In Frantic Day, Wall Street Banks Teeter
By ANDREW ROSS SORKIN, BEN WHITE and JENNY ANDERSON
Published: September 14, 2008
In one of the most extraordinary days in Wall Street’s 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.
The weekend’s once unthinkable outcome came after a series of emergency meetings at the Federal Reserve building in downtown Manhattan in which the fate of Lehman hung in the balance. In the meeting Federal Reserve officials and the leaders of major financial institutions were trying to complete a plan to rescue the stricken investment bank.
But as the weekend unfolded, Barclays and Bank of America, which had both considered buying all or part of Lehman, decided that they could not reach a deal without financial support from the federal government or other banks.
As a result, people briefed on the matter said late Sunday that Lehman Brothers would file for bankruptcy protection, in the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago.
Other articles:
Wall St. Goliath Teeters Amid Fear of Wider Crisis
Bank of America in Talks to Acquire Merrill Lynch
Rush Is On to Prevent A.I.G. From Failing
Just one of these stories would be enough to make you stand up and go WTF....the combination of them all..........
This country is in SERIOUS FINANCIAL TROUBLE.
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2 comments:
Another Black Monday?
Hope not...
I thought it was going to come last Monday... We dodged that one, and hopefully we will dodge it again.
Obama has to jump on this issue... and also has to jump on the issue of the complete corruption in the Interior Dept. and has to point out other recent events and tie them to Bush/McCain. There has really been nothing from the Obama campaign to point these things out for the American voter. He has to attach Bush/McCain to these issues as often as possible...
While Bush was instigating war overseas with Iraq, Georgia/Russia, and other hot spots, the nations financial system was in slow collapse.
I did a post (I believe back in 06) where I stated that the current U.S. system was unsustainable. Either massive change was needed... or there would be these big collapses... according to experts who have been following this for some time.
I hope there won't be a run on banks..
Much of this is psychological at this point... in terms of ordinary Americans being jittery. Because there is supposed to be enough liquidity in the market... there are still ways to get loans. A lot of the fear is perpetuated by the media.
I just hope the fear doesn't eventually turn into a run on banks. Once that happens... well, I don't want to even think about what would come next.
But you can't continue the following:
*maintain huge deficits year after year, spending more than you take in.
*keep a huge total debt (that constantly growing)
*a weak dollar
*billions of wasted money for wars that you don't need
*a huge disparity in wealth/income...with the top 1 or 2 percent controlling such a huge amount of the economic pie.
*a desire to be an empire and to play global cop...even when it isn't in your best interests to do so.
* irresponsible tax cuts (so you don't have the money to pay for all the war and mischief that you want to stir up in the World)
*a declining health system
* borrowing against the future by skimming from Social Security and not putting all the money back and securing that program
*a declining education system (leading to a situation where we have dummies choosing Presidents instead of the well informed. And leading to a population that is struggling to compete in the new global economy)
*crumbling infrastructure
*a government that is corrupt and practically controlled by corporate lobbyists.
*debt financed by foreign powers
*dependence on foreign energy
*a declining World image
& more... and expect to have a prospering system.
When I often say that America is sick... I am referring to all of these different problems... it's sick socially, economically, culturally, politically, etc.
Hopefully we can make it through these last few months of the Bush administration... but I have to tell you, the last few months and weeks have been like watching a disaster film. Actually for me.. the last 3 Presidential administrations have been that way...like watching a disaster film (Clinton - especially the 2nd admin, and George W.).
It seems "Great minds" DO think alike AI_lol.
You're absolutely right! Obama had better jump on this issue.
In fact, IMO he should have made it his FIRST order of business this morning! I've lost count of how many EASY targets Dubya, McSenile and the Rethuglican party has provided for Obama and he continues to hold hos fire OR worse, he shoots blanks!
Regarding your foresight in 2006 on the collapse of the U.S. economy:
In March of 2007 I began posting my prediction, on another site that I frequent, warning that the U.S. economy was on a Fast-track to collapse anytime between then and March of 2009.
There were big ole RED flags the size of Russia waving in our faces so boldly that even a Blind man could see it coming!
I dare not start in on Dubya and how 8 years of his Ignorance and Arrognace has brought this country try to its knees or I'll be here all day!
But Barack has been handed, yet again, a gift_a golden opportunity_to make his case and DRIVE the message home.
If he continues to play if "safe" and present a lame-azz campaign, and he loses in November...he can cry "Racism" all day long.
But at the end of the day he'll have nobody but HIMSELF to blame!
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