And now Lehman ...?

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Lehman Brothers Holdings shares sank as much as 46% yesterday on concern that talks on a possible investment from Korea Development Bank had broken down and that the fourth-largest Wall Street investment bank would be unable to raise needed capital.

And since KDB now confirmed it ....
And then the currency market:

Pound falls sharply versus dollar

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Type: Discussion • Score: 2 • Views: 1,853 • Replies: 9

[+3] - JustBrooke - 09/15/2008[quote="dlowan"] Been reading about this in today's New York Times. Just how scary is this beyond the USA? And within it? [/quote] It's absolutely flipping abysmal! The...

@Walter Hinteler,

It is, declares the New York Times, one of the most dramatic days in the history of Wall Street.

Lehman Brothers, which was founded in 1850 and has risen to become the fourth largest investment bank in the US, this morning filed for bankruptcy protection after frantic weekend negotiations to find a rescue deal fell apart.

The collapse, says the Guardian, will put tens of thousands of jobs at risk around the world, including 3,000 in the City alone. The announcement, at 5.30am BST, is likely to catapult the financial markets into turmoil today. According to the Independent, the development is the "crescendo of the year-long credit crisis".

"Like the passing of the dinosaurs, the great beasts of Wall Street are dying off, extinguished by what is now unambiguously, the worst financial crisis since the great depression," writes Jeremy Warner.

Lehmann had been immersed in talks with potential buyers until late last night, but the death knell sounded when Barclays pulled out negotiations.

At the same time, in another hugely significant move, Merrill Lynch has been taken over by Bank of America for $50bn in an effort to protect itself from the same fate.

The NYT says it "marks the latest chapter in a tumultuous year in which once proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments".

NYT: After Franatic Day, Wall Street Banks Falter

Independent: Marks Turmoil as Lehman hits rocks

Guardian: Banking crisis: Lehman Brothers files for bancrupty protection

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@Walter Hinteler,

Been reading about this in today's New York Times.

Just how scary is this beyond the USA? And within it?

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@dlowan,

dlowan wrote:

Been reading about this in today's New York Times.

Just how scary is this beyond the USA? And within it?

It's absolutely flipping abysmal! The repercussions are almost unfathomable. Not just for our economy, but globally as well. Keep a close eye on WaMu. They could go down next. The feds may decide to do a possible emergency lowering of the rates. Liquidity to be injected from all directions. But I don't see any fixes that are going to hold, IMO. Not sure the sky is falling yet, but a real contraction over the next few years, worse than we've seen, seems likely.

The securities board are flipping and flopping all over the place. We repriced interest rates for the worse out of pure fear this morning, even though the MBS spiked up on the open. Within 20 minutes they reversed directions, heading downward. Met resistance @ 50% and now we're back up 15 ticks on the day.
Holy Schmoley. Gonna be one of those days.

Had plans to take time off work this week. But that ain't gonna happen now.

I work in the banking industry and I hate to admit this......but I am officially scared.

1 Reply

@dlowan,

Yeah, it's a tad scary. Granted, I think most of us can't do anything about it so we just keep plugging away -- go to work, pick up kids, eat dinner, rinse and repeat. I even try not to read too much about it so that I won't freak. It's interesting. Normally I try to keep myself informed but I find I am working hard to ignore this and the previous bailouts and takeovers so that I won't absolutely lose it. We are completely vulnerable to a collapse. Every penny I own is in a bank -- one of which just bought Merrill Lynch.

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@Walter Hinteler,

i watched CNBC last night when they called their news team in for a special report - i don't know if that has ever before happened for a strictly economic and financial situation .
it reminded me of CNN reporting when the iraq invasion started .

here are some views on the situation from the canadian banking and investment community :

http://www.reportonbusiness.com/servlet/story/RTGAM.20080915.wquotes0915/BNStory/Business/home

one view from one of canada's senior and most successful investment managers :

Quote:

Stephen Jarislowsky, founder and chairman of money manager Jarislowsky Fraser Ltd., Montreal

I called this one, but I didn't think that all these banks, and the biggest insurance company and the largest mortgage companies would go bankrupt. Even in 1932, these big banks didn't go bankrupt.

When you have about 15 years without a recession, thanks to Alan Greenspan, there's no brake on greed. Normally, if you have a four-year cycle, the fear reduces the amount of greed. But if you don't have that, greed goes to an absolute excess, because everybody starts feeling there won't be any more recessions.

I certainly don't see it getting much better unless there is inflation, because the only thing that can reinforce the values of real estate is inflation. But how do you get inflation into something everybody is selling and nobody wants to buy?

The only way to do it is to print so much money [that] you just swamp the world with money.

i started this topic last night shortly after CNBC started their special broadcast :

http://able2know.org/topic/122495-1

remember the old chinese saying : " may you live in interesting times ! " .
stay tuned - while holding on to your money - and some gold , if possible .
hbg

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@JustBrooke,

JustBrooke wrote:

Had plans to take time off work this week. But that ain't gonna happen now.

I work in the banking industry and I hate to admit this......but I am officially scared.

I do hope that your job isn't in any danger!

In the UK, bankers (and especially brokers). They are pictured everywhere this morning: the investment bankers now suddenly out of work, shock written all over their faces as they carry hastily assembled cardboard boxes out of their offices, or are slumped over a beer.

Ex-employees were reportedly spending wildly in office canteens to exhaust the credit on their prepaid cards yesterday (buying chocolate, coffee and perishables) or doing last minute expenses. When their phones and blackberries suddenly stopped they found themselves placing calls on public telephones.

The Times headlined the bankers' plight with: "It all ends in tears - and a cardboard box." The Telegraph took delight in the juxtaposition of City workers and a leisurely lunchbreak: "Long lunches have become something of a rarity in the City in the era of 100-hour working weeks. But no one was calling the bankers and secretaries back to the office at Lehman brothers yesterday."

But perhaps the final words are best left to the bankers themselves. One told the Telegraph: "It's going to be difficult for me to get a job because of the current climate. [But] as my wife says, who would feel sorry for an investment banker?"

Times: It all ends in tears and a cardboard box

Telegraph: As Lehmann brothers crumbled, the bankers drank to forget

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@Walter Hinteler,

Quote:

Rogoff: All the evidence shows that when you have a recession accompanied by a financial crisis, it takes much longer to dig your way out of it. The economy is going to grow very slowly in 2009, perhaps by only 1 percent.

SPIEGEL: At the end of the day, who bears responsibility for the debacle?

Rogoff: There are so many people to blame for what happened. It would be like the title credits at the end of a movie if you were to name them all. But the people most to blame are President George W. Bush and the US Congress. The political system has willfully ignored this problem and at many points pressed the regulators to do nothing.

From an interview with Harvard academic and former International Monetary Fund chief economist Kenneth Rogoff in l]spiegel-online[/b]

1 Reply

@Walter Hinteler,

Good Morning, Walter...

I'm really not worried about my job. YET. The bank would have to totally fold. But even then, I have confidence I can go somewhere else with my record. For now.

Funny enough, where I work, we haven't been hurt production wise on the amount of loans we issue. Nor have we felt much pain from loans gone bad. Due largely to our portfolio. We never did carry the really nasty POA's that a lot of banks were writing paper on. Way more conservative, overall. While that may of cost us business when that type of loan was requested by the borrowers, it is what has us in a more secure position now. But there are other pieces to the puzzle that does make my job more difficult in the current environment. Likely to get even more difficult as credit tightens. Now, if this economy were to totally collapse, to the point of near standstill in most sectors, then I would have no job anywhere. Very few would.

My fear is really for the deep, dark, and unknown, ramifications of what we see happening right now. Not just for our country ...but globally. I think there is much more pain to be felt as the domino effect heightens. And I doubt too many people will escape it in some form or the other. It will take years to dig out of this mess IMO. But we haven't even hit bottom yet. Who knows where the bottom even is?

Many people are suffering and more to come. That saddens me greatly. And scares me, equally.

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@Walter Hinteler,

LEHMAN SOUVENIRS OFFERED ON EBAY
--------------------------------------------------------
a/t german google news plenty of souvenirs bearing the lehman logo (baseball caps , coffee mugs ... ) are being offered for sale on ebay .
perhaps they want to raise capital for lehman ?
i don't know whether to laugh or cry .
hbg

get your LEHMAN BROTHERS SOUVENIR package here - only $49.99 :

http://cgi.ebay.com/Lehman-Brothers-Souvenir-Package-ALL-NEW_W0QQitemZ260288020553QQihZ016QQcategoryZ2019QQssPageNameZWDVWQQrdZ1QQcmdZViewItem

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And now Lehman ...?

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