PDA

View Full Version : Economics Lehman Brothers preparing for liquidiation


eazyb81
09-14-2008, 04:17 PM
I know most of you probably don't care, but the financial industry is in complete turmoil. A potential deal to acquire Lehman Brothers has fallen through, so it looks like they will file for Chapter 7 and go through with liquidation. No bailout.

http://www.cnbc.com/id/26704405

Also, Bank of America is rumored to be acquiring Merrill Lynch, and a deal could be announced as soon as tonight.

Finally, AIG will announce a major restructuring tomorrow.

The markets are going to be absolutely nuts tomorrow. If anyone's interested, CNBC will have a special on at 7:00pm to discuss the latest news on Lehman, Merrill, BofA, and everything else.

banyon
09-14-2008, 04:21 PM
I think this qualifies as important news.

Ultra Peanut
09-14-2008, 04:24 PM
Sweet Jesus.

Hydrae
09-14-2008, 04:25 PM
Is that the sound of the toilet flushing on the economy I hear?

eazyb81
09-14-2008, 04:28 PM
Is that the sound of the toilet flushing on the economy I hear?

Pretty much. Prepare for a global economic slowdown for the next few years.

dirk digler
09-14-2008, 04:28 PM
Economic Meltdown

We haven't hit bottom yet

Silock
09-14-2008, 05:01 PM
This.

Sucks.

Fat Elvis
09-14-2008, 05:06 PM
Economic Meltdown

We haven't hit bottom yet

Not by a longshot, unfortunately.....

banyon
09-14-2008, 05:06 PM
Banks seen offering plan to restore confidence
By JOE BEL BRUNO and MARTY CRUTSINGER 33 minutes ago

NEW YORK (AP) As the outlook for Lehman Brothers' future appeared to dim Sunday, U.S. and foreign banks joined forces to create a plan aimed at inoculating the global financial system against the investment bank's possible failure, a top investment banking official said.

Banks are in tense talks to create a pool of money worth up to $50 billion to lend troubled financial companies, the official said on condition of anonymity because the discussions were ongoing. And officials at the U.S. Treasury and the Federal Reserve are expected to say they are prepared to be more generous in the Fed's emergency lending program for commercial and investment banks .

The plan comes as top government officials and Wall Street executives hold marathon meetings to save Lehman Brothers. The meetings have failed to find a buyer for the troubled 158-year-old investment bank, raising worries that its likely collapse would disrupt global financial markets.

The official also said the U.S. Treasury Department and the Federal Reserve are pushing Bank of America Corp. to buy Merrill Lynch & Co., though talks are still preliminary.

Expectations that Lehman would survive as a company dimmed Sunday afternoon after Barclays PLC withdrew its bid to buy the investment bank.

Barclays' and Bank of America Corp. were considered front-runners to buy Lehman.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) The outlook for Lehman Brothers' future seemed dim Sunday after Barclays PLC withdrew its bid to buy the beleaguered investment bank and government officials and Wall Street bankers remained at an impasse about a rescue plan.

The withdrawal of Barclays, which along with Bank of America Corp. was considered a front-runner to buy Lehman, demonstrated how complicated negotiations over Lehman's fate had become. And, Sunday afternoon, The Wall Street Journal reported that Bank of America and Merrill Lynch & Co. were involved in merger talks which would knock Bank of America out of contention as well.

The Lehman talks were aimed at selling the investment bank in whole or in part. The sticking point was the potential buyers' insistence that the Bush administration offer the kind of help it did in brokering the buyout of Bear Stearns Cos. last March, when the government agreed to a $29 billion loan to buyer JPMorgan Chase & Co. from the Federal Reserve. But Treasury Secretary Henry Paulson said the government will not help close a Lehman deal.

Lehman declined to comment on the talks.

If no deal were reached, it raised the specter of a bankruptcy and liquidation of the 158-year old investment bank. Bankers and investment banking officials briefed on the talks described them as being both complicated and fluid, and that there was still hope that an agreement can be brokered or that new bidders might emerge. They spoke on condition of anonymity because talks were ongoing.

There were signs that Lehman Brothers Holdings Inc. might be edging closer to a bankruptcy filing, with several reports that it has hired Weil, Gotshal & Manges, the law firm that handled the collapse of investment firm Drexel Burnham Lambert in 1990.

Moreover, there was also an emergency trading session being held at the International Swaps and Derviatives Association to "reduce risk associated with a potential Lehman Brothers Holdings Inc. bankruptcy." The ISDA, which arranges trades for derivatives, said it was allowing customers to make trades and unwind positions linked to Lehman but that those trades would be voided if no filing occurs before midnight.

Barclays, Britain's third-largest bank, backed out of talks on Sunday after emerging during the morning as a front-runner to take over Lehman's assets, according to a person inside the U.K. bank who spoke on condition of anonymity, in keeping with company policy. The person, who had knowledge of the talks, said the decision was "very unlikely" to change. He said Lehman was attractive but did not meet what he described as Barclay's stringent requirements.

The Journal said on its Web site that after Bank of America was unable to reach a deal for Lehamn, it turned instead to a possible combination with Merrill, considered a better fit for the bank.

Several private-equity firms were also believed to be interested in Lehman's assets. Bankers and officials with direct knowledge of the discussions described the talks as complicated Sunday morning. Top officials from the Federal Reserve and the Treasury Department and executives from several Wall Street banks were huddled at the New York Fed's downtown Manhattan headquarters for a third day seeking a solution to Lehman's financial crisis. Failure could prompt skittish investors to unload shares of financial companies, a contagion that might affect stock markets around the world when they reopen Monday. Asian markets will begin trading Sunday night Eastern time.

Paulson, Timothy Geithner, president of the New York Fed, and Securities and Exchange Commission Chairman Christopher Cox were among those taking part in the meetings. Federal Reserve Chairman Ben Bernanke is actively engaged in the deliberations but wasn't in attendance.

Paulson went into the weekend discussions insisting that government money should not be used to resolve Lehman's problems, arguing that the current situation is different from the sale of Bear Stearns to JP Morgan Chase six months ago in which the Fed put up $29 billion in loans.

In Lehman's case, Paulson believed that financial markets have been aware of Lehman's problems for a much longer period and have had time to prepare and investment banks also now have the ability to obtain emergency loans directly from the Fed, a crucial support that they did not have back in March when Bear Stearns was rescued.

A person familiar with Paulson's thinking said on Friday that Paulson was "adamant that there be no government money in the resolution of this situation." This person, who spoke on condition of anonymity because of the sensitivity of the negotiations, said on Sunday that Paulson had not changed his views during the three days of talks.

Paulson's tough bargaining stance received support from outside observers Sunday, who argued that the government had no choice but to draw a line in the sand.

"If Treasury put money into the Lehman deal, then going forward no deal would get done without Treasury help," said Mark Zandi, chief economist at Moody's Economy.com. "Every potential buyer would wait until Treasury stepped in and that would mean Treasury would be on the hook for a lot more bailouts."

In the Lehman talks, bankers and government officials were also trying to tackle a broader agenda that includes problems at American International Group Inc. and Washington Mutual Inc., said the investment bank officials, who were briefed on the talks.

AIG, the world's largest insurer, and WaMu, the nation's biggest savings bank, have taken steep losses during the past year from risky investments. Investors, worried they do not have enough cash on their balance sheets to withstand further hits, unloaded their shares on Friday.

Lehman put itself on the block earlier last week. Bad bets on real-estate holdings which have factored into bank failures and caused other financial companies to founder have thrust the firm in peril. It has been dogged by growing doubts about whether other financial institutions would continue to do business with it.

Richard S. Fuld, Lehman's longtime CEO, pitched a plan to shareholders Wednesday that would spin off Lehman's soured real estate holdings into a separately traded company. He would then raise cash by selling a majority stake in the company's unit that manages money for people and institutions. That division includes asset manager Neuberger Berman.

AP Business Writer Raphael Satter contributed to this story from London.


http://ap.google.com/article/ALeqM5j12hiaDX0-3jvsfNj247sUyBiqHgD936P3JO0

penchief
09-14-2008, 05:07 PM
Economic Meltdown

We haven't hit bottom yet

But look at the bright side. Some people made out like bandits.

Did I say bandits?

eazyb81
09-14-2008, 05:08 PM
Buddy at Lehman just texted me, said people were crying, fighting, and generally just didn't know what to do with themselves.

It really sucks, some good people lost a TON of money and now have practically nothing to show for it.

irishjayhawk
09-14-2008, 05:09 PM
At what point can we declare this the second coming of the Great Depression?

I mean, it isn't right now, but it could very well be. We don't even see the light yet.

banyon
09-14-2008, 05:10 PM
The sticking point was the potential buyers' insistence that the Bush administration offer the kind of help it did in brokering the buyout of Bear Stearns Cos. last March, when the government agreed to a $29 billion loan to buyer JPMorgan Chase & Co. from the Federal Reserve. But Treasury Secretary Henry Paulson said the government will not help close a Lehman deal.

Now these financial companies all "expect" to all be bailed out. It's so unfair to these high net worth investors! Have your taxpayers pay us!

Silock
09-14-2008, 05:10 PM
At what point can we declare this the second coming of the Great Depression?

I mean, it isn't right now, but it could very well be. We don't even see the light yet.

We've still got a ways to go before that happens.

We've just got to hope that the financial gurus pull some trickery and keep this thing afloat without ****ing us over for the next 50 years.

irishjayhawk
09-14-2008, 05:13 PM
We've still got a ways to go before that happens.

We've just got to hope that the financial gurus pull some trickery and keep this thing afloat without ****ing us over for the next 50 years.

I'm not going to pretend I know my ass from my elbow with these acquisitions, fall through, etc.

I just know when I hear good news and when I hear bad news.

I haven't heard good news in a while.

eazyb81
09-14-2008, 05:14 PM
Now these financial companies all "expect" to all be bailed out. It's so unfair to these high net worth investors! Have your taxpayers pay us!

If I were BofA or Barclay's, I would want the Fed to help me out to if I was going to take all Lehman's toxic shit and put it on my balance sheet. They won't know how bad it is for awhile, and they would only be acquiring a small amount of tangible assets and of course the employees, who could leave at any time. Not a worthy gamble.

eazyb81
09-14-2008, 05:15 PM
It's hilarios that there's really no news coverage of this, yet we get Britney Spears and Miley Cyrus stuffed down on collective throats 24/7. People aren't going to know what hit them.

Silock
09-14-2008, 05:17 PM
I'm not going to pretend I know my ass from my elbow with these acquisitions, fall through, etc.

I just know when I hear good news and when I hear bad news.

I haven't heard good news in a while.

That's part of the problem. Much of economics, especially global economics, is largely a giant exercise in psychology. Most of the money isn't actually tied to anything tangible, and is just a perceived value for services rendered. That makes it really susceptible to "good news" and "bad news." And then, of course, there is the very real screwups in the lending industry that certainly don't help things.

irishjayhawk
09-14-2008, 05:19 PM
It's hilarios that there's really no news coverage of this, yet we get Britney Spears and Miley Cyrus stuffed down on collective throats 24/7. People aren't going to know what hit them.

Sad but true.

banyon
09-14-2008, 05:23 PM
It's hilarios that there's really no news coverage of this, yet we get Britney Spears and Miley Cyrus stuffed down on collective throats 24/7. People aren't going to know what hit them.

I doubt that people knew what was happening in 1929 either. They were too busy flappin' and speakeasyin'.

Smed1065
09-14-2008, 05:54 PM
I am starting to smell the financial of Japan a few years back. I am no financial wizard but I do no bad signs.

eazyb81
09-14-2008, 07:19 PM
AIG now asking the Fed for a loan from the discount window, which is completely unprecedented.

I think I'm going to ask the Fed if I can go to the discount window, I've got some school loans to pay off.

***SPRAYER
09-14-2008, 07:32 PM
I know this might come as a shock, but I actually worked on Wall Street for a spell. I worked for Citibank, Deutsche Bank, and a brokerage firm.

Let me tell you---

These joints are run by as*holes. I'm not surprised by any of this.

Fat Elvis
09-14-2008, 07:44 PM
I know this might come as a shock, but I actually worked on Wall Street for a spell. I worked for Citibank, Deutsche Bank, and a brokerage firm.

Let me tell you---

These joints are run by as*holes. I'm not surprised by any of this.


I guess we now know the origin of your username.....

WilliamTheIrish
09-14-2008, 07:44 PM
This is unbelievable. I've been watching this special all night and I don't mind telling you this is making me nervous.

WilliamTheIrish
09-14-2008, 07:45 PM
BTW, where's Stewie?

Fat Elvis
09-14-2008, 07:45 PM
BoA just bought Merrill Lynch

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


At a 70% premium no less.....

Friendo
09-14-2008, 08:20 PM
BTW, where's Stewie?

out on the ledge:

http://www.youtube.com/watch?v=q1ZV4Mx7tw8

Nightfyre
09-14-2008, 08:24 PM
Sigh.

jiveturkey
09-14-2008, 08:37 PM
How does this really effect everyday people? Didn't Leham lose their ass in real estate?

How will this effect the economy as a whole?

eazyb81
09-14-2008, 08:54 PM
I know this might come as a shock, but I actually worked on Wall Street for a spell. I worked for Citibank, Deutsche Bank, and a brokerage firm.

Let me tell you---

These joints are run by as*holes. I'm not surprised by any of this.

Maybe, but a lot of companies in this country and around the world are run by assholes.

I also have experience in the industry (hoped to work on Wall Street after graduation in May......ugh), and there are a ton of good people that work up there that had nothing to do with the problems facing these firms, but are now taking the brunt of it.

eazyb81
09-14-2008, 09:00 PM
How does this really effect everyday people? Didn't Leham lose their ass in real estate?

How will this effect the economy as a whole?

We're on the brink of a global economic downturn, not just a financial crisis, and this will affect everyone. Housing prices need to bottom, unemployment needs to turnaround, liquidity needs to come back to the markets, and consumer confidence needs to come back. Considering that there aren't any positive signs in any of these areas, this is just the start of some crappy times.

Jenson71
09-14-2008, 09:04 PM
Is this going to lower the dollar? I have some student loans that I wouldn't mind getting practically smaller.

L.A. Chieffan
09-14-2008, 09:04 PM
The economy is rebuilding. Get over it.

Amnorix
09-14-2008, 09:08 PM
I am starting to smell the financial of Japan a few years back. I am no financial wizard but I do no bad signs.


While this is all bad, it's acctually more or less the opposite of the 10 year malaise that Japan had. Part of the problem there was the government PREVENTING the banks from liquidating their assets, etc. Instead, banks were forced to carry bad loans on their books, and hamstrung companies were kept alive despite their pathetic situation, banks had no liquidity left, and the economy just limped along endlessly.

For capitalism to work well, some companies MUST die. Sometimes its necessary. Greenspan referred to it as creative destruction.

Hopefully this is creative destruction, and not just destructive destruction. I can't say I could tell the difference. But in any event, Japan is a bad analogy.

Amnorix
09-14-2008, 09:09 PM
I know this might come as a shock, but I actually worked on Wall Street for a spell. I worked for Citibank, Deutsche Bank, and a brokerage firm.

Let me tell you---

These joints are run by as*holes. I'm not surprised by any of this.

Many successful businesses are run by aholes. What is your point?

Amnorix
09-14-2008, 09:09 PM
Maybe, but a lot of companies in this country and around the world are run by assholes.

I also have experience in the industry (hoped to work on Wall Street after graduation in May......ugh), and there are a ton of good people that work up there that had nothing to do with the problems facing these firms, but are now taking the brunt of it.


I was beaten to it, I see. Bravo.

irishjayhawk
09-14-2008, 09:21 PM
So I honestly want to learn about what this means, why it happened, etc

Where would you (general you) advise I start?

banyon
09-14-2008, 09:23 PM
Is this going to lower the dollar? I have some student loans that I wouldn't mind getting practically smaller.

Personally, this is where I am too, the higher the inflation rate the better

Ultra Peanut
09-14-2008, 09:40 PM
Welp, A.I.G. Seeks $40 Billion in Fed Aid to Survive (http://dealbook.blogs.nytimes.com/2008/09/14/aig-seeks-fed-aid-to-survive/index.html?hp).

I'ma be honest here. I'm SO ****ING GLAD I don't have any money right now.

Amnorix
09-14-2008, 09:43 PM
Wow. I can't see how AIG going bankrupt would be anything but disastrous. But if the Fed gets involved in countless bailouts, that too is the path of disaster. The moral hazard starts getting absurd at that point.

Wow. That's really serious s**t.

'Hamas' Jenkins
09-14-2008, 09:47 PM
It's a good thing I have $30 grand in debt and only $4K in liquid assets.

eazyb81
09-14-2008, 09:47 PM
So I honestly want to learn about what this means, why it happened, etc

Where would you (general you) advise I start?

The Economist, Reuters, and Bloomberg are good places to start if you're just looking for reading material. Feel free to ask a specific question if you're looking for something.

irishjayhawk
09-14-2008, 09:49 PM
The Economist, Reuters, and Bloomberg are good places to start if you're just looking for reading material. Feel free to ask a specific question if you're looking for something.

Well, specifically, what exactly does this mean for the simpleton (in economic sense) like me?

And I mean I get the common sense things like the Feds bailing out a bank with taxpayer dollars will end in disaster. I get that. I just don't get the technical details or how "bad" things are or where things lead.

Ultra Peanut
09-14-2008, 09:51 PM
It's a good thing I have $30 grand in debt and only $4K in liquid assets.The poor shall inherit America after all of the rich people kill themselves.

'Hamas' Jenkins
09-14-2008, 09:52 PM
The Economist, Reuters, and Bloomberg are good places to start if you're just looking for reading material. Feel free to ask a specific question if you're looking for something.

I got a ? for ya.

The wife and I are in the market to buy a house in the next two years. At what point will the market be most ripe for the picking?

Also, what happens if my bank (who holds my car loan) goes under? I assume some other entity just buys up their assets and assumes the debt and I pay to them?

'Hamas' Jenkins
09-14-2008, 09:52 PM
The poor shall inherit America after all of the rich people kill themselves.

Humanities, FTW!!

irishjayhawk
09-14-2008, 09:53 PM
I got a ? for ya.

The wife and I are in the market to buy a house in the next two years. At what point will the market be most ripe for the picking?

Also, what happens if my bank (who holds my car loan) goes under? I assume some other entity just buys up their assets and assumes the debt and I pay to them?

Kinda another specific question I was wondering.

Jenson71
09-14-2008, 09:56 PM
Well, specifically, what exactly does this mean for the simpleton (in economic sense) like me?

And I mean I get the common sense things like the Feds bailing out a bank with taxpayer dollars will end in disaster. I get that. I just don't get the technical details or how "bad" things are or where things lead.

Well, in this case, with Lehman, the Feds aren't bailing out the bank. They're going down. And no bank is taking the risk of buying them out.

eazyb81
09-14-2008, 09:56 PM
Well, specifically, what exactly does this mean for the simpleton (in economic sense) like me?

And I mean I get the common sense things like the Feds bailing out a bank with taxpayer dollars will end in disaster. I get that. I just don't get the technical details or how "bad" things are or where things lead.

At this point, it's hard to say what will happen. I know that's a cop out answer, but this is unprecedented. When three major investment banks go bust in a matter of months, the US govt is forced to bail out Fannie/Freddie and backstop $5 trillion in mortgage backed securities, there are rumors that AIG is in serious trouble, and people STILL are not convinced we've hit the climax of this mess......well, anything truly is possible.

irishjayhawk
09-14-2008, 10:00 PM
Well, in this case, with Lehman, the Feds aren't bailing out the bank. They're going down. And no bank is taking the risk of buying them out.

Yeah, and I can recognize the badness of that. However, I don't understand what happens to people who's money is in those banks. Are they just shit out of luck?

(Yeah, I'm a finance noobie of the highest order.)

eazyb81
09-14-2008, 10:00 PM
I got a ? for ya.

The wife and I are in the market to buy a house in the next two years. At what point will the market be most ripe for the picking?

There haven't been any clear signs yet that the housing market has bottomed, so I wouldn't be in a hurry. Also, loans could be tough to qualify for in the near future.

Also, what happens if my bank (who holds my car loan) goes under? I assume some other entity just buys up their assets and assumes the debt and I pay to them?

Not sure, I don't know much about the lending area. I'd assume the same thing would happen with people that had mortgages through Countrywide. But we also don't want to underestimate how many banks could go under, and then we're back in an area where there's really no precedent in place.

eazyb81
09-14-2008, 10:02 PM
Yeah, and I can recognize the badness of that. However, I don't understand what happens to people who's money is in those banks. Are they just shit out of luck?

(Yeah, I'm a finance noobie of the highest order.)

Bank deposits are FDIC insured up to $100,000, and obviously common stockholders are not insured at all. Of course, if there are massive bank failures, theoretically the FDIC could collapse, and then all bets are off.

irishjayhawk
09-14-2008, 10:03 PM
Bank deposits are FDIC insured up to $100,000, and obviously common stockholders are not insured at all. Of course, if there are massive bank failures, theoretically the FDIC could collapse, and then all bets are off.

I assume we aren't close to the FDIC collapsing. Correct?

Dick Bull
09-14-2008, 10:04 PM
Bank deposits are FDIC insured up to $100,000, and obviously common stockholders are not insured at all. Of course, if there are massive bank failures, theoretically the FDIC could collapse, and then all bets are off.


so right about now is when I ask, as a bank of america account holder, I ain't got nothing to worry about right?

eazyb81
09-14-2008, 10:05 PM
I assume we aren't close to the FDIC collapsing. Correct?

At this moment, that is correct.

Jenson71
09-14-2008, 10:07 PM
Yeah, and I can recognize the badness of that. However, I don't understand what happens to people who's money is in those banks. Are they just shit out of luck?

(Yeah, I'm a finance noobie of the highest order.)

They're insured to some degree, otherwise, as far as I know, yes.

Friendo
09-14-2008, 10:07 PM
so right about now is when I ask, as a bank of america account holder, I ain't got nothing to worry about right?

your first 100g is good.

Amnorix
09-14-2008, 10:17 PM
Loans -- whether the bank that gave you the loan is bought out by another bank or goes into bankrutpcy, you will still be obligated to make the payments. Either the bank that bought the assets (whether in bankruptcy or out of bankruptcy) or the trustee in bankruptcy will have the power to make sure you follow through or else you will be foreclosed upon or have your collateral seized or whatever.

Deposits -- the FDIC insures the first $100,000 per person for any deposits held by a FDIC insured bank. So if you have some joint accounts with your spouse consisting of some money in a checking account, savings account and certificate of deposit, they're all insured up to a maximum of $200,000. Again, it's $100,000 per person.

It's also per person, per bank. So if you had, hypothetically, $500,000 on deposit with 5 different banks, then it's all insured by the FDIC. Hypothetically at least, because if five different banks went belly up and needed FDIC protection, then it's entirely possible the entire system has collapsed and ti's the Great Depression Redux.

irishjayhawk
09-14-2008, 10:37 PM
They're insured to some degree, otherwise, as far as I know, yes.

I knew about the FDIC, I don't know why I didn't say that. But yeah, I mean if everything collapses where exactly does that put us?

Other than not good.

Silock
09-14-2008, 10:41 PM
if everything collapses where exactly does that put us?

Other than not good.

We won't get to that point. This is a global economy.

Cave Johnson
09-14-2008, 11:25 PM
I assume we aren't close to the FDIC collapsing. Correct?

From what I understand, the FDIC is severely undercapitalized. Granted, the source doesn't provided the links, but it's still troubling. It wouldn't take a ton more bank implosions the size of IndyMac to deplete their reserves.

"The FDIC notes that this bailout cost only $862 million dollars,
or 0.30 percent of the $13.4 trillion dollars insured at approximately
8500 insured institutions.

We know the FDIC had net assets of $53 billion before IndyMac, which
according to the FDIC will cost them between $4 billion and $8
billion. Taking the lower estimate and last week?s double-header,
the FDIC?s available assets would have been reduced from $53 billion
to $48 billion."

http://www.24hgold.com/viewcompanyarticle.aspx?langue=en&articleid=293471&ref=FDIC%20Severely%20Undercapitalized%20To%20Handle%20Coming%20Bank%20Failures

Of course, this could be complete BS designed to drive up the price of commodities.

alnorth
09-14-2008, 11:38 PM
The good news is that if you are looking to buy a house in the next year or two, you may get an absolute steal, especially on one of the coasts. (If you were thinking about selling a house, dont unless you absolutely have to)

The bad news is that money is going to be so tight, you will need sparkling credit and a healthy down payment to qualify for a mortgage. The garbage loans are obviously dead, but even borrowers with sortof good credit and small down payments might not get a loan. The banks are spooked and dont have a lot of money to lend, they only want safe bets right now.

I had been thinking about buying my first home next year, but I think I'm going to have to spend the next year socking more money away into my down payment and bumping up my score.

DaneMcCloud
09-15-2008, 12:59 AM
I know most of you probably don't care, but the financial industry is in complete turmoil. A potential deal to acquire Lehman Brothers has fallen through, so it looks like they will file for Chapter 7 and go through with liquidation. No bailout.

http://www.cnbc.com/id/26704405

Also, Bank of America is rumored to be acquiring Merrill Lynch, and a deal could be announced as soon as tonight.

Finally, AIG will announce a major restructuring tomorrow.

The markets are going to be absolutely nuts tomorrow. If anyone's interested, CNBC will have a special on at 7:00pm to discuss the latest news on Lehman, Merrill, BofA, and everything else.

I mentioned 10 weeks ago that Lehman was going down.

http://chiefsplanet.com/BB/showpost.php?p=4845364&postcount=15

***SPRAYER
09-15-2008, 04:25 AM
Is this going to lower the dollar? I have some student loans that I wouldn't mind getting practically smaller.

Me too.

One man's pleasure is anothers man's pain.

tiptap
09-15-2008, 06:46 AM
It is at these times I think about Melville's "The Confidence Man." It is not that Melville didn't have a sense of humor. He had it published on April 1. I mention the book because economies are for the most part a measure of confidence with each other. First within the participating economy and those that compete. So what I see is an unconfidence vote by the world on the direction of the US over the last 8 years. The decisions made by this administration are now on trial and found wanting. So does this mean that the American economy will totally collapse. No. There is too much skill and education for that. But it will retract compared to the rest of the world. We will not be able to consume 20% of the world's resources as 6% of the worlds population when the world views our decisions so poorly. The rest of the world has lost confidence in the direction America had pursued.

It is therefore necessary to tighten the use of resources by the US. A Green revolution is more central economically more than ever. It is too bad Bush spent 1 trillion dollars on borrowed money to support Iraq instead of investing in the infrastructure that meets US needs at home. Bad judgements all around.

Stewie
09-15-2008, 07:04 AM
BTW, where's Stewie?

I'm here. I was too depressed after yesterday's game to do anything Chiefs related.

No surprise on Lehman. I said they'd be the first to fail weeks ago. This is a systemic problem and will continue to be a problem. The Fed (with all their phony baloney lies) finally threw in the towel. Remember last year when the Fed said everything is "contained?" Lies, lies, lies.

The FDIC has about $35 billion in reserves. Not nearly enough to cover the expected number of bank failures. The printing presses will be working overtime if they need more fiat.

It will be interesting to see how all the OTC Derivatives that Lehman was counter-party to affects other institutions. If Lehman fails to perform it could mean HUGE and I mean HUGE losses for others. That market is somewhere in the neighborhood of $20 trillion.

This problem started in the 80s, flourished in the 90s (even with the collapse of Long Term Capital Management), and the games continue today. The banks are the Fed and the banks grease the palms of politicians. The real movers and shakers in this country are not elected, they sit in tall buildings in New York, year after year after year.

Nightfyre
09-15-2008, 07:07 AM
I'm here. I was too depressed after yesterday's game to do anything Chiefs related.

No surprise on Lehman. I said they'd be the first to fail weeks ago. This is a systemic problem and will continue to be a problem. The Fed (with all their phony baloney lies) finally threw in the towel. Remember last year when the Fed said everything is "contained?" Lies, lies, lies.

The FDIC has about $35 billion in reserves. Not nearly enough to cover the expected number of bank failures. The printing presses will be working overtime if they need more fiat.

It will be interesting to see how all the OTC Derivatives that Lehman was counter-party to affects other institutions. If Lehman fails to perform it could mean HUGE and I mean HUGE losses for others. That market is somewhere in the neighborhood of $20 trillion.

This problem started in the 80s, flourished in the 90s (even with the collapse of Long Term Capital Management), and the games continue today. The banks are the Fed and the banks grease the palms of politicians. The real movers and shakers in this country are not elected, they sit in tall buildings in New York.

It is super-irony time: Where we print dollars to stimulate an economy already hindered by a weak dollar.

jettio
09-15-2008, 07:28 AM
All of this was the inevitable result of the deregulation trumpetted by McCain and his boy Phil Gramm.

The banking and securities regulations are there to stop greedy people from ruining capital markets. The GOP argues for deregulation so that greedy people can make a killing and now act surprised that it happened.

Looks like our country gets to learn the same lessons every 2nd generation because our democracy alternates between electing people that care about the common good to fix the problems caused by the election of people who favor greedy individualism no matter the cost to the common good.

eazyb81
09-15-2008, 08:58 AM
All of this was the inevitable result of the deregulation trumpetted by McCain and his boy Phil Gramm.

The banking and securities regulations are there to stop greedy people from ruining capital markets. The GOP argues for deregulation so that greedy people can make a killing and now act surprised that it happened.

Looks like our country gets to learn the same lessons every 2nd generation because our democracy alternates between electing people that care about the common good to fix the problems caused by the election of people who favor greedy individualism no matter the cost to the common good.

Wow, are you seriously going to act like this is a Republican problem? :spock:

People like you just don't get it, because you're too obsessed with placing blame rather than evaluating the issues at hand.

Cave Johnson
09-15-2008, 09:13 AM
I mentioned 10 weeks ago that Lehman was going down.

http://chiefsplanet.com/BB/showpost.php?p=4845364&postcount=15

If you had mentioned it back in April when Bear was bought out, then I'd be impressed.

gblowfish
09-15-2008, 09:38 AM
Stock market in the crapper this AM. Nobody in KC cares because we're all so pissed off about the Chiefs game yesterday!

Nightfyre
09-15-2008, 09:39 AM
If you had mentioned it back in April when Bear was bought out, then I'd be impressed.

There were people who did, just not here.

jAZ
09-15-2008, 09:40 AM
BoA just bought Merrill Lynch

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


At a 70% premium no less.....
The "Too big to fail" party just got even bigger.

:rolleyes:

DaneMcCloud
09-15-2008, 10:02 AM
If you had mentioned it back in April when Bear was bought out, then I'd be impressed.

My daughter was born April 3rd. I was too busy not sleeping and changing diapers.

I'll try to do better next time.

:D

triple
09-15-2008, 10:06 AM
The bad news is that money is going to be so tight, you will need sparkling credit and a healthy down payment to qualify for a mortgage.

That's the way it's supposed to be.

vailpass
09-15-2008, 10:29 AM
Excellent, this is such a buyer's market it isn't even funny.
For all of you sitting on your $$, right now is the time to make a killing the Buffet way.

vailpass
09-15-2008, 10:30 AM
It's a good thing I have $30 grand in debt and only $4K in liquid assets.

:eek:No wonder your political views are what they are.

Garcia Bronco
09-15-2008, 10:39 AM
Wow, are you seriously going to act like this is a Republican problem? :spock:

People like you just don't get it, because you're too obsessed with placing blame rather than evaluating the issues at hand.


He can say that garbage all he wants, but Bill Clinton signed the law in question into effect. Democrats and Republicans passed the GLB. And while McCain may have voted for it, all are to blame.


Congressional history of the Act

The bills comprising the act were introduced in the Senate by Phil Gramm (http://en.wikipedia.org/wiki/Phil_Gramm) (R-TX) and in the House of Representatives by James Leach (http://en.wikipedia.org/wiki/Jim_Leach) (R-IA). The bills were passed along party lines with Republican support in the Senate<SUP class=reference id=cite_ref-0>[1] (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#cite_note-0)</SUP> and with bipartisan support in the House of Representatives<SUP class=reference id=cite_ref-1>[2] (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#cite_note-1)</SUP>. It was signed into law by President Bill Clinton (http://en.wikipedia.org/wiki/Bill_Clinton).
The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.<SUP class=reference id=cite_ref-2>[3] (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#cite_note-2)</SUP>

tiptap
09-15-2008, 12:18 PM
And you wonder why Obama didn't choose Clinton for his running mate?

Chief Henry
09-15-2008, 12:27 PM
:eek:No wonder your political views are what they are.

I thought the same thing, but didn't want to say it. I'm glad you did.

DaneMcCloud
09-15-2008, 12:29 PM
:eek:No wonder your political views are what they are.

Are you implying that only poor people are Democrats?

'Hamas' Jenkins
09-15-2008, 12:36 PM
I thought the same thing, but didn't want to say it. I'm glad you did.

Student loans, dumbass.

Chief Henry
09-15-2008, 12:39 PM
Student loans, dumbass.

Testy aren't we. Instead of spending so much time on thie BB, why don't you get a 2nd job and pay your debt off - that way you'll be able to save
and invest more. It will put you in a much better mood.

'Hamas' Jenkins
09-15-2008, 12:43 PM
Testy aren't we. Instead of spending so much time on thie BB, why don't you get a 2nd job and pay your debt off - that way you'll be able to save
and invest more. It will put you in a much better mood.

Because I'm not worried about my financial situation. The loan payments + Car payments are less than 500 a month, and that's paying more than the minimum. I live perfectly comfortably and want for nothing.

DaneMcCloud
09-15-2008, 12:44 PM
Testy aren't we. Instead of spending so much time on thie BB, why don't you get a 2nd job and pay your debt off - that way you'll be able to save
and invest more. It will put you in a much better mood.

Are you implying that all college students should have their student loans paid off by age 25?

Stinger
09-15-2008, 12:47 PM
Are you implying that only poor people are Democrats?

Yes but you have to put the word judgment after the word poor in your sentence.

:D

Chief Henry
09-15-2008, 12:53 PM
Are you implying that all college students should have their student loans paid off by age 25?

I'm emplying to any one to work as much as you can to get your bills paid for.
Its a great feeling.

HJ, Just think if you got a 2nd job, you could pay $1,000 to $1,500 per month and then have no debt in 2 years or LESS. Just think, you could actually fully fund a ROTH IRA in 2 years and be well on your way to financial freedom. That or jack up your liquid savings to a total to where you could put a big chunk down on your first home when you buy. Its getting to be a great time to be a home buyer. You could be building equity instead of paying rent. Its just a thought. Spend less time on here bitching about everything and start working more. It will impower you like you can't beleave. Try it for 6 months and see how it works for you.

'Hamas' Jenkins
09-15-2008, 12:58 PM
I'm emplying to any one to work as much as you can to get yur bills paid for.
Its a great feeling.

HJ, Just think if you got a 2nd job, you could pay $1,000 to $1,500 per month and then have no debt in 2 years or LESS. Just think, you could actually fully fund a ROTH IRA in 2 years and be well on your way to financial freedom. That or jack up your liquid savings to a total to where you could put a big chunk down on your first home when you buy. Its getting to be a great time to be a home buyer. You could be building equity instead of paying rent. Its just a thought. Spend less time on here bitching about everything and start working more. It will impower you like you can't beleave. Try it for 6 months and see how it works for you.

Or I could continue to study for the GRE, GRE Lit (the entire Western canon is fair game) go to conferences, teach, write seminar papers, and grade papers for 20 hours a week.

Chief Henry
09-15-2008, 01:02 PM
Or I could continue to study for the GRE, GRE Lit (the entire Western canon is fair game) go to conferences, teach, write seminar papers, and grade papers for 20 hours a week.

I've known many school teachers to get a 2nd job, clerking at conveniance stores or stacking shelf's at Walmart or a grocery store while teaching. Its up to you. Keep bitching on an internet board, or get a 2nd job and put that money into your debt and your financial freedom. Its your choice.

'Hamas' Jenkins
09-15-2008, 01:06 PM
I've known many school teachers to get a 2nd job, clerking at conveniance stores or stacking shelf's at Walmart or a grocery store while teaching. Its up to you. Keep bitching on an internet board, or get a 2nd job and put that money into your debt and your financial freedom. Its your choice.

Yeah, I'd rather have a wife who I actually spend time with as opposed to working behind a bulletproof glass divider for 7 bucks an hour, thank you very much.

I'll tell you what I told a dude when I was working retail in college: "I don't care whether or not the store hits its profit goals because I'm not motivated by financial gain."

'Hamas' Jenkins
09-15-2008, 01:08 PM
By the way, this is a pointless ****ing hijack. If you want to continue your advice, Suze Orman, just send me a PM.

Brock
09-15-2008, 01:10 PM
I'm emplying to any one to work as much as you can to get your bills paid for.
Its a great feeling.

I suggest you take remedial english before attempting to tell anyone else how to run their lives.

Chief Henry
09-15-2008, 01:13 PM
Yeah, I'd rather have a wife who I actually spend time with as opposed to working behind a bulletproof glass divider for 7 bucks an hour, thank you very much.

I'll tell you what I told a dude when I was working retail in college: "I don't care whether or not the store hits its profit goals because I'm not motivated by financial gain."

That tells us alot :rolleyes:

It looks like to me you could be spending your time much more useful instead
bitching on an internet board. Just think how much time you could be spending with your wife instead of grading papers.

Chief Henry
09-15-2008, 01:14 PM
I suggest you take remedial english before attempting to tell anyone else how to run their lives.

Giving some young man some older brother advice trumps your remedial english anyday.

Fat Elvis
09-15-2008, 01:17 PM
I've known many school teachers

Fat chance.

Silock
09-15-2008, 01:28 PM
He can say that garbage all he wants, but Bill Clinton signed the law in question into effect. Democrats and Republicans passed the GLB. And while McCain may have voted for it, all are to blame.


Congressional history of the Act

The bills comprising the act were introduced in the Senate by Phil Gramm (http://en.wikipedia.org/wiki/Phil_Gramm) (R-TX) and in the House of Representatives by James Leach (http://en.wikipedia.org/wiki/Jim_Leach) (R-IA). The bills were passed along party lines with Republican support in the Senate<SUP class=reference id=cite_ref-0>[1] (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#cite_note-0)</SUP> and with bipartisan support in the House of Representatives<SUP class=reference id=cite_ref-1>[2] (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#cite_note-1)</SUP>. It was signed into law by President Bill Clinton (http://en.wikipedia.org/wiki/Bill_Clinton).
The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.<SUP class=reference id=cite_ref-2>[3] (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#cite_note-2)</SUP>

Rep.

Silock
09-15-2008, 01:29 PM
Are you implying that all college students should have their student loans paid off by age 25?

I have my student loans all paid off.

Oh wait... I never had any. Grants and scholarships FTW! :)

banyon
09-15-2008, 01:36 PM
I'm emplying to any one to work as much as you can to get your bills paid for.
Its a great feeling.

HJ, Just think if you got a 2nd job, you could pay $1,000 to $1,500 per month and then have no debt in 2 years or LESS. Just think, you could actually fully fund a ROTH IRA in 2 years and be well on your way to financial freedom. That or jack up your liquid savings to a total to where you could put a big chunk down on your first home when you buy. Its getting to be a great time to be a home buyer. You could be building equity instead of paying rent. Its just a thought. Spend less time on here bitching about everything and start working more. It will impower you like you can't beleave. Try it for 6 months and see how it works for you.

Personally, I'd like to do that, but there's an office policy against it.

Jenson71
09-15-2008, 01:42 PM
That tells us alot :rolleyes:

It looks like to me you could be spending your time much more useful instead
bitching on an internet board. Just think how much time you could be spending with your wife instead of grading papers.

Couldn't we all be doing something more useful than posting on an internet board?

Chief Henry
09-15-2008, 01:50 PM
Couldn't we all be doing something more useful than posting on an internet board?

No Doubt...but I'm not $30,000 in Debt with LESS THAN $4,000 in LIQUID savings :rolleyes:

Silock
09-15-2008, 02:03 PM
Couldn't we all be doing something more useful than posting on an internet board?

Not me. The internet is serious business.

http://i247.photobucket.com/albums/gg121/Silock99/4455normal_Internet-SeriousBusiness.jpg

'Hamas' Jenkins
09-15-2008, 02:15 PM
No Doubt...but I'm not $30,000 in Debt with LESS THAN $4,000 in LIQUID savings :rolleyes:

Good Lord, D-bag:

25K in Student loans @ 4%
5K in Car @ 6%

It's not like it's credit card debt with a 29% APR.

Stinger
09-15-2008, 02:15 PM
No Doubt...but I'm not $30,000 in Debt with LESS THAN $4,000 in LIQUID savings :rolleyes:

I am the last one to defend Hamas but please.... I guess those who just got out of Med school should start looking at working at 7-11 on their day off from residency????

When your young you are investing in your future that has some up expense.

This is almost as absurd as one political party blaming the other for this fisaco. Both are to blame and us tax payers will yet bare the burden.

Chief Henry
09-15-2008, 02:29 PM
[QUOTE=Stinger;5022150]

When your young you are investing in your future that has some up expense.

QUOTE]

You'll get no argument from me about investing in your education. Its a great place to put money if its followed up by action and LOTS of hard work.

Calcountry
09-15-2008, 02:40 PM
Now these financial companies all "expect" to all be bailed out. It's so unfair to these high net worth investors! Have your taxpayers pay us!
Strangely, there is an odd sense of agreement with this.

Ultra Peanut
09-15-2008, 03:29 PM
This is almost as absurd as one political party blaming the other for this fisaco. Both are to blame and us tax payers will yet bare the burden.This is pretty much the Reaganites' "out." They **** shit up monumentally, and then say, "See, government doesn't work!" to absolve themselves.

jettio
09-15-2008, 03:58 PM
He can say that garbage all he wants, but Bill Clinton signed the law in question into effect. Democrats and Republicans passed the GLB. And while McCain may have voted for it, all are to blame.


Congressional history of the Act

The bills comprising the act were introduced in the Senate by Phil Gramm (http://en.wikipedia.org/wiki/Phil_Gramm) (R-TX) and in the House of Representatives by James Leach (http://en.wikipedia.org/wiki/Jim_Leach) (R-IA). The bills were passed along party lines with Republican support in the Senate<SUP class=reference id=cite_ref-0>[1] (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#cite_note-0)</SUP> and with bipartisan support in the House of Representatives<SUP class=reference id=cite_ref-1>[2] (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#cite_note-1)</SUP>. It was signed into law by President Bill Clinton (http://en.wikipedia.org/wiki/Bill_Clinton).
The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.<SUP class=reference id=cite_ref-2>[3] (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#cite_note-2)</SUP>

And this contradicts anything in my post?

Do you mind pointing out how this bit of information you posted contradicts anything in my post?

DaneMcCloud
09-15-2008, 04:05 PM
No Doubt...but I'm not $30,000 in Debt with LESS THAN $4,000 in LIQUID savings :rolleyes:

I'm assuming that you're not 25.

Are you?