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Thread: Wall Street Financial Crisis

  1. #31
    Senior Contributor antimony's Avatar
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    Quote Originally Posted by Ray View Post
    Will anything happen to the Heads and Boards of the Banks or will they go scot free?
    This blog on ABC News states that Syron (Fraudy) and Mudd (Phony) are actually set to set to received double digit severance packages (in million dollars)

    Money Beat

    To me, this bit is the most interesting

    Syron and Mudd could become the latest poster boys for Pay Without Performance, joining Robert Nardelli of Home Depot, Hank McKinnell of Pfizer and Phillip Purcell of Morgan Stanely, who have also achieved this dubious distinction. Or this time could be different: Congressional lawmakers (who failed to protect taxpayers with better oversight of Fannie and Freddie) are now calling on Paulson to nix those payouts or at least cut them way back. Syron and Mudd have hired lawyers and public relations reps to help them manage the battle.

    And guess what? Under Daniel Mudd's employment contract, the company -- now owned by the U.S. taxpayer -- is supposed to pay his legal bills.


    The only cheerful thing about this particular webpage was Bianna Golodryga

  2. #32
    Military Professional Ray's Avatar
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    If I have understood, these crooked chaps are to be paid for their fraudulent ways?


    "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

    I don't have to attend every argument I'm invited to.

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  3. #33
    Senior Contributor antimony's Avatar
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    Quote Originally Posted by Ray View Post
    If I have understood, these crooked chaps are to be paid for their fraudulent ways?
    Sir,

    In case you are interested in the numbers:

    1. Daniel Mudd (Fannie) : $7 mil to $ 9 mil (estimates)
    2. Richard Syron (Freddie) : $12 mil to $14 mil (estimates)
    3. Ken Thompson (Wachovia) : $1.45 mil in cash; $7.25 in stocks
    4. Stan O'Neal (Merrill Lynch) : $160 million (source: LA Times)
    5. Charles O. Prince (Citigroup) : $40 million (source: LA Times)

    Does that not warm the cockles of the heart?:(

  4. #34
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    Wall Street Financial Crisis

    Financial turmoil as top bank collapses


    NEW YORK (CNN) -- Global markets were reeling Monday after a convulsive day on Wall Street that saw a leading U.S. investment bank file for bankruptcy and others scramble for merger as the credit crunch claimed its biggest victim yet.

    Heralding one of the biggest U.S. financial shake-ups since the Great Depression of the 1920s, a three-day race to rescue Lehman Brothers ended in failure.

    At one point the U.S. Federal Reserve was forced to step in, announcing plans to loosen lending restrictions to the banking industry in an effort to calm markets, while a consortium of 10 leading domestic and foreign banks agreed a $70 billion fund to lend to troubled financial firms.

    Meanwhile, Bank of America -- which had originally been tipped to bail out Lehman -- agreed to buy ailing Merrill Lynch in a deal said to be worth $40 billion.

    In another development, American International Group, the world's largest insurer, was reportedly struggling to secure billions of dollars in capital after months of seeing its share values slide.

    Markets plunged into negative territory Monday. India's Sensex fell 5.4 percent, Taiwan's benchmark dropped 4.1, Australia's key index was down 2 percent and Singapore fell 2.9. In Europe, the FTSE 100 was down 3.5 percent in early trading, with Wall Street expected to follow suit.

    Police cordoned off Lehman's headquarters in New York on Sunday as staff left the building with cardboard boxes while tourists and onlookers gathered to watch the spectacle.

    The 158-year-old bank, which has weathered previous financial upheavals and saw its offices destroyed in the September 11 World Trade Center attacks, filed for Chapter 11 bankruptcy, which grants protection while it works out a plan to pay back creditors.

    On Monday, the British operations of Lehman were placed under administration, according to accounting firm PriceWaterhouseCoopers.

    The collapse of Lehmans came after weeks of speculation over its future. It took a turn for the worse Sunday when Bank of America and British bank Barclays, both viewed as potential "white knights," pulled out of deal talks, sources told CNNMoney.com. Watch the impact on global markets from Lehman's financial woes

    Both Lehmans and Merrill have been caught with huge exposures to unsecured mortgages, the bad debts at the heart of the so-called credit crunch that has devalued the U.S. housing market and sent financial shockwaves worldwide.

    "Acquiring one of the premier wealth management, capital markets and advisory companies is a great opportunity for our shareholders," Bank of American Chairman and Chief Executive Officer Ken Lewis said in a statement Monday.

    "Together our companies are more valuable because of the synergies in our businesses."

    Like Lehman, Merrill Lynch has been suffering from bad real estate bets, and its stock price lost 27 percent last week -- shares are down 65 percent this year.

    In a bid to prevent further turmoil, the U.S. Federal Reserve Sunday announced a series of steps to support the financial markets. The Fed said it would expand its short-term lending to banks by starting to take all investment-grade debt as collateral.

    "The steps we are announcing today, along with significant commitments from the private sector, are intended to mitigate the potential risks and disruptions to markets," said Fed Chairman Ben Bernanke.

    Treasury Secretary Henry Paulson, who has led efforts to help get the U.S. housing market and the economy back on track, welcomed the moves.

    "These initiatives will be critical to facilitating liquid, smooth functioning markets, and addressing potential concerns in the credit markets," he said in a statement.
    Financial turmoil as top bank collapses - CNN.com


    Can someone give me Paulson's number I need 40 billion right now.

    Fortunately the little shareholders and taxpayers will pay to the last cent for the fat cats' mistakes.

    Bloody poor.

  5. #35
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    the european central bank just pumped 42bil$ to shore up the money markets.

  6. #36
    Administrator Tarek Morgen's Avatar
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    30 billion€ for a market as big as the €-zone...I don't think that it will have much more than a symbolic effect. Though the effects of this U.S. financial crisis, while still hurting, seem to be much weaker on our banks here then I feared.

  7. #37
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    http://biz.yahoo.com/ap/080915/financial_meltdown.html

    Meryll Lynch taken over by Bank of America. And AIG is next it seems.

  8. #38
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    WaMu shares hit hard


    Already battered, Washington Mutual shares fall as potential capital sources' attention is diverted.

    By Tami Luhby, CNNMoney.com senior writer
    Last Updated: September 15, 2008: 1:10 PM EDT

    NEW YORK (CNNMoney.com) -- Don't forget about Washington Mutual.

    Concerned that Wall Street has done just that, the nation's largest savings-and-loan plummeted 22% in mid-day trading. Investors are concerned that potential sources of capital have disappeared in the upheaval this weekend on Wall Street that saw Lehman Brothers (LEH, Fortune 500) file the nation's largest bankruptcy and Bank of America (BAC, Fortune 500) scoop up Merrill Lynch (MER, Fortune 500).

    Washington Mutual (WM, Fortune 500) shares were battered last week, losing 36% of their value as investors grew increasingly nervous that the bank didn't have enough capital to see it through the tsunami sweeping Wall Street.

    After this weekend's turmoil, however, WaMu has fewer places to turn if it needs another injection of capital beyond the $7 billion it raised in April. No one stepped in to save Lehman and Bank of America will now be busy digesting Merrill.

    WaMu is one of the largest players in the mortgage market, which brought it prosperity during the housing boom and may lead to its downfall during the bust.

    Seeking to reassure investors, the bank said late Thursday that it had sufficient capital and liquidity to see it through these tough times. It reported that it plans to set aside $4.5 billion in the quarter for loan losses, down from $5.9 billion in the prior period but more than two times expected charge-offs, or uncollectable loan losses. Reserves for loan losses should build to $10.3 billion, up from $8.5 billion.

    The growth of net charge-offs is expected to slow to less than 20% in the quarter. In the prior period, charge-offs soared nearly 60%.

    The bank said it expects its capital ratio, a measure of its ability to withstand loan losses, to remain "significantly above the levels for well-capitalized institutions." It has about $50 billion of liquidity from "reliable" funding sources.

    Analysts had mixed reaction to the report. Fitch Ratings and Moody's subsequently downgraded WaMu, concerned about its ability to raise capital, while other analysts voiced concerns about depositors' reactions.

    "The biggest risk for WM is a run on deposits," said Chris Brendler, analyst with Stifel Nicolaus & Co. "With all the negative headlines and recent IndyMac failure, WM's retail deposit franchise is a huge concern to us as a significant outflow of consumer deposits could lead to devastating liquidity problems since the company has apparently already lost access to the capital markets."

    But some analysts said the results should restore some confidence in the company. They were heartened by the fact that the company feels it can put less aside for loan losses.

    "Although not out of the woods yet, WM appears to be moving in the right direction on credit and 2008 is likely to be the peak year for provisioning," Fox-Pitt Kelton analysts wrote in a note to clients.

  9. #39
    Military Professional Ray's Avatar
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    It has upset the world market!

    It appears that the socialistic system of the govt salvaging failed institutions is the only effective means so that the average man does not starve!

    I believe AIG is also up a gum tree!

    And the sad part is that the fat cats like the CEOs and the Board will go scot free!! Odd system of criminal and social justice!

    All this has hit so many people around the world!
    Last edited by Ray; 15 Sep 08, at 19:10.


    "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

    I don't have to attend every argument I'm invited to.

    HAKUNA MATATA

  10. #40
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    It's weird that AIG is about to collapse btw since this company has more than 1 trillion in total assets. How can't it get the cash to reassure the markets is beyond my comprehension...

  11. #41
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    Quote Originally Posted by Oscar View Post
    It's weird that AIG is about to collapse btw since this company has more than 1 trillion in total assets. How can't it get the cash to reassure the markets is beyond my comprehension...
    Some of those assets aren't easily liquaditable, especially you even want to recuperate a bit of the cost.

  12. #42
    Military Professional Ray's Avatar
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    All I know is that the Indian markets have taken a very severe beating because of all this!


    "Some have learnt many Tricks of sly Evasion, Instead of Truth they use Equivocation, And eke it out with mental Reservation, Which is to good Men an Abomination."

    I don't have to attend every argument I'm invited to.

    HAKUNA MATATA

  13. #43
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    ^^

    The TSX as well. Though, the TSX have been going down for a while now, because of the falling commodity prices. So was the case for other commodity-based economies, like Brazil.

    Last three times a crash like this happened in 2008: The Federal Reserve cut the intrest rate the first two times (in Jan and March) to artifically support the market, and the last min-crash in summer was narrowly missed when crude prices somehow drop suddenly 10 $ in one day from its all time highs, giving the market a boost.
    Last edited by xerxes; 16 Sep 08, at 00:01.

  14. #44
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Let a few of these fail. Let some airlines fail. Let GM and Ford deal with their pension problems. Stop telling the private sector on who should be able to get a loan for a house and who shouldn't. We'll see the market correct itself.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  15. #45
    Banned Senior Contributor dalem's Avatar
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    Quote Originally Posted by gunnut View Post
    Let a few of these fail. Let some airlines fail. Let GM and Ford deal with their pension problems. Stop telling the private sector on who should be able to get a loan for a house and who shouldn't. We'll see the market correct itself.
    Yes. Let us (i.e. me too) take the hits now instead of just deflecting them until later. The survivors, both corporate and individual, will be the stronger for it.

    -dale

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