 2,502.97 |
67.70 (2.63%) | Components, Chart, More |
^KS11 | Seoul Composite | 1,477.92 |
34.68 (2.40%) | Components, Chart, More |
^TWII | Taiwan Weighted | 6,068.45 |
242.23 (3.84%) | Chart, More |
not good for the home team. For one thing it will run all the positive Palin buzz right off the front pages. For another, all those social conservative issues that she helps with are off the radar again in a full blown economic crisis, and Obama’s “Change” mantra comes back to the forefront.
throw in the fact that Fannie and Freddie gave lots of Rat money in the last year....
Your Asia chart may be misleading. I understand that Nikkei is closed due to “Respect For The Aged” Day in Japan. And, Seoul is closed for their annual “Harvest Moon” festival.
Not a schadenfreude thing, but McCain and the GOP will benefit due to more expertise in responsible national leadership.
A bad economy helps Obama. “It’s the Economy, Stupid!” II, the Sequel.
Times like these are why I moved to all cash in late 2006. My sleep won’t be disturbed. It can’t feel to good to be in the market and wonder what is going to happen tomorrow...
A bad economy helps Obama. “It’s the Economy, Stupid!” II, the Sequel.
If not, things are going to go from bad to worse since all of the credit swap and derivatives trades that were done during emergency session today will expire.
And it's happening now.
So far, no word. I just checked Bloomberg and their latest was 5:30 pm.
Let them all fail. Let capitalism work. Bear Stearns never should have been “rescued” with corporate welfare for JP Morgan.
You won't be alone. No doubt they will have spent your meager social security money by then too. What a government.
Markets in China, Hong Kong, Japan, and Korea are closed for a holiday today (Monday).
Dunno if you saw this:
http://www.federalreserve.gov/newsevents/press/monetary/20080914a.htm
The Fed will now accept equities for their PDCF loans.
To my knowledge, the Fed has never taken equities as collateral for short-term loans.
The TSLF will now take all investment-grade debt securities - ie, corporate debt other than asset-backed paper is now eligible for lending of Treasuries.
What this signals, IMO, is that the Fed is no longer “the lender of last resort.”
The Fed is now the only lender in town.
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