[www.forumsovetov.ru]

Wall Street could get a respite, with Japan and China closed for a holiday tomorrow. I guess things will get rolling at about 4:00 am Eastern time when the European markets open.

If the Fed was hoping for help from Asia, this was the exact wrong weekend to do a deal. We had a deal with an Asian company that finished on Friday morning, with the execs from the Asian company going on vacation and being incommunicado shortly afterward.

[FourEsters]

What do China and Japan got to celebrate together anyway?

[LoohornePharp]

CNN is claiming BoA has made a deal to buy Merril Lynch. Lehman is probably toast.

[Veveseinlep]

Am I missing something when already large financial institutions that are 'too big to fail' are merging to create even larger institutions that are 'too big to fail'. As much as a free-marketeer that I am, isn't it about time for the feds to maybe look at breaking up/reregulating these guys?

[wowwieholmes]

Yeah, it's real funny Aggie.

http://money.cnn.com/2008/09/14/news...ex.htm?cnn=yes

Lehman's dying hours
As the clock ticks down, workers file out of a Times Square skyscraper carrying what they can.
By Andy Serwer, managing editor
September 14, 2008: 11:41 PM EDT

NEW YORK (Fortune) -- The last hours, minutes really, of one the world's largest investment banks make for a pretty unusual spectacle.

I'm standing outside Lehman Brothers (LEH, Fortune 500) headquarters on 7th Ave and 50th street in New York City watching Lehman Brothers die.

Employees, some in suits, others in casual clothes, are filing out with all they can carry as time runs out.

They are walking down the sidewalk past police barricades as scores of New Yorkers and tourists gawk, some asking, "Which star is coming out?" - not knowing what's going on.

A big cop issues the standard "keep moving" line to those of us who stop to gaze. He tells the crowd, "Go home. There is no one famous coming out. You are looking at a whole bunch of people who just lost their jobs."

Some of the people behind the barricades are loved ones - their faces distraught, their cars waiting to pick up their significant others and their boxes. One banker carries out a pair of green Lehman umbrellas, a paltry trophy.

Few parting employees are in a mood to talk - either they're still adhering to CEO Dick Fuld's tight-lipped, 'We're all in this together' policy or they're just exhausted and in major pain.

"No comment," is the standard line. A TV producer tries in vain to get interviews. I managed to ask one guy how he felt: "Look at all of us with boxes," he said with a grimace. "What do you think?"

As the night wears on, dozens of younger workers start coming out of the building. One yells, 'Jackals," not knowing that the crowd is made up mostly of relatives or clueless onlookers. A pair of employees walk out carrying orchids.

Six months earlier and five blocks away, a similar scene played out as Bear Stearns collapsed. Tonight I'm wondering how many more crash and burn nights like this Wall Street, the markets and our economy can take.

[Byxtysaaqwuz]

Fannie and Freddie is an entirely different situation, so it doesn't really apply here. They are both more far-reaching than Lehman, and already government-sponsored, so in some ways it was in the Government's best interest to bail them out. Also, mortgages are different in that they hurt people more than a bank (which is FDIC insured, for those elements of it that are deposits and not investments).

But yes, I think you are accurate, unless you misspelled dike for a reason...

[97dYA9L3]

Originally posted by Asher
Yeah, it's real funny Aggie.
Of course it is. A few upper-middle class people have lost their jobs and we are supposed to feel sorry for them, when every day many times more jobs of ordinary working people, who have much less in the way of financial security, are shipped off overseas, often because of decisions made by people in institutions like this.

Forgive me for being less than sympathetic. The tedious-ignorant-****wit accountant class are a pox.

[Geetiill]

I think it's probably an exaggeration. Some banks will go bust and there will be "soul searching", but we'll be back here within the decade. It is inherently unstable. What rational person would build their home on an active fault?

[AdobebePhoto]

A bit more than a decade, I should think.

By the time this is done, banking sphincters will be knotted up thighter than Ms. Priss' knees and should remain that way for about the next 25 years.

[acissombiapse]

Originally posted by Timexwatch
Am I missing something when already large financial institutions that are 'too big to fail' are merging to create even larger institutions that are 'too big to fail'. As much as a free-marketeer that I am, isn't it about time for the feds to maybe look at breaking up/reregulating these guys? Banks, when properly capitalized, are profitable organizations that can fix a lot of bad deals.

So long as the resulting institution is properly capitalized, there's nothing wrong with a strong bank taking over a weak one.

[Bemapayople]

AIG's going down fast. In pre-market trading, AIG is down 27%.

[Jeffery]

Originally posted by DanS


No, this is opposite of what is happening. Lehman is not considered too big to fail, so it was allowed to fail. The American authorities have as many fingers as there are possible leaks in all the dikes.

Apparently, the authorities thought the financial system could handle unwinding of $650 billion in liabilities of one sort or another that Lehman. (At least, that's the amount that's listed on the balance sheet. Who knows what other liabilities should have been on the balance sheet.) I don't necessarily agree with this guy but...

"It's a return to pure capitalism, the survival of the fittest — the government can't and won't bail everybody out," said Justin Urquhart Stewart, investment director at 7 Investment Management in London.

I question the institutions like BofA's ability to buy up these companies as they fail more than the governments ability to bail them out.

[citicroego]

and in other news

http://news.bbc.co.uk/1/hi/business/7615961.stm

one more turn markets are crashing

&

Anantha Nageswaran, head of investment research at Bank Julius Baer, said: "The dollar rally over the last two months was unsustainable and it was brought about by short-term liquidation pressures by many hedge funds and because of a mistaken feeling that the US economic numbers had turned the corner."

dollar predicted to go back down again... will we see 2/1 with Euro soon? it's sort of funny and scary at the same time...

[orbidewa]

Originally posted by DanS


Banks, when properly capitalized, are profitable organizations that can fix a lot of bad deals.

So long as the resulting institution is properly capitalized, there's nothing wrong with a strong bank taking over a weak one. Apparently, the authorities thought the financial system could handle unwinding of $650 billion in liabilities of one sort or another that Lehman. (At least, that's the amount that's listed on the balance sheet. Who knows what other liabilities should have been on the balance sheet.) I understand that banks, if properly capitalized, can withstand a lot of turbulence, but what I'm getting at there is that if the big banks are too big to allow them to fail, but my main question is: What kind of regulatory safeguards, short of breaking up them up, can be put in place to prevent one financial entity crashing the whole system?

If I were BoA, Goldman, J.P., etc., I'd be watching over my shoulder to see what, if anything, Frank, Bachus, Dodd, and Shelby are cooking up on the Hill (especially Frank); the first big bank/association to go to the hill with some good re-regulatory ideas in order to beat Chairman Frank to the punch will be the big winner.

Edit:

McCain: Wall Street woes point to regulation need

[Roamsaffots]

Originally posted by Timexwatch
I understand that banks, if properly capitalized, can withstand a lot of turbulence, but what I'm getting at there is that if the big banks are too big to allow them to fail, but my main question is: What kind of regulatory safeguards, short of breaking up them up, can be put in place to prevent one financial entity crashing the whole system?

If I were BoA, Goldman, J.P., etc., I'd be watching over my shoulder to see what, if anything, Frank, Bachus, Dodd, and Shelby are cooking up on the Hill (especially Frank); the first big bank/association to go to the hill with some good re-regulatory ideas in order to beat Chairman Frank to the punch will be the big winner. One thing to note is that banks are already regulated rather heavily. I understand that there is a 10% rule for banking (not investment banking, but your normal banks) -- no bank can be larger than 10% of the system. I wonder whether Bank of America was forbidden to buy another large bank because of this rule and had to buy a brokerage/investment bank if they wanted to expand.

[RafaelYV]

One thing to note is that banks are already regulated rather heavily.

Investment banks, much less so.

Public insurance without real regulation is a moral hazard.

[thierabess]

Not quite armageddon today.