Sunday, September 14, 2008

It's Going Down ... Lehman Brothers Collapses - Your Bank To Follow

In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, hurtled toward liquidation after it failed to find a buyer, people briefed on the deals said.

The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of tens of billions of dollars in losses because of bad mortgage finance and real estate investments.

They culminated a weekend of frantic around-the-clock negotiations, as Wall Street bankers huddled in meetings at the behest of Bush administration officials to try to avoid a downward spiral in the markets stemming from a crisis of confidence.

“My goodness. I’ve been in the business 35 years, and these are the most extraordinary events I‘ve ever seen,” said Peter G. Peterson, co-founder of the private equity firm the Blackstone Group, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration.

What will happen to Merrill’s 60,000 employees or Lehman’s 25,000 employees remains unclear. Worried about the unfolding crisis and its potential impact on New York City’s economy, Mayor Michael R. Bloomberg canceled a trip to California to meet with Gov. Arnold Schwarzenegger. Instead, aides said, Mr. Bloomberg spent much of the weekend working the phones, talking to federal officials and bank executives in an effort to gauge the severity of the crisis.

The weekend that humbled Lehman and Merrill Lynch and rewarded Bank of America, based in Charlotte, N.C., began at 6 p.m. Friday in the first of a series of emergency meetings at the Federal Reserve building in Downtown Manhattan.

The meeting was called by Fed officials, with Treasury Secretary Henry M. Paulson Jr. in attendance, and it included top bankers. The Treasury and Federal Reserve had already stepped in on several occasions to rescue the financial system, forcing a shotgun marriage between Bear Stearns and JPMorgan Chase this year and backstopping $29 billion worth of troubled assets — and then agreeing to bail out Fannie Mae and Freddie Mac.

8 comments:

CNu said...

Nouriel Roubini drops science on what's coming....,

Anonymous said...

This is what happens after decades of parasitic Jewish bankers quietly sucking the lifeblood out of your contry...

Happens to every country they infect.

Like I said, the real terrorists are financial/societal and wear skullcaps, not turbans.

All-Mi-T [Thought Crime] Rawdawgbuffalo said...

i wrote about this last year and read my post today if u can Slacking on your Macking

Anonymous said...

I knew the real estate market would crash, but I didn't realize the extent the crash would have. I didn't know (but should have) that the mortgaged back securities market would cause such widespread mayhem. AIG is going under for insuring against capital losses?? Can't believe they'd be some dumb!

As far as the bankers go, I can't figure out if this is intentional or not. They are losing too.

Wesley Gibson said...

Get that spot in costa rica ready DV. You might have to have some company...

Anonymous said...

So, now Obama is blaming this on Repubs and saying we need more government assistance. And where is all this money going to come from??? Taxpayer shellgame, anyone? Yea, let's give people more handouts, when our own country is already more bankrupt than Lehman!

Blaming the Jewish bankers/FRB would have been a hella lot more accurate - but none of the 4 electees would dare bite the hand that they feed..

McCain is more agnostic and says we need an expert commission to study the problem. IOW, he's basically clueless too.

You see, this is where "charismatic cheerleaders" fall short - when it comes time to actually do the real calculus.

But both are just politicking instead of having a fucking clue about what has really been going on over the last several decades...

This is where we need a real "bean counting" candidate like Ron Paul who understands our monetary system. When the rubber really meets the road, we need a SMART, not just charismatic, leader.

CNu said...

As discussed y'day magne;

Lessons From the Banking Meltdown.

Cash is King!!!!!

Anonymous said...

^ Actually, the next thing to collapse could be our FRB fiat currency - which is now backed by nothing but trillions of debt.

And when the true value of this Jewish funny money finally corrects...like housing values and lender assets...

Well in that event, cash is trash.