tagged w/ Wall Street
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Okay our tax money well spent on more corporate welfare, that's like a 2 months in Iraq we just payed for.Okay our tax money well spent on more corporate welfare, that's like a 2 months... more
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House Speaker Nancy Pelosi has ordered a broad, swift investigation of Wall Street and will demand testimony from Bush administration officials and captains of finance, congressional officials said.
House Democrats plan to aggressively look at the administration’s role in the meltdown over the weekend and to explore further regulation and government structures that would be taken up under the new president.
Republican aides accused Democrats of trying to shift blame with a series of “show trials,” but acknowledged that key officials will wind up cooperating.
The hearings will take place...
(Read Rest at Link...)House Speaker Nancy Pelosi has ordered a broad, swift investigation of Wall Street and... more
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(Video) McCain talks about what he would do with the economy he doesn't understand and Obama shows he is the only one that can bring this economy back.
I'm becoming more and more ashamed I voted for him in 2000.(Video) McCain talks about what he would do with the economy he doesn't... more
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The U.S. government stepped in Tuesday to rescue American International Group Inc., one of the world's largest insurers, with an $85 billion injection of taxpayer money.The U.S. government stepped in Tuesday to rescue American International Group Inc.,... more
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Barclays PLC, the third-largest British bank, took advantage of Lehman Brothers Holdings Inc.'s bankruptcy reorganization Tuesday to reach a deal for Lehman's North American investment banking and trading operations for just $250 million.Barclays PLC, the third-largest British bank, took advantage of Lehman Brothers... more
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Barack Obama took the fiercest swipe yet at John McCain's economic positions here Tuesday in light of turmoil on Wall Street, portraying the Arizona senator as blithely ignorant and willing to continue on with Bush administration policies.
The Democratic presidential nominee slightly departed from his typical stump speech here to promote his economic plan and bash McCain for saying in March that he believed in less regulation on Wall Street.
The speech comes amid continued upheaval in world financial markets that has brought three of the five largest U.S. investment banks to their knees, and is requiring tens of billions of dollars in federal government bailouts.
"We are in the most serious financial crisis in generations. Yet Sen. McCain stood up yesterday and said that the fundamentals of the economy are strong," Obama told a crowd of 2,184 at the Colorado School of Mines. "A few hours later, his campaign sent him back out to clean up his remarks ... But we know that Senator McCain meant what he said the first time."
McCain, who appeared on MSNBC this morning, said his first priority is addressing the "alphabet soup of regulatory agencies," which he said were designed for the 1930s.
"Now we have an instantaneous financial system that's global in nature and it's not compartmentalized," he said. "Look at the Stock Exchange today as to what it was even 20 or 30 years ago. So you've got to fix that and also, very frankly, people were asleep at the switch."
Obama slammed McCain for being "fundamentally a deregulator," citing remarks McCain made in March that he believes in less regulation in the financial markets. He called McCain's decision to form a commission to study the economy "the oldest Washington stunt in the book."
"Here's the thing - this isn't 9/11," Obama told a boisterous standing crowd in a gymnasium. "We know how we got into this mess. What we need now is leadership that gets us out."
He got another ovation when he said he wouldn't allow lobbyists' interests to penetrate the White House.
"I am the only candidate who can say that Washington lobbyists do not fund my campaign, they will not run my White House, and they will not drown out the voices of the American people when I am President of the United States," he said. "That's how we're going to end the outrage of special interests tipping the scales."
Lakewood resident Penny Roach introduced Obama.
Roach was laid off from Merrill Lynch a few years ago, and struggles to pay medical bills even though she has skeletal health insurance.
She said Colorado needed to "turn blue" in November.
"Barack Obama is the only candidate ... who is a leader who isn't afraid to take on the special interests," she said.
Obama, who has spent the last day and a half in small Colorado towns, heads to Los Angeles tonight and Elko, Nev., tomorrow for another rally.
In addition to hitting his financial plan hard, he's peddled a message to Western voters emphasizing the need for clean energy, better paying jobs and tax cuts for the middle class.
Yesterday, he told a crowd in Grand Junction that Colorado and Gov. Bill Ritter understand clean energy and that if he wins in November, he'd invest $150 billion in 10 years to invest in renewable sources of energy and clean cars.
In Golden today, hundreds of overflow supporters who didn't get tickets into the event waved and screamed at the motorcade as it arrived a few minutes late to the engineering school.
Obama, who stayed at the Hyatt Regency Hotel in downtown Denver last night, stopped and waved at people lining the sidewalk on the corner of 15th and Welton Streets before heading to Jefferson County.
(Denver Post)Barack Obama took the fiercest swipe yet at John McCain's economic positions here... more
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Moopak
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Events are forcing the McCain camp to do something they ’ve been avoiding for weeks, that is, talk about the issues. I don’t think we’re going to be hearing much about lipstick in the near term. I see no better evidence of McCain’s complete lack of grasp of how the economy works than his call for ending “greed, corruption and fraud” on Wall Street. Events are forcing the McCain camp to do something they ’ve been avoiding for... more
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Wall Street's Monday lurch has wiped Alaska Gov. Sarah Palin off the front pages. That's probably a good thing for Palin as her former press secretary made the loony claim that "Obama operatives" have "hijacked" for political purposes the Alaska investigation into the firing of her public safety commissioner.
From CNN.com:
Former Palin Press Secretary Meg Stapleton told reporters in Anchorage that the power probe has been 'hijacked' by 'Obama operatives' for the Democratic presidential nominee—namely, Alaska state Sen. Hollis French, the Democratic lawmaker managing the investigation and an Obama supporter. French has denied working on behalf of the Obama campaign.
Rarely in the annals of American political history have claims so far-fetched been made by a high-level aide, whether present or former. Remember, dear readers, the Palin investigation was launched well before Palin was on the McCain team, and at a time when her name as a vice presidential prospect was barely being mentioned.
Meanwhile, the two presidential candidates (and surrogates) made the rounds of the morning TV talk shows, describing their plans to revive the economy. McCain proposes (as reported by CNN where he appeared):
* Appointing a high level commission to study the economic crisis.
* No government bailout of insurance giant AIG.
* And he blames the "old boy network" and Washington corruption for today's economic woes.
A commission to study the problem? Well, that means it should make some widely ignored recommendations just in time for, say, the 2012 election? On to Obama. His prescription for righting the economy includes:
* Increased regulation of investment houses and banks.
* Streamline overlapping regulatory agencies.
* Blaming the Bush administration for today's economic crisis.
Good idea to reintroduce some regulation into the U.S. economic system. After all, Wall Street's woes are because of the mortgage crisis. The mortgage crisis was created by unregulated mortgage mania, in which home loans were granted to people without providing financial records showing they could afford the home loan for which they were applying. Yes, it created the last "housing boom." But that was a false boom, because it was based on Americans being able to afford the steep rise in housing prices it created. And now we're paying through this housing bust.
As to other parts of the Obama prescription? They don't send me. I'd like a second opinion.
Wall Street's Monday lurch has wiped Alaska Gov. Sarah Palin off the front... more
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BuddyP
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Dow drops more than 500 points or 4.5 % as investors panic after Lehman Brothers files for chapter 11.
US stocks were slammed on Monday after a stunning upheaval on the Wall Street landscape. The Dow Jones fell more than 504 points or 4.42 percent, the largest one-day drop since September 2001. This as investors reacted badly to a shake-up of the financial industry that took out two storied names: Lehman Brothers Holdings Inc. and Merrill Lynch & Co. Lehman Brothers, which had 60 billion US dollars in soured real-estate holdings, filed a Chapter 11 bankruptcy petition in court after attempts to rescue the 158-year-old firm failed. Employees started to clean out their offices in New York on Sunday night. About 26000 Lehman Brothers employees lost their jobs worldwide. Another Wall St. icon Merrill Lynch was snapped up by Bank of America in a 50 billion dollar all-stock transaction in what was essentially a forced sale. Merrill Lynch was said to have 80-plus billion dollars of risky asset exposures. The disappearance of the two firms could mean the loss of up to 50,000 jobs in the financial sector. That industry has already lost 100,000 jobs since the start of the credit crisis a little more than a year ago.
Doug Henwood is the founder and editor of the Left Business Observer.Dow drops more than 500 points or 4.5 % as investors panic after Lehman Brothers files... more
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WASHINGTON – With turbulence hitting financial markets as a global credit crisis claims heavyweight victims, suddenly the possibility of a reduction in interest rates by the Federal Reserve is back on the agenda.
Economists were split on whether the central bank would actually cut a key rate when officials meet Tuesday, but it was widely agreed that the Fed will at least open the door to reducing rates in the weeks ahead if financial markets do not stabilize.
Wall Street had a very tough day Monday, with the Dow Jones industrial average tumbling by 504 points in the steepest slide since the September 2001 terrorist attacks.
"Given the meltdown in markets, a rate cut is becoming fairly possible," David Wyss, chief economist at Standard & Poor's in New York, said in a comment echoed by other economists.
That represents a significant change from just a few days ago when the widely accepted view was that the Fed was finished cutting interest rates and the next move would be to start raising rates, but probably not until next year.
However, the stunning developments of the past two days as the 14-month credit crisis claimed its biggest victim yet have led economists to rethink their views. Lehman Brothers filed for bankruptcy protection on Monday after marathon talks over the weekend failed to produce a willing buyer for the nation's fourth largest investment bank.
No white knight would step forward after Treasury Secretary Henry Paulson held firm to the position that the federal government would not step in and supply any money to help facilitate a sale, unlike what was done six months ago when the Federal Reserve put up a $29 billion loan with Paulson's backing to support the sale of another investment bank, Bear Stearns, to JP Morgan Chase.
Briefing reporters at the White House, Paulson insisted that the administration had made the right decision.
"I never once considered that it was appropriate to put taxpayer money on the line in resolving Lehman Brothers," Paulson said Monday.
The Fed did announce on Sunday that it was expanding its efforts to supply more cash to the financial system as a way of helping other financial firms that might be facing problems in the wake of the Lehman bankruptcy filing.
However, many economists believe the effort will end up not being enough to calm markets. For that reason, they say the chances of a Fed rate cut — most likely occurring between meetings — has risen. Another factor that might influence the Fed is the recent jump in unemployment, which surged in August to a five-year high of 6.1 percent as companies shed another 85,000 jobs.
"Looking back to the '70s, over the last five recessions, the Fed has pretty much slashed interest rates until the unemployment rate has peaked each time," said Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi.
David Jones, an economist at DMJ Advisors, said he believes the Fed will signal that it is now more inclined to cut rates than to raise them but will stop short of actually cutting rates.
"I believe they will say that the financial crisis has greatly increased the downside risks to growth and those risks now far outweigh the risks of inflation," he said.
The central bank has gotten some good news on inflation recently with the sharp fall in oil prices with crude closing below $100 per barrel on Monday for the first time in six months.
That big decline in energy prices helped trigger the largest drop in wholesale prices in nearly two years in August and economists believe that a report to be released Tuesday will also show that consumer prices dropped in August.
The Fed started a year ago with an aggressive effort to cut interest rates, pushing the federal funds rate down from 5.25 percent to 2 percent, where it has been since the Fed's last rate cut in April.
Collapse ArticWASHINGTON – With turbulence hitting financial markets as a global credit crisis... more
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Sept. 15 (Bloomberg) -- The Federal Reserve added $70 billion in reserves to the banking system, the most since the September 2001 terrorist attacks, to reverse a surge in borrowing costs sparked by the collapse of Lehman Brothers Holdings Inc.
Fed funds traded as high as 6 percent, or 4 percentage points above the central bank's target rate for overnight loans between banks, according to ICAP Plc, the world's largest inter- dealer broker. The margin was the greatest since Bloomberg began tracking the data in 1998. The rate dropped to as low as 0.5 percent after the Fed added the temporary reserves.
The central bank uses repurchase agreements, or repos, to buy or sell Treasury, mortgage-backed and so-called agency debt for a set period, to help maintain enough money in the system to keep overnight interest rates close to the target. They don't signal a policy shift. Futures show traders boosted odds to 68 percent that the Fed will cut rates when policy makers meet tomorrow to offset financial market turmoil.
Demand for short-term funds ``dramatically increased,'' said Michael Darda, chief economist for MKM Partners LLC in Greenwich, Connecticut. ``If the Fed puts enough liquidity in the system, the funds rate will come down. It may actually trade below target for a while.''
The so-called effective funds rate was 2.1 percent on Sept. 12, or 10 basis points over the target rate. The Federal Reserve Bank of New York reports daily, for the previous trading session, the effective funds rate. It is a weighted average rate of unsecured overnight lending transactions. A basis point is 0.01 percentage point.
Expanding Collateral Options
The Fed widened the collateral it accepts yesterday for loans to securities firms in an effort to help Wall Street weather Lehman's bankruptcy.
The Fed added $50 billion in temporary reserves to the banking system when it arranged overnight repurchase agreements, or repos, at 11:50 a.m., after providing $20 billion earlier.
``It is rare that overnight operations exceed $15 billion,'' Tony Crescenzi, chief bond market strategist for New York-based Miller Tabak & Co., wrote in a note to clients. ``There is a longstanding pattern in which the funds rate falls in the afternoon, as banks scramble to unload their excess monies onto other banks, lest they get stuck with excesses earning nothing.''
SOMA Lending
When the Fed added the reserves at 9:40 a.m., federal funds, the overnight lending rate between U.S. banks, traded at 4.25 percent, above the central bank's target rate, according to ICAP. The rate was at 6 percent at the time of the second open market operation. Fed funds opened at 3.5 percent today.
A total of $5 billion in repos matures today. Wrightson, an ICAP research unit specializing in U.S. government finance, had expected the Fed to add about $15 billion in repos. Dealers submitted $270.1 billion in bids for the repurchase agreements.
Fed funds' weighted average was 2.1 percent on Sept. 12 after trading between 1.75 percent and 2.9375 percent, according to the central bank.
The Fed also accepted $25.8 billion in collateral as part of its daily System Open Market Account, or SOMA, securities lending program, the largest amount this year, according to Fed data tracked by Stone & McCarthy Research. Dealers submitted $29.8 billion in bids.
The Fed offers specific Treasury securities held by SOMA for loan to dealers against Treasury general collateral on an overnight basis. Dealers bid in a multiple-price auction held every day at noon. The securities lending program is separate from the Fed's Term Securities Lending Facility, or TSLF, one of the three liquidity measures the Fed initiated since the credit crisis ensued last year.
The TSLF offers Treasury general collateral held by SOMA for maturities longer than overnight in a single-price auctions with dealers who program-eligible collateral.
Sept. 15 (Bloomberg) -- The Federal Reserve added $70 billion in reserves to the... more
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When Treasury Secretary Henry M. Paulson Jr. flew to New York Friday evening, he brought only one change of clothes. And he planned to send a simple message to the powerbrokers of the financial world: No government bailouts would be offered to Wall Street.
When Treasury Secretary Henry M. Paulson Jr. flew to New York Friday evening, he... more
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U.S. stocks headed for a mixed open Tuesday, a day after Wall Street's worst day in years, as nervous investors awaited a decision from the Federal Reserve on interest rates.U.S. stocks headed for a mixed open Tuesday, a day after Wall Street's worst day... more
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Asian stock markets tumbled Tuesday as the collapse of Lehman Brothers and takeover of Merrill Lynch spurred fears of a global financial crisis. European markets, which fell sharply Monday, extended losses in early trading.Asian stock markets tumbled Tuesday as the collapse of Lehman Brothers and takeover of... more
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HONG KONG (Reuters) - American International Group Inc, thrown a $20 billion lifeline by New York state officials, came under fresh pressure for survival on Tuesday as ratings agencies downgraded the insurer's debt and the global financial sector meltdown spread.
Asian markets, many of them closed for a holiday on Monday, tumbled as investors absorbed the weekend's dramatic events on Wall Street, where Lehman Brothers filed for bankruptcy protection and rival Merrill Lynch agreed to be sold to Bank of America for $50 billion.
Shares in AIG plunged nearly 61 percent on Monday and the U.S. Federal Reserve hired investment bank Morgan Stanley to review options for what was once the world's biggest insurer -- which has lost 92 percent of its value this year -- a person familiar with the situation said on Monday.
British bank Barclays Plc, which over the weekend pulled out of rescue talks for Lehman, was reported by the Wall Street Journal to be in talks to buy large portions of Lehman.
"We do not comment on market rumors," said Angie Tang, a Barclays spokeswoman in Hong Kong.
AIG's ratings downgrade could force it to post more collateral and nullify insurance contracts, possibly setting in motion a chain reaction that could threaten its survival.
"While regulators allowed it to tap its subsidiaries for cash, this will not suffice beyond the short term, and its troubles risk losses for its counterparties," Dariusz Kowalczyk, chief investment strategist at CFC Seymour in Hong Kong, wrote in a research note.HONG KONG (Reuters) - American International Group Inc, thrown a $20 billion lifeline... more
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ivxx
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WASHINGTON — The crisis on Wall Street will leave the next president facing tough choices about how best to regulate the financial system, and although neither Senator Barack Obama nor Senator John McCain has yet offered a detailed plan, their records and the principles they have set out so far suggest they could come at the issue in very different ways.
On the campaign trail on Monday, Mr. McCain, the Republican presidential nominee, struck a populist tone. Speaking in Florida, he said that the economy’s underlying fundamentals remained strong but were being threatened “because of the greed by some based in Wall Street and we have got to fix it.”
But his record on the issue, and the views of those he has always cited as his most influential advisers, suggest that he has never departed in any major way from his party’s embrace of deregulation and relying more on market forces than on the government to exert discipline.
While Mr. McCain has cited the need for additional oversight when it comes to specific situations, like the mortgage problems behind the current shocks on Wall Street, he has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms.
He has often taken his lead on financial issues from two outspoken advocates of free market approaches, former Senator Phil Gramm and Alan Greenspan, the former Federal Reserve chairman. Individuals associated with Merrill Lynch, which sold itself to Bank of America in the market upheaval of the past weekend, have given his presidential campaign nearly $300,000, making them Mr. McCain’s largest contributor, collectively.
Mr. Obama sought Monday to attribute the financial upheaval to lax regulation during the Bush years, and in turn to link Mr. McCain to that approach.
“I certainly don’t fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to,” Mr. Obama told several hundred people who gathered for an outdoor rally in Grand Junction, Colo.
Mr. Obama set out his general approach to financial regulation in March, calling for regulating investment banks, mortgage brokers and hedge funds much as commercial banks are. And he would streamline the overlapping regulatory agencies and create a commission to monitor threats to the financial system and report to the White House and Congress.
On Wall Street’s Republican-friendly turf, Mr. Obama has outraised Mr. McCain. He has received $9.9 million from individuals associated with the securities and investment industry, $3 million more than Mr. McCain, according to the Center for Responsive Politics, a watchdog group. His advisers include Wall Street heavyweights, including Robert E. Rubin, the former treasury secretary who is now a senior adviser at Citigroup, another firm being buffeted by the financial crisis.
Story continued at link...WASHINGTON — The crisis on Wall Street will leave the next president facing... more
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TOKYO (AP) -- The steep decline in U.S. stocks sent Asian stock markets tumbling sharply Tuesday as investors were rattled by concerns over an expanding global financial crisis.
Japan's benchmark Nikkei 225 stock index fell 4.8 percent to 11,632.99, falling under than 12,000-point level for the first time since mid-March.
South Korea's Kospi shed 6.2 percent, and Taiwan's benchmark was off 4.6 percent. The battering in Australia and New Zealand wasn't quite as severe, with key indices down 2.4 percent and 2.7 percent respectively.
The early bloodletting in Asia followed a bleak Monday for world stock markets, which were hard hit after a double-fisted blow from Wall Street - news that Lehman Brothers had filed for bankruptcy and Merrill Lynch would be sold to Bank of America.
The Dow Jones industrial average fell more than 500 points in its largest point drop since after the September 11, 2001, terror attacks.
In Europe, the FTSE-100 share index closed down 3.9 percent in London, the Paris CAC-40 slipped 3.7 percent and Germany's DAX 30 index of blue chips sagged 2.7 percent.
Asia's biggest stock exchanges in Japan, Hong Kong and South Korea were closed Monday for national holidays.
In Tokyo, Kyodo news agency reported that the Japanese unit of Lehman Brothers Holdings Inc. has requested bankruptcy protection at a Tokyo court after the 158-year-old firm filed for Chapter 11 bankruptcy in New York on Monday.
The company, crippled by $60 billion in soured real-estate holdings, was unable to find an investment partner to throw it a lifeline despite a flurry of last-minute negotiations over the weekend.
Share prices in Tokyo fell across the board, with banking issues taking a particularly hard hit in the wake of Lehman's collapse. Investors unloaded shares in major Japanese banks listed as some of the biggest lenders, including Aozora Bank, Mizuho Financial Group and Shinsei Bank.
Japan's central bank issued a statement Tuesday that it will carefully watch the development and take appropriate measures to stabilize the market.TOKYO (AP) -- The steep decline in U.S. stocks sent Asian stock markets tumbling... more
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ivxx
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NEW YORK (AP) -- The upheaval in the American financial system sent shock waves through the stock market Monday, producing the worst day on Wall Street in seven years as investors digested the failure of one of its most venerable banks and wondered which domino would be next to fall.
The Dow Jones industrial average lost more than 500 points, more than 4 percent, its steepest point drop since the day the stock market reopened after the Sept. 11, 2001, attacks. About $700 billion evaporated from retirement plans, government pension funds and other investment portfolios.
The carnage capped a tumultuous 24 hours that redrew U.S. finance. Lehman Brothers, an investment bank that predates the Civil War and weathered the Great Depression, filed the largest bankruptcy in American history. A second storied bank, Merrill Lynch, fled into the arms of Bank of America.
It was by far the most stomach-churning single day since a financial crisis began to bubble up from billions of dollars in rotten mortgage loans that have crippled the balance sheets of one bank after another and landed mortgage giants Fannie Mae and Freddie Mac under the control of the federal government.
"We are in the middle of a deep, dark recession, and it won't end soon. Here it is, and it is pretty nasty," said Barry Ritholtz, who writes the popular financial blog The Big Picture and is CEO of research firm FusionIQ.
And the fallout was far from over. American International Group, the world's largest insurer, was fighting for its very survival: New York Gov. David Paterson moved to allow the company to tap one of its subsidiaries for an emergency loan to stay above water.NEW YORK (AP) -- The upheaval in the American financial system sent shock waves... more
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