2
   

CNBC SPECIAL REPORT

 
 
Reply Sun 14 Sep, 2008 08:01 pm
turned the TV about 8:30 pm tonight (sunday night) .
it looks like a major financial "hurricane" out there .
CNBC called their news team in for a special report .
bank of america bought merrill lynch , lehman brothers still for sale or will go under , general motors looking for BILLION $50 from U.S. government ...
batten down the hatches !
even the usually calm and cool commentattors don't know what to make of it .
well , i'm going to bed and will go to the pool tomorrow morning .
i'll see what the news are by 10 a.m.
hope to see you all around !
hbg
 
Foxfyre
 
  3  
Reply Sun 14 Sep, 2008 08:03 pm
@hamburger,
BOA bought Merrill Lynch? The last I read that BOA backed off from that. But yes, the Dow futures are down more than 300, they did a rare brief Sunday market opening today to move some stuff around, and we'll see how it goes tomorrow. Expect a bumpy ride.
hawkeye10
 
  0  
Reply Sun 14 Sep, 2008 08:05 pm
@hamburger,
no, you have it all wrong, GM has a couple of years worth of cash, then they will go dead. Not an immediate problem, except for those who own the stock, or where counting on paychecks or pensions getting paid. Oh, parts manufacturing employees will also get the shaft. Them folk need to be working on plan B.
0 Replies
 
hawkeye10
 
  1  
Reply Sun 14 Sep, 2008 08:06 pm
@Foxfyre,
Quote:
NEW YORK (AP) -- Bank of America Corp. has agreed to buy Merrill Lynch & Co. for about $44 billion, or around $29 a share, according to The Wall Street Journal. A deal between the two big financial companies would lift the uncertainty that has shrouded Merrill Lynch since the start of the credit crisis a year ago.
http://biz.yahoo.com/ap/080914/merrill_bank_of_america.html
0 Replies
 
hamburger
 
  1  
Reply Sun 14 Sep, 2008 08:08 pm
@Foxfyre,
CNBC just showed lehman employees leaving the office after clearing out their desks !
they were let in , a few at the time to pick up their personal belongings .
i'm sure glad nothing like that ever happened to me !
i guess it's a different world out there now .
g' night .
hbg
hamburger
 
  1  
Reply Sun 14 Sep, 2008 08:12 pm
@hamburger,
CNBC reports :

Quote:
Report: Bank of America to buy Merrill Lynch
Boards approve acquisition for $44 billion that will create financial giant
MSNBC News Services
updated 9:50 p.m. ET, Sun., Sept. 14, 2008
NEW YORK - The boards of Bank of America and Merrill Lynch have approved a roughly $44 billion purchase of the brokerage by the bank, the Wall Street Journal reported on its Web site.

The Journal, citing sources close to the negotiations, reported both boards signed off on the deal Sunday evening.

Charlotte, N.C.-based Bank of America has the most deposits of any U.S. bank, while Merrill Lynch is the world's largest brokerage. A combination of the two would create a global banking giant to rival Citigroup Inc., the biggest U.S. bank in terms of assets.



more on monday
0 Replies
 
Runamuck
 
  0  
Reply Sun 14 Sep, 2008 08:34 pm
@hamburger,
Clintons repeal of the Glass-Steagall Act is what caused this. He was to busy getting his you know what taken care of. He will go down in history as a horific president wait and see when the dust clears.
0 Replies
 
hawkeye10
 
  1  
Reply Sun 14 Sep, 2008 09:07 pm
Quote:
The American International Group is seeking a $40 billion bridge loan from the Federal Reserve, as it faces a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said Sunday night.

http://dealbook.blogs.nytimes.com/2008/09/14/aig-seeks-fed-aid-to-survive/index.html?hp

A $40 billion loan from the FED will not help much, except to delay the inevitable. Until this week most people thought that AIG would be OK, Guess not.
hawkeye10
 
  2  
Reply Sun 14 Sep, 2008 09:10 pm
@hawkeye10,
RIP Lehman Bros
Quote:
NEW YORK, Sept. 14 -- Lehman Brothers was preparing a bankruptcy filing Sunday night that would make it the largest financial firm to fail in the global credit crisis, after federal officials refused to help other companies buy the investment bank by putting up taxpayer money as a guarantee.


By Sunday night, a series of marathon negotiations over the weekend had failed to produce a buyout of Lehman Brothers, and sources familiar with the talks said the firm could file for bankruptcy before markets open Monday morning.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/14/AR2008091400355.html?hpid=topnews
NickFun
 
  2  
Reply Sun 14 Sep, 2008 09:32 pm
@hawkeye10,
I think we should all bend over and kiss our investment asses goodbye.
hawkeye10
 
  1  
Reply Sun 14 Sep, 2008 09:48 pm
@NickFun,
Quote:
Major global banks unveil $70 billion loan program to guarantee liquidity


NEW YORK (AP) -- A group of global banks and securities firms announced late Sunday a $70 billion loan program that financial companies can tap to help ease a credit shortage that threatens global financial markets.


The ten banks, which include JPMorgan Chase & Co. and Goldman Sachs Group Inc., said they were committing $7 billion each for the pool. The pool would act as a signal to the marketplace that banks, brokerages, and other financial companies can lean on the fund to take care of borrowing needs.


http://biz.yahoo.com/ap/080914/banks_plan.html

the game board is set, we are going to let the markets work, and hope that the global economy survives.....this is not a sure bet. We will know in a few hours what the holders of capital think. It is a sure bet the the banks have a back room deal that no one to cashes out, but banks don't contol the majority of the market capital.
hawkeye10
 
  2  
Reply Sun 14 Sep, 2008 10:04 pm
@hawkeye10,
Quote:
Federal Reserve announces new efforts to shore up financial markets by expanding loan programs


WASHINGTON (AP) -- The Federal Reserve announced late Sunday several steps to cope with the worst credit crisis in decades, including broadening the types of assets that investment banks can put up to get emergency loans from the Fed.


The action came as U.S. and foreign commercial banks were hashing out a plan to inoculate the global financial system against the possible failure of Lehman Brothers.

Federal Reserve Chairman Ben Bernanke announced the actions in a statement, saying they were being taken after a weekend of discussions with officials from the Treasury Department and the Securities and Exchange Commission and top executives of financial firms.


http://biz.yahoo.com/ap/080914/fed_financial_crisis.html
hamburger
 
  1  
Reply Mon 15 Sep, 2008 05:39 pm
@hawkeye10,
so i have been glancing through the on-line businesss news this afternoon ;
also channel hopped from CNBC to CNN to PBS to CBC ... ...

while many of the commentators , investment gurus and others are trying to put up a brave front , in the end they all seem to come up with the same answer : "well , we hope the worst is over but we'll have to see how things will play out . perhaps later this year or early next year we'll get a better picture ...
... many other financial instituions will have to revalue their balance sheets ... little too early to tell ... ... " .

a harvard economist put it pretty bluntly when asked about the government deciding NOT to attempt to rescue any more financial institutions that might get into trouble . he stated that if some minor players get into trouble , the government might well decide against further intervention , BUT if some more of the big financial institutions get into serious trouble , the government will have little choice but to pump more (taxpayer) money into the system . he didn't think we'll really know until sometime in 2010 what the outcome will be .

as a bit of an aside : many pensionfunds have - and will continue to take - some major hits from investments going sour . so where will the money to pay pensions come from ???
some big insurance companies will also suffer financial losses from investments going sour : where are the claims to be paid from when investments are losing value and dividends and interest payments head south ???

as one of the commentators said , even in the thirties the big banks pretty well survived without major problems but it's different this time .

one of the market analyst's expects as many as 150 smaller and regional financial institutions to get sucked into the abyss .

tomorrow is another day ... ...
hbg


hamburger
 
  2  
Reply Mon 15 Sep, 2008 07:54 pm
@hamburger,
in case you are having trouble sleeping ... ... you might want to read what BBC correspondents are reporting from around the world about the ever spreading financial problems (i won't attempt to sum up their reports - i'm not that foolish) :

CREDIT CRUNCH : AROUND THE WORLD (happy reading - hbg)

http://news.bbc.co.uk/2/hi/business/7537173.stm
hawkeye10
 
  1  
Reply Mon 15 Sep, 2008 10:02 pm
@hamburger,
people need to remember three things
a) real estate values are still falling in America

b) the sham financial instruments that can not be valuated are still sitting on books

c) in the last week credit markets have seized up even worse than they had been.

0 Replies
 
hawkeye10
 
  1  
Reply Mon 15 Sep, 2008 10:52 pm
@hamburger,
Quote:
in case you are having trouble sleeping ... ... you might want to read what BBC correspondents are reporting from around the world about the ever spreading financial problems (i won't attempt to sum up their reports - i'm not that foolish) :

CREDIT CRUNCH : AROUND THE WORLD (happy reading - hbg)

http://news.bbc.co.uk/2/hi/business/7537173.stm


actually, I bet this one will do a better job of keeping you awake at night:
Quote:


Buttonwood

Credit and blame
Sep 11th 2008
From The Economist print edition

A must-read on the origins of the crisis

Another week, another drama. The unveiling of the second bail-out plan for Fannie Mae and Freddie Mac on September 7th"to say nothing of the dwindling fortunes of Lehman Brothers in the succeeding days"was a reminder that the credit crunch is proving infuriatingly difficult to bring to an end.

The crunch has lasted long enough to spawn its own publishing mini-boom, as authors have raced to give their diagnoses in print. George Cooper, a strategist at JPMorgan, an investment bank, has produced by far the best so far*, skewering both academic orthodoxy and central-bank policy in the process.

The problem, says Mr Cooper, is that central banks have subscribed to one economic philosophy in an expanding economy and quite another when the economy is contracting. When things are going well, central banks leave the markets alone. But at the merest hint of crisis, central bankers have responded by cutting interest rates to stimulate their economies and prevent asset prices from falling. Tongue firmly in cheek, Mr Cooper describes this as “pre-emptive asymmetric monetary policy”.

This approach, he argues, stems from a belief in efficient-market theory which states, at its simplest, that prices reflect all available information. On that basis, asset prices are always “right”, there can be no bubbles and central banks should not intervene to restrain speculative excess. Similar reasoning seems to have persuaded Alan Greenspan, the former chairman of the Federal Reserve, not to prick the dotcom bubble of 1999, even after warning of “irrational exuberance” in 1996.

To be fair, Mr Greenspan did not argue that there were no bubbles, only that it was impossible to spot them while they were inflating. Instead, he felt that central banks should wait to mop up the mess once the bubble had burst.

In contrast, Mr Cooper argues that markets are far from efficient, as they often get locked into feedback mechanisms that lead to booms and busts. Indeed, if markets were really as efficient as some believe, why would economies need central banks in the first place? The market would set the appropriate level of interest rates for the economy and would automatically rebalance itself in the event of a problem in the financial system.

However, crises occur time and again, and far more frequently than most financial models would predict. Perhaps this is because investors are not the perfectly informed paragons found in efficient-market theory. Instead, they may simply be unable to get enough information to make correct judgments about the value of securities, or indeed may be given misleading information by insiders such as company executives or salesmen from the financial-services industry.

Central-bank intervention to prop up markets is often popular at the time; few people relish banking collapses or recessions. But it creates problems in the long run. The first is that consumers (and companies) are encouraged to borrow, not save, thanks to the low level of interest rates and a belief that central banks and governments will always rescue them if things go wrong. But as Mr Cooper writes: “A depressed savings rate leaves the economy precariously positioned to deal with future adverse shocks.”

The second danger is that the system becomes progressively less stable as risk-taking is encouraged. Instead, central banks should permit some short-term cyclicality in order to purge the system of excesses. They can do this, Mr Cooper argues, by preventing excessive credit creation (which he defines as credit growth far ahead of economic growth).

This is not a new thesis, as the author accepts. Hyman Minsky developed a theory of financial instability in the 1970s. Jeremiahs have been warning about a looming debt crisis for at least 20 years. But Mr Cooper’s book is by far the most cogent and reasoned of the modern-day “credit excess” school.

Alas, the author does not see an easy way out of today’s mess, in effect arguing that we “shouldn’t start from here”. Letting the markets have their way would risk a repeat of the 1930s, and the Fannie and Freddie rescue shows the authorities are desperate to avoid that. But the danger is that central banks inflate another credit bubble, saving the economy from disaster in the short term but raising the stakes still further when the next crisis comes around. The Fannie and Freddie rescue, though unavoidable, suggests the world is heading in that direction.



*“The Origin of Financial Crises: Central Banks, Credit Bubbles and the Efficient Market Fallacy”. Published by Harriman House.


0 Replies
 
 

Related Topics

Where is the US economy headed? - Discussion by au1929
The States Need Help - Discussion by Robert Gentel
Fiscal Cliff - Question by JPB
Let GM go Bankrupt - Discussion by Woiyo9
Sovereign debt - Question by JohnJD
 
  1. Forums
  2. » CNBC SPECIAL REPORT
Copyright © 2022 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.04 seconds on 11/28/2022 at 12:02:27