Bloody Sunday: Wall Street Is Hit by Financial Tsunami

[Joseph Burkeson, CMI]

Those who have been following the financial news will not be surprised, those still wearing their rose-colored glasses will need to make a few adjustments.

Bloody Sunday: Wall Street Is Hit by Financial Tsunami
By CNBC.com With Wires | 14 Sep 2008 | 10:32 PM ET

The U.S. financial system was badly shaken Sunday by the expected failure of Lehman Brothers , the surprise takeover of Merrill Lynch and big asset sales by major insurer American International Group.

The developments indicate that chief executives on Wall Street and regulators in Washington are accepting that massive triage is necessary in the face of the 13-month old credit crisis and destructive U.S. housing bust.

"The U.S. financial system is finding the tectonic plates underneath its foundation are shifting like they have never shifted before," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey."It's a new financial world on the verge of a complete reorganization."

Growing expectations that Lehman will become Wall Street's most high profile bankruptcy since junk bond specialist Drexel Burnham Lambert collapsed in 1990 sparked a sell-off in U.S. asset prices.

Both US stock futures and the dollar plunged in reaction to the turmoil on Wall Street.

[Bob Elliott]

Originally Posted by jburkeson1

Those who have been following the financial news will not be surprised, those still wearing their rose-colored glasses will need to make a few adjustments.

Bloody Sunday: Wall Street Is Hit by Financial Tsunami
By CNBC.com With Wires | 14 Sep 2008 | 10:32 PM ET

The U.S. financial system was badly shaken Sunday by the expected failure of Lehman Brothers , the surprise takeover of Merrill Lynch and big asset sales by major insurer American International Group.

The developments indicate that chief executives on Wall Street and regulators in Washington are accepting that massive triage is necessary in the face of the 13-month old credit crisis and destructive U.S. housing bust.

"The U.S. financial system is finding the tectonic plates underneath its foundation are shifting like they have never shifted before," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey."It's a new financial world on the verge of a complete reorganization."

Growing expectations that Lehman will become Wall Street's most high profile bankruptcy since junk bond specialist Drexel Burnham Lambert collapsed in 1990 sparked a sell-off in U.S. asset prices.

Both US stock futures and the dollar plunged in reaction to the turmoil on Wall Street.

Stay the course.

[James H. Bushart]

Holy crap.

Are the feds going to pay out on all the retirement plans these guys manage?

[Nick Gromicko]

They are not bailing out Lehman. Lehman will file for bankrupcy.

[Greg Bell]

I wonder how many more hits this house of cards can stand before it all comes tumbling down? I think the decade of 2010 is going to make the 1930's look like a recession.

[Michael Larson]

Originally Posted by jbushart

Holy crap.

Are the feds going to pay out on all the retirement plans these guys manage?

Leman doesn't own the assets in those retirement plans the clients do.

[Michael Larson]

McCain wrong and Obama even more so.

They both want more regulation. That is the wrong answer.

McCain:

"The McCain-Palin administration will replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street. We will rebuild confidence in our markets and restore our leadership in the financial world."

Obama:

"The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store," Obama said in a statement. "Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression."

[Michael Larson]

Originally Posted by gbell

I wonder how many more hits this house of cards can stand before it all comes tumbling down? I think the decade of 2010 is going to make the 1930's look like a recession.

Wait until the reality of the gross underfunding and guaranteed failure of Medicare and Social Security kicks in.

It's not going to be pretty and none of the politicians have any desire to tell the American public the truth.

[nwagner]

Originally Posted by mlarson

McCain wrong and Obama even more so.

They both want more regulation. That is the wrong answer.

McCain:

"The McCain-Palin administration will replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street. We will rebuild confidence in our markets and restore our leadership in the financial world."

Obama:

"The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store," Obama said in a statement. "Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression."

Do you have any ideas for remedying the situation?

[Joseph Burkeson, CMI]

Originally Posted by mlarson

Leman doesn't own the assets in those retirement plans the clients do.

Where have you been, out listening to Republican propaganda again no doubt. Let me be the first to share the bad news with you Mr. My-money-is-safe-in-the-bank, last night the banking laws were changed to allow banks to use customer deposits to offset losses in other accounts. It appears that the one of the four Horsemen of the Apocalypse have been loosed on your bank & retirement accounts, ain't friggin' globalization grand, you will now be forced to fund the excesses of those you hate, just another Bush legacy in the making, happy motoring.

World’s banks to back $70bn liquidity pool

By Saskia Scholtes in New York and Krishna Guha in Washington
Published: September 15 2008 18:44 | Last updated: September 15 2008 18:44


Amid a dramatic series of private and public sector initiatives intended to mitigate the impact of the failure of Lehman Brothers, 11 of the world’s biggest banks have agreed to pool $70bn in a giant liquidity fund to help counter disruption in short-term funding markets.

The creation of the fund came in conjunction with moves from the US Federal Reserve to ease its lending terms dramatically – allowing investment banks to pledge equities and loans in return for cash – and the temporary suspension of a rule that normally prohibits deposit-taking banks from using deposits to help finance their investment banking subsidiaries. Both the Fed moves and the new private sector liquidity fund are specifically aimed at countering a feared disruption in the so-called triparty repo market, – a market in which investment banks secure short-term funding for their balance sheets, much of it from money market mutual funds.

[Michael Larson]

Originally Posted by nwagner

Do you have any ideas for remedying the situation?

Sure,

All of them would be politically unpopular.

Remember when Bush showed great courage in touching "the third rail of politics" and proposed a partial privatization of Social Security?

It was probably our last best chance at actually doing something.

Medicare is even even worse shape and when is the last time you heard a politician even mention it?

Neither party is talking about these very real issues and they are just hoping to put it off for the next guy to deal with.

And some wonder why all the cynicism over politics.

[Michael Larson]

Originally Posted by jburkeson1

Where have you been, out listening to Republican propaganda again no doubt. Let me be the first to share the bad news with you Mr. my-money-is-safe-in-the-bank, last night the banking laws were changed to allow banks to use customer deposits to offset losses in other accounts. .

Now that is just stupid Joey.

The question was regarding retirement accounts not bank deposits.

If you own funds managed by Lehman brothers it is you that owns the assets not Lehman.

They will go bankrupt but the client held assets remain.

[Michael Larson]

Too funny!

Some truly dim bulb left me this:

Bloody Sunday: Wall... 9/15/08 1:31 PM rong


I guess his "w" key doesn't work. I hope he spell checks his reports.

[Joseph Burkeson, CMI]

Originally Posted by mlarson

Now that is just stupid Joey.

The question was regarding retirement accounts not bank deposits.

If you own funds managed by Lehman brothers it is you that owns the assets not Lehman.

They will go bankrupt but the client held assets remain.

Really now Mikey, everyone knows your guy makes up the rules as he chooses. If they don't steal it outright they will inflate any value that remains. This thing doesn't look too good for your guy, hope you have a 2nd option ready.

BTW the reddy has all the earmarks of Decker.

[klott]

Originally Posted by gromicko

They are not bailing out Lehman. Lehman will file for bankrupcy.

Done! Chapter 11 70 Billion