Flighty
Posts: 9963
Joined: Thu Apr 05, 2007 3:07 am

RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 7:25 pm



Quoting Derico (Reply 48):
From what I'm hearing the US central bank will accept stocks as collateral for banks to get loans from them.

If true, that means our Fed and Treasury (Bernanke and Paulson) are both run by spinless pansies. And I don't mean that as a slur but that's how it is. Paulson has always been a self-congratulatory nitwit and I hope he doesn't think we need him and his cronies rather than some other superior bankers that would naturally take their place, should they go bankrupt.

There is nothing wrong with going bankrupt. But there is something wrong with Uncle Sam giving away free money in a misguided attempt to nationalize all banking and protect the weak.
 
Dougloid
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RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 7:26 pm



Quoting Derico (Reply 48):
hat is absolutely unbelieavable and desperate, in fact I didn't believe the report until I researched it online.

And of course you're going to share the results of your research with us?

Since when is it impossible as you say for a bank to lend money with stock certificates as collateral?

I used to own some Allied Signal stock and I'm quite sure that I could have taken them into the bank and borrowed money on them. At a discount to be sure.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Derico
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RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 7:37 pm



Quoting Dougloid (Reply 50):
And of course you're going to share the results of your research with us?

Are you telling me you need research to realize what this means?

So your company gets into a ball of debt, and you go to your nearest bank and since they won't give you further loans you offer them your company stock as a way to get a loan.

They would laugh you all the way to the mental institution.
My internet was not shut down, the internet has shut me down
 
PPVRA
Posts: 8270
Joined: Fri Nov 12, 2004 7:48 am

RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 8:05 pm



Quoting Beaucaire (Reply 20):
Something is profoundly wrong in the system !



It's been a wild roller-coaster ride with the Federal reserve for the past several years. There's your fundamental problem.

Now I hear rumors they might cut rates again, even further.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
LJ
Posts: 4989
Joined: Wed Nov 17, 1999 8:28 pm

RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 8:18 pm



Quoting Derico (Reply 52):

So your company gets into a ball of debt, and you go to your nearest bank and since they won't give you further loans you offer them your company stock as a way to get a loan.

They would laugh you all the way to the mental institution.

Derico, I can assure you this would be a normal transaction and not very strange. Alhtough doing it with your own shares doesn´t happen often. However if the market value is enough to post collateral then why not? The very uncommon thing here is that the central bank is allowing stock as collateral. Central bank rarely accept stock as collateral (central banks prefer high quality government bonds).
 
sv7887
Posts: 1259
Joined: Tue May 20, 2008 7:31 pm

RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 8:21 pm



Quoting Flighty (Reply 51):
Paulson has always been a self-congratulatory nitwit and I hope he doesn't think we need him and his cronies rather than some other superior bankers that would naturally take their place, should they go bankrupt.

Given that Hank Paulson was CEO of Goldman Sachs before being appointed Sec Treas he's more qualified than anyone to do this job.

If you know anything about the Financial Industry, you'll know that Goldman is second to none and no nitwits make it to the CEO position at that company. They are one of the few Ibanks to have minimal exposure to the subprimes and continue to make money.

Quoting Derico (Reply 52):
So your company gets into a ball of debt, and you go to your nearest bank and since they won't give you further loans you offer them your company stock as a way to get a loan.

You do it when the ensuing panic of the failure causes a run on the banks and destroys the financial system.

The government has intervened before on Chrysler's behalf and actually made money on that deal.
 
Flighty
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RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 9:05 pm



Quoting Sv7887 (Reply 55):
Given that Hank Paulson was CEO of Goldman Sachs before being appointed Sec Treas he's more qualified than anyone to do this job.

yeah, i don't like most of what he says and does so that's why I called him a nitwit... granted, he is probably a lot smarter than i am. Doesn't mean he's qualified -- or even eligible -- for the job he has, which i am not sure he is. He is now a regulator of, and financier to, all his friends.

he just wanted the job so he could go to the Chinese kremlin and hang out, and brag about it to his i-banker friends. He has certainly done little in the public eye of any benefit, other than go negotiate -- without success -- with the Chinese about currency issues. He thought he was such an insider over there, but the Chinese just patted him on the head and told him to get lost. i thought that was funny
 
sv7887
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RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 9:11 pm



Quoting Flighty (Reply 56):
He has certainly done little in the public eye of any benefit, other than go negotiate -- without success -- with the Chinese about currency issues. He thought he was such an insider over there, but the Chinese just patted him on the head and told him to get lost. i thought that was funny

Why would the Chinese budge? If we're so stupid to keep buying their crap whether it's poisoned dog food, Heparin, or now baby formula whose to blame? The Chinese can afford to peg their currency with all that money they get courtesy of US consumers.

We're part of the problem. Those Walmart low prices come from somewhere. Paulson doesn't have a leg to stand on with China as long as Americans are addicted to cheap Chinese crap.

He's done a decent job. This mess have been over a decade in the making.

This is a good article that gives a historical perspective:
http://online.wsj.com/article/SB1221...25334393.html?mod=special_coverage
 
Pyrex
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RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 9:43 pm



Quoting Oly720man (Reply 46):
Anyone with more financial know how than me explain how this'll work?

I have quite a bit of knowledge about banking (more limited in terms of insurance) and I am scratching my head as we speak...

Quoting Derico (Reply 48):
From what I'm hearing the US central bank will accept stocks as collateral for banks to get loans from them.

Are you serious? Where did you read that? That would be the most profoundly moronic thing for a Central Bank to do.

Quoting Dougloid (Reply 50):
Since when is it impossible as you say for a bank to lend money with stock certificates as collateral?

The problem here is not the fact that it is A bank, the problem is that it is THE Central Bank.

Quoting Sv7887 (Reply 55):
f you know anything about the Financial Industry, you'll know that Goldman is second to none

Well, as of today they are second to none in a pack of two (which also means they are the second worse out there). I wonder whether Morgan Stanley is next, and if that happens how long will Goldman last.
Read this very carefully, I shall write this only once!
 
Dougloid
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RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 9:58 pm



Quoting Derico (Reply 52):

Quoting Dougloid (Reply 50):
And of course you're going to share the results of your research with us?

Are you telling me you need research to realize what this means?

Of course not. I'm asking you to tell us where and how you found this out.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
User avatar
Aaron747
Topic Author
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RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 11:40 pm

http://finance.yahoo.com/tech-ticker...-Says-Brokers-Even-Goldman-Can%27t

Now Nouriel Roubini predicts there won't be any independent broker dealers left when the dust clears from all this, and the US needs to be ready for a much more hands on role played by sovereign funds in our financial system. Scary stuff indeed.

[Edited 2008-09-15 16:40:55]
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
QANTAS077
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RE: Sunday Passes Without Lehman Bros. Bailout

Mon Sep 15, 2008 11:41 pm

Quoting Pyrex (Reply 58):
Are you serious? Where did you read that? That would be the most profoundly moronic thing for a Central Bank to do.



Quoting QANTAS077 (Reply 38):
fed gets assets of "value" and the boys on Wall St get bonds which they convert into cash...AIG is getting the absolute shit kicked out of it as I type this..its now down to $4.77.



Quoting QANTAS077 (Reply 35):
just saw that interview...seems the Fed is now issuing bonds in exchange for assets, in other words the govt is keeping these companies alive. fucking crazy...

@ Pyrex, I've been saying it thru this entire thread, the fed is accepting assets for bonds which can be converted into cash, in other words the govt is propping these Wall St boys a new crotch...talk about adding to the debt of the nation.

Quoting Oly720man (Reply 46):
Anyone with more financial know how than me explain how this'll work? Or more precicely, why did it have to get to the stage of the rope being around the neck before this (possible) financial escape came about?

http://www.investopedia.com/terms/b/bridgeloan.asp

http://www.abc.net.au/lateline/content/2008/s2365248.htm

here's the transcript from Lateline @ Baroque.

[Edited 2008-09-15 16:58:40]
 
socalfive
Posts: 474
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RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 1:43 am



Quoting Derico (Reply 48):
From what I'm hearing the US central bank will accept stocks as collateral for banks to get loans from them.

That is absolutely unbelieavable and desperate, in fact I didn't believe the report until I researched it online.

Any country that did this would be excoriated by free market analysts as taking suicidal actions. Should that backfire, the central bank would be holding the bag for STOCKS from the entire private sector of the country, and most likely owe more than it would have in hard assets... Or what if that government needed cash and had mostly stocks it exchanged to prop up banks?

It would be forced to sell at massive losses on perhaps worthless paper. It would mean hyperinflation Zimwabwe style.

Well, except for the fact that that's exactly what they want. KEEP IN MIND, CENTRAL BANKS ARE NOT OWNED NOR ARE THEY CONTROLLED BY ANY GOVERNMENT! The US Federal Reserve (Which is neither Federal, nor is it a reserve) is owned privately and mostly by the banks they're now bailing out. This is the best example of ORGANIZED CRIME ever, and we pay they price in everything we buy one way or another. They own the Government of the United States.

Quoting ME AVN FAN (Reply 49):
Otherwise, the USA will have quite a number of partially state owned banks.

No, they won't, See my previous comment.

Quoting Sv7887 (Reply 55):
You do it when the ensuing panic of the failure causes a run on the banks and destroys the financial system.

And that's what's about to happen. I've been warning this shit for months.
 
us330
Posts: 3506
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RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 2:37 am

I'm temporarily working at 6th and 49th in Manhattan, so I took a gander over to the Lehman building between 49th and 50th on 7th. Quite a neat and impressive building, if you haven't seen it. News Crews and news vans were bumper to bumper at lunchtime today, while the usual gang of "the sky is falling capitalism dooms us all" nitwits gathered along the block.

It's kind of sad, really. I've met several people from Lehman, and had the chance to visit their offices about six months ago, and all I can say is good things about people in the lower-level management and analyst positions (aka the ones that didn't make the decisions that led to this screwup). I feel especially bad for several kids from my class who literally just started working there this past july--talk about an introduction to the Real World.

This is just one giant mess we have going on here, and it still needs to fully unravel. While it's easy to speculate as to what were the key events whose final outcome was setting off the row of dominoes that feel last june, I don't think we will have all the answers until we are fully un-tied.
 
baroque
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RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 8:20 am



Quoting QANTAS077 (Reply 60):
@ Pyrex, I've been saying it thru this entire thread, the fed is accepting assets for bonds which can be converted into cash, in other words the govt is propping these Wall St boys a new crotch...talk about adding to the debt of the nation.



Quoting QANTAS077 (Reply 60):
http://www.abc.net.au/lateline/content/2008/s2365248.htm

Seems to be a bit of cognitive dissonance going on here.

Going down the transcript:
DEREK SHEARER, GLOBAL AFFAIRS DIRECTOR OCCIDENTAL COLLEGE L.A.: Well there's some worry it will be as bad as the 1987 black Monday.

What's interesting is that we've already had the bankers meeting privately, sort of as JP Morgan did almost 100 years ago, when we had a similar crisis.

But I have a lot of faith in the short run in Hank Paulson. He knows how to manage the short term crisis. The question is how is our political system going to respond to this crisis, especially in the middle of an election.


Oh well somebody has faith in Paulson for SOMETHING, but maybe not to solve all aspects.

TONY JONES: I will come to that in detail, but so many people have been saying the credit crisis is over, but clearly not.

Those thoughts have been swept away. I mean how deep could the bottom of this well be?

DEREK SHEARER: Well we don't know because there's lots of things that have been created in the financial market; there are these derivatives, there are these credit default swaps.

There are billions of dollars in these credit default swaps that we don't know who has them or who's indebted to whom, and none of that has been sorted out yet.

It could be, and I think will be, an extensive mess. The question is will the Wall Street impact reach down to main street? And that's part of the political question.


Hmmm, more to come!

DEREK SHEARER: Well it's happened through the credit crunch that, of course, lots of people have lost value in their homes, or in some cases have lost their homes.

But it could get much worse because as the market drops then all economic activity can start to contract.

People's pensions that are invested in Wall Street start to get effected and then you have these fears that you're going to recreate the Great Depression of the '30s. I don't think that will happen.

I don't think that will happen, I think we've learnt a lot from then, but fear can be a powerful motivator for people.


Probably explains the falls in oil prices and metals too. Rather than rejoicing at cheaper oil, one thing might be to ponder if the newer price levels represent newer levels of abilitiy to purchase!!

MICHAEL WEST, FAIRFAX COLUMNIST: Well I think the answer to that is we're going to find out in the next couple of hours when Wall Street opens in 40 minutes.

Confidence is the crux of the problem here, because there's a lot of money swilling around the world.

But if it's deemed there's going to be a knock on effect from Lehman Brothers' various exposures to hedge funds, and as the Ambassador points out to default swaps, derivatives particularly is a danger point for Lehman Brothers.

And I get the feeling that the bailout of Bear Stearns, had Lehman been the first to go then Wall Street, that Washington would have moved to ball out Lehman as well, but at this point the moral hazard has become too much.


Looks as if being rescued or failing depends how lucky you get.

MICHAEL WEST: ........

...., you know these are the counterparts, counter parties rather, to a lot of transactions that Lehman and the other Wall Street players are involved in and there will be direct hits taken.

If Lehman for instance has to write down a portfolio of some structured finance products, as National Australia Bank did the other day, and I {Presumably a typo for "it"} took a 90 per cent down on CDOs, or collatoralised debt obligations.

Makes me wonder where ALL of the other 90% went. Mortgages for example cannot be worth only 10% of their face value - can they?


On REGULATION:

TONY JONES: What happened here, Derek Shearer? Did these investment bankers just get too clever for themselves, and create sort of investment sort of mechanisms that are just beyond well, rationality?

DEREK SHEARER: I think the story at one level is a simple one, which is that for eight years we've had a government in power in the United States that doesn't really believe in regulation; didn't have much interest in overseeing the market.

Their view was these are smart people, well you know, they know what they're doing, they know they have these new devices they've created, they know how to manage risk, and we'll just let it run its course and everything will be fine.

And I think, you know, you'd think we'd learn from history that you can't have unregulated markets, that people do act in criminal ways and some of the subprime crisis that started this off was based in criminality and lying.


I will quote the purchase of "securities" bit at length, and it came from West but Shearer did not contrdict him.

MICHAEL WEST: There's been three major instances of corporate welfare. The first was Bear Stearns, where they effectively underwrote the sale, underwrote JP Morgan's acquisitions of Bear Stearns; they said if there's some bad stuff in there we'll take care of it for you.

The next one was the Fannie Mae, Freddie Mac huge massive giant bailout of these mortgage companies; nationalisation, the biggest nationalisation since World War II.

And then a week later now we have this situation where they have cut, they're cutting Lehman loose I think, because they feel as though they can't... there's probably others in the pipeline such as AIG which you mentioned.

Buy yesterday, in the US early this morning, there was a message from the Fed, a release was put out saying we are now going to loosen up the window for which investment banks on Wall Street can get their assets that they can't sell and they can swap them into the Federal Reserve for treasuries, which they can then immediately short and turn into cash.

TONY JONES: Yes, so how's that not propping up with cash? I mean it is effectively, isn't it?

MICHAEL WEST: It is; it's the same thing. Basically you're swapping the stuff you can't sell, there's a time frame on it, but that can be rolled over.

And, but they just... it used to be AAA rated stuff, not that always matters with CDOs and so on as we know, as we know. But now that's relaxed down to not being AAA, anything investment grade which as I understand it is BBB and above.

TONY JONES: How dangerous is that, put it in layman's interprets?

MICHAEL WEST: Well it just means you've got a lot of stuff that can't be sold, that is being effectively taken onto the balance sheet of the US Government, via the US Federal Reserve.

And the balance sheet isn't that huge, I might add. And in return these US Treasury bonds are being swapped to the merchant banks which can then turn into cash.

TONY JONES: Derek Shearer, this is a shockingly indebted government getting itself potentially further into debt but doing it under the table?

DEREK SHEARER: Absolutely, I mean this is a government that came in with a surplus that President Clinton had created, and they blew the surplus in what I would argue were irresponsible tax cuts, and in financing a war, but didn't raise the taxes to pay for it.

We're also in a very complicated international situation in that we borrowed money, mainly from the Chinese, to some extent from Japan, to both finance our foreign policy but also finance our consumption.

So as we've seen, these crises are not limited to just one country. I mean it's what I saw the good news and the bad news. We have this new globalised economy in which everybody is in part a member and no one's in charge, yet you could say well that's good news.

The bad news is nobody's in charge either. And so who's in charge? Well, by default Hank Paulson's in charge at the moment, and it comes down to him to see if he can stem the crisis.

But it raises these larger questions about do we need what I call a new deal, both in the United States, but also globally? Because part of the new deal that came out of the depression in the Roosevelt administration was also a series of international economic institutions like the IMF and the World Bank.

But in many ways, those have been by passed by this new age of globalisation, and the incredible speed with which we can spend money around the globe; the way in which we can create these derivative packages.


An interview with George Soros is due later this week on Lateline.
 
oly720man
Posts: 5813
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RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 8:26 am



Quoting QANTAS077 (Reply 60):
Quoting Oly720man (Reply 46):
Anyone with more financial know how than me explain how this'll work? Or more precicely, why did it have to get to the stage of the rope being around the neck before this (possible) financial escape came about?

http://www.investopedia.com/terms/b/bridgeloan.asp

http://www.abc.net.au/lateline/conte...8.htm

I have no problems with a bridging loan, what I find strange (or just don't understand) is that AIG is loaning to AIG through the assets of its other companies and it has to get the nod from New York State before it does it. Which leads me to believe it can't be a run of the mill financial deal otherwise why would it need the Governor's approval? Is it because there are some financial arrangements that need legal (through the authorities) approval before getting a go ahead or what?
wheat and dairy can screw up your brain
 
QANTAS077
Posts: 5196
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RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 1:34 pm

AIG down below $2 a share & WaMu is following south too.
 
Flighty
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Joined: Thu Apr 05, 2007 3:07 am

RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 2:40 pm



Quoting Socalfive (Reply 62):
And that's what's about to happen. I've been warning this shit for months.

Whatever. If 5 large i-banks collapse, so be it. I really don't care. The global financial system can take it. Businesses fail when they take inappropriate risks. There will be other banks to replace them within weeks or months.

We have this conventional wisdom that certain banks are somehow Holy, and they may hold the keys to our financial system.

Well, they certainly have participated (and sometimes created) aspects of our financial system. That does not mean these firms are Holy! Let them die if they can't legally and mathematically survive! There will be replacement firms. Look at their prior profits. There WILL be replacements if we allow rancid firms to fail.

Look at Alitalia. It's completely insolvent. If Italy would let Alitalia fail, their services would be replaced -- probably with a superior company -- within days or weeks! There could even be a native Italian company to replace Alitalia... if only the crooked old firm is allowed to FAIL. This is a crucial point. The global system can make lemonade out of lemons. All it takes is demand and a clean market.
 
ME AVN FAN
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RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 4:35 pm



Quoting Socalfive (Reply 62):
Otherwise, the USA will have quite a number of partially state owned banks.
--
No, they won't

-
But what will happen if some of the banks who get government credits will not be able to re-pay? Will the credits be stretched into long-term credits or will those banks be forced into bankruptcy ?

Quoting Flighty (Reply 67):
If Italy would let Alitalia fail, their services would be replaced -- probably with a superior company -- within days or weeks!

-
not really. Many services would NOT be replaced and many or even most only after a fairly long time. This is why Mr Berlusconi tries to save Alitalia.

Quoting Flighty (Reply 67):
There could even be a native Italian company to replace Alitalia.

-
No, there could not. As no Italian company would have the finance, the will and the determination to do so. Mr Berlusconi who not only is a politican but also a business tycoon for instance is quite willing to invest "government-money" but does not exactly look eager to invest any single Euro of his own money
 
Flighty
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RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 5:09 pm



Quoting ME AVN FAN (Reply 68):
not really. Many services would NOT be replaced and many or even most only after a fairly long time. This is why Mr Berlusconi tries to save Alitalia.

If you don't think MXP can support a profitable hub -- perhaps by LH or AF -- then we disagree.

Flights that lack sufficient demand to pay for a jet, would not be served in the future. Nor should they be served today.
 
ME AVN FAN
Posts: 12970
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RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 5:18 pm



Quoting Flighty (Reply 69):
If you don't think MXP can support a profitable hub -- perhaps by LH or AF -- then we disagree.

-
I am absolutely convinced that MXP is a good and profitable hub for a decently managed company, but this was not the question above. LH and/or AF/KLM of course COULD establish a hub there, independently or in conjunction with whichever Italian company.
-
Reality however has shown that few of the flights AZ shifted from MXP to FCO were replaced by anybody, in spite of most of these flights having been profitable, profitable as such I mean.
 
QANTAS077
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RE: Sunday Passes Without Lehman Bros. Bailout

Tue Sep 16, 2008 10:46 pm

this has to be the deal of a lifetime, Barclay's has agreed to buy Lehman Brothers for $2billion...
 
ME AVN FAN
Posts: 12970
Joined: Fri May 31, 2002 12:05 am

RE: Sunday Passes Without Lehman Bros. Bailout

Wed Sep 17, 2008 6:25 am



Quoting QANTAS077 (Reply 71):
this has to be the deal of a lifetime, Barclay's has agreed to buy Lehman Brothers for $2billion...

-
the point apparently is that Barclays Bank only buys selected assets but NOT the company as such, which is THE difference
 
LJ
Posts: 4989
Joined: Wed Nov 17, 1999 8:28 pm

RE: Sunday Passes Without Lehman Bros. Bailout

Wed Sep 17, 2008 7:12 pm



Quoting Flighty (Reply 67):

Whatever. If 5 large i-banks collapse, so be it. I really don't care. The global financial system can take it. Businesses fail when they take inappropriate risks. There will be other banks to replace them within weeks or months.

I usually agree with such a statement, however if you look at what happened the past few days the conclusion that the global financial system cannot take extremely big failures. Just look at what happened to the overnight interest rate. It doubled and why? The entire market came to a standstill due to fear. Thus the only way to at least calm the market a little bit down was not to let AIG fail. The market just couldn´t absorb such a big company go bankrupt so close after the failiure of Lehman.

Furthermore, if you have some knowledge of the current financial system you know that one big failure may result in a domino effect. And this increases uncertainty even more.
 
Flighty
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RE: Sunday Passes Without Lehman Bros. Bailout

Wed Sep 17, 2008 7:54 pm

I agree with you there are limits. Not necessarily against the AIG boost. The nation probably would not be well positioned to take an AIG failure. I don't think anybody realistically entertained the idea that AIG should fail. They would be re-insured by others, who would subsequently fail. The re-insurance market is ultimately circular. Everybody re-insures everybody else. More or less. This protects against 1 firm's problems. But it does not protect against endemic widespread problems.


The one thing I advocate is to the extent possible, let those "responsible" within each enterprise lose their jobs, lose their professional credibility and be seen as what they are -- destroyers of capital. Would you want to employ somebody who lost over a billion dollars for their last employer? No. Nor should we as a society let those people melt back into the woodwork. There was an intellectual debate over risk and certain people lost the debate. They shouldn't get away looking like winners. They are losers.

So that's the main reason why bailouts should be kept to a minimum, you've got to keep it real. A real market is better than a fake market. If their math sucks then I want to see their results suck. Every failure in financial markets should increase profitability for new entrants in the finance field. Maybe it is time for a great new bank to be formed, out of the ashes of discredited banks that could not survive the free market. Ordinarily, banks are so "successful" they block all newcomers. Now, if we are a nation/world without enough banks, new banks will develop. If we could pursue this in an orderly fashion then I advocate it. We need a functioning credit market but we shouldn't prop up today's participants just because we need that market. There must be another way -- temporary govt guarantees with an expiration date in 300 days, something like that.
 
sv7887
Posts: 1259
Joined: Tue May 20, 2008 7:31 pm

RE: Sunday Passes Without Lehman Bros. Bailout

Wed Sep 17, 2008 8:02 pm



Quoting Flighty (Reply 74):

The one thing I advocate is to the extent possible, let those "responsible" within each enterprise lose their jobs, lose their professional credibility and be seen as what they are -- destroyers of capital. Would you want to employ somebody who lost over a billion dollars for their last employer? No. Nor should we as a society let those people melt back into the woodwork. There was an intellectual debate over risk and certain people lost the debate. They shouldn't get away looking like winners. They are losers.

I completely agree with you. The stockholders of Bear Stearns, Lehman, Merrill, and AIG are taking the brunt of this one.

I personally think those CEOs who presided over this mess be blacklisted and publicly humiliated. The Boards and Stockholders need to reform CEO pay packages period. If they aren't going to police their own company, how dumb are they?
 
MadameConcorde
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Joined: Fri Feb 23, 2007 5:08 pm

RE: Sunday Passes Without Lehman Bros. Bailout

Wed Sep 17, 2008 8:09 pm

Dow Down over 450 points AFTER $85 Billion Buyout of AIG

http://finance.yahoo.com/marketupdate/overview?u
There was a better way to fly it was called Concorde
 
MadameConcorde
Posts: 9265
Joined: Fri Feb 23, 2007 5:08 pm

RE: Sunday Passes Without Lehman Bros. Bailout

Wed Sep 17, 2008 8:15 pm

Wall Street Panics: Investors Flood Out of Money Markets and Banks to T-Bills

http://moneynews.newsmax.com/headlin...rket_t_bill/2008/09/17/131686.html


As new evidence emerges that major money market funds have significant exposure to the collateralized debt obligation (CDO) crisis, worried investors are withdrawing billions from their banks and money market funds and pouring them into government-backed Treasury Bills, or T-Bills.


Morgan, Goldman Plummet as Crisis Worsens

http://moneynews.newsmax.com/headlin...nley_merger/2008/09/17/131604.html

[Edited 2008-09-17 13:21:30]
There was a better way to fly it was called Concorde
 
LJ
Posts: 4989
Joined: Wed Nov 17, 1999 8:28 pm

RE: Sunday Passes Without Lehman Bros. Bailout

Wed Sep 17, 2008 9:00 pm



Quoting Flighty (Reply 74):

The one thing I advocate is to the extent possible, let those "responsible" within each enterprise lose their jobs, lose their professional credibility and be seen as what they are -- destroyers of capital.

I agree 100%. The first lawsuit is already files in the AIG case. A New Orleans based pension fund is suing AIG´s former directors for the absent of good risk controls

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