In Frantic Day, Wall Street Banks Teeter
POSTED BY: rue
UPDATED: Monday, March 13, 2023 18:18
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http://www.nytimes.com/2008/09/15/business/15lehman.html?hp
In Frantic Day, Wall Street Banks Teeter
In one the most extraordinary days in Wall Street’s in history, Merrill Lynch is near an 11th-hour deal with Bank of America to avert a deepening financial crisis while another storied securities firm, Lehman Brothers, hurtled toward liquidation, according to people briefed on the deal.
The dramatic turn of events was prompted by the cataclysm of losses that has shaken the American financial industry over the last 14 months.
The moves came after a weekend of frantic negotiations between federal officials and Wall Street executives over how to avert a downward spiral in the markets. Questions still remain about how the market will react and whether other firms may still falter like A.I.G., the large insurer, and Washington Mutual, both of whose stocks fell precipitously last week.
Coming just a week after the government took control of mortgage lenders Fannie Mae and Freddie Mac, the magnitude of the industry’s reshaping is staggering: two of the most powerful firms on Wall Street, Merrill Lynch and Lehman, will disappear.
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Great economy ! Fantastic ! Eh, Rap ?
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AIG shares lost 41% of their value, while WaMu lost 36%. Looks like the economy really IS on fire - and it might just burn down the whole house - or at least the housing market!
This world is a comedy for those who think, and a tragedy for those who feel.
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I think Merrill might survive but many other banks will collapse and this whole cris ain't good for the eocnomy, its going to damage the US dollar
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Quote:
Originally posted by JaynezTown:
I think Merrill might survive but many other banks will collapse and this whole cris ain't good for the eocnomy, its going to damage the US dollar
You mean it's going to damage the dollar even MORE?
Yikes!
This world is a comedy for those who think, and a tragedy for those who feel.
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This thread would most honestly be titled ,
" Destruction of the US Dollar III "...
Destruction , I : http://www.fireflyfans.net/mthread.asp?b=18&t=34184
Destruction , II : http://www.fireflyfans.net/mthread.asp?b=18&t=34664
And the NYTimes article would more honestly say ,
" In Frantic WEEKEND , Wall Street Banks Rush Secretly To Avert CRASH ! "
This disaster wasn't created in just a day...
It will take a lot more than a day to cover all the losses , too.
Indeed , Greenspan alluded to the facts in his analysis , which was quoted in the article :
“This is a once-in-a-half-century, probably once-in-a-century type of event,” Mr. Greenspan said in an interview on ABC.
“I think the argument has got to be that there are certain types of institutions which are so fundamental to the functioning of the movement of savings into real investment in an economy that on very rare occasions — and this is one of them — it’s desirable to prevent them from liquidating in a sharply disruptive manner.”
Well Duh , Al !
This is a disaster virtually unprecedented in the nearly 100-year history of the 'Federal Reserve'...And , another good reason not to let greedy 'private' interests remain in control of the nation's 'money supply'....
This 'Creature from Jekyll Island' is still a bad idea , so many years on , and the ACTUAL Order Of Things is further betrayed at article's end :
“My sense is that the systemic question will be the only question on the table if Lehman falters,” he continued. “If systemic risk is considered grave, the Fed, perhaps with Treasury playing at least an advisory role, will intervene.”
That was James Leach , former Republican CONgressman (IA) and Chairman of the House Banking Committee , admitting to the actual relationship between " the people's " US Treasury , and its Masters , the privately-owned 'Federal Reserve'...
Hey , ain't it decent of the Banksters to allow the US Treasury to 'play' at least an ADVISORY role ?
" The mistakes made with excessive credit at artificially low rates are huge, and the market is demanding a correction. This involves excessive debt, misdirected investments, over-investments, and all the other problems caused by the government when spending the money they should never have had. Foreign militarism, welfare handouts and $80 trillion entitlement promises are all coming to an end. We don’t have the money or the wealth-creating capacity to catch up and care for all the needs that now exist because we rejected the market economy, sound money, self reliance and the principles of liberty. "
--Ron Paul , July 4th , 2008
" If the American people ever allow private banks
to control the issue of their money,
first by inflation and then by deflation,
the banks and corporations that will
grow up around them (around the banks),
will deprive the people of their property
until their children will wake up homeless
on the continent their fathers conquered. "
--Thomas Jefferson
Give me control of a nation's money and I care not who makes her laws.
--Mayer Amschel Rothschild
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Quote:
Originally posted by JaynezTown:
I think Merrill might survive but many other banks will collapse and this whole crisis ain't good for the economy, its going to damage the US dollar
Survive ?
After a fashion...
It looks like Merrill Lynch will also be picked up by BofA , but what must be borne in mind afterward , is that
the bigger ones will fall harder , when their turn comes...
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Deep down, I really just want to see them all crash and burn. Does that make me a bad person?
Edit: Of course the problem with that is... we've accepted the notion that the government is there to protect us all from our bad decisions. Which means that we'll ending up footing the bill for these greedy bastards. Gotta love the nanny.
SergeantX
"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock
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Economic Collapse?
http://scotterb.wordpress.com/2008/09/15/economic-collapse/
Quote:
In the post “Future Uncertain” last June, one commentator named Mike wrote:
“An economic collaspe is not only concieveable but it is HIGHY likely. The mainstream media is not telling people the full extent of the credit market woes. Ten of billions (Possible up to a trillion) more dollars will be wote down by banks in the coming months. It would one thing if the toxic watse dumping was finished but these banks are going to flood the market with a lot more of these bad loans. The markets can’t withstand any more…. The Dow will most likely be below 10,000 by the end of July…”
Now, Mike’s prediction of the Dow below 10,000 by July turned out to be wrong, but as we watch the markets wobble over the problems at Lehman, it is becoming painfully clear that Mike may have been off primarily in his timing. The United States could be facing the most severe economic crisis since the Great Depression. We just can’t tell how deep the problems are, or how they’ll play themselves out. But consider the drama of the past couple weeks. First, Freddie Mac and Fannie Mae are literally taken over by the government.
We’re talking about nationalization of the most important financial backers of home mortgages, seized by a Republican pro-market government, obviously without enthusiasm. The reason they took over these giants is that they had no choice — if they failed, the mortgage market in the US would have ground to a halt, unleashing tremendous economic hardship to just about every sector of the economy. Why this happened was clear: close ties between these two corporations and government had led to laws that made it progressively easier for them to back mortgages without oversight. That’s fine when the market is booming and home values soaring. But when the bubble bursts, it was disaster.
Is this a domino effect that could reck havoc throughout the entire banking sector? Is this a limited problem? Nobody knows, but as with Enron a decade ago, it’s possible that the financial sector has been skating buy the last few years with accounting tricks and short term book keeping shemes to avoid having to publicly admit how bad things are. Consider: you might be making a decent salary, but yet due to purchases and poor spending habits, be in severe debt. For a long time you can keep this secret from your closest friends and in some cases, even a spouse. You can kite credit cards (get a new card to make minimums on the old), do home equity loans, find ways to make that debt something that isn’t felt in your day to day life. It may drive you crazy when you think about it, but you can usually find ways to get by another day. This can go on for years.
But when things start to go south, they go south fast. Soon you’re missing payments. Then suddenly interest rates jump from below 10% to above 20%. Suddenly you can’t get new loans, your house has negative equity and the result is personal financial collapse or bankruptcy. Now, what if the banking sector as a whole has this sort of problem? Drunk on the easy money and loose credit of the early part of the decade, they got themselves in over their head, perhaps expecting continued economic growth to simply allow them to go on making large short term profits. It wouldn’t be consumerism in this case, but “buying” more interest-bearing loans, with the idea that the money will be paid back and profits would rise. When the bubble bursts, then the whole thing implodes, as happened at Freddie Mac and Fannie Mae, and now Lehman.
One hopes that the other financial giants are on solider ground, but we’re not sure how solid, or who might be next. The fact that it’s so difficult to find other firms to buy Lehman and limit the scope of this credit shows the relative weakness of the entire financial industry. Add to that the troubled economic conditions: continued high oil prices (even if not as a high as mid-summer), a current accounts deficit, a weak dollar, and high unemployment. TheNOTIFY: N | REPLY | REPLY WITH QUOTE | PERMALINK | TOP | HOME
Quote:
Originally posted by SergeantX:
Deep down, I really just want to see them all crash and burn. Does that make me a bad person?
No. Just because you want all those innocent people out there to suffer, people who work hard trying to make ends meet, raise families and have modest homes in safe neighborhoods to raise their children. That does not make you bad. Just because you would rejoice at something that will cause untold suffering from a global economic collapse.
Naw...your a fine old fella you are.
H
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Quote:
Originally posted by Hero:Quote:
Originally posted by SergeantX:
Deep down, I really just want to see them all crash and burn. Does that make me a bad person?
No. Just because you want all those innocent people out there to suffer, people who work hard trying to make ends meet, raise families and have modest homes in safe neighborhoods to raise their children. That does not make you bad. Just because you would rejoice at something that will cause untold suffering from a global economic collapse.
Naw...your a fine old fella you are.
H
Yeah... you should repent your sins by invading a nation and killing hundreds of thousands of its innocent civilian population! Now THAT is how you pay penance!
'Course, there are schools of thought that say that no one is truly innocent...
This world is a comedy for those who think, and a tragedy for those who feel.
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