quote:

Originally posted by diskodave Lehman Brothers is next in line...

As I said in March...

Lehman goes bankrupt
By MarketWatch
Last update: 1:00 a.m. EDT Sept. 15, 2008Comments: 597

SAN FRANCISCO (MarketWatch) -- Lehman Brothers Holdings Inc. said early Monday that it will file for Chapter 11 bankruptcy protection and reorganization.

The announcement came after a frantic weekend of negotiations in which potential acquirers backed away from a deal and federal officials balked at committing taxpayer funds to help save the Wall Street giant. Last-minute talks with Barclays PLC and Bank of America faltered Sunday, leaving few options left for the 158-year-old firm. See related story

The failure of one of Wall Street's oldest firms came as the fallout from the U.S. housing collapse and global credit crunch intensified more than a year after problems first surfaced. The International Swaps and Derivatives Association organized a special trading session to reduce financial risk in the event of a bankruptcy filing Sunday. See related story.

Federal officials have been struggling to organize an acquisition or private-sector bailout of Lehman because of fears a bankruptcy could cause severe problems in the already fragile financial markets.

But they are anxious not to commit any more taxpayer dollars given the massive bailout of mortgage giants Fannie Mae and Freddie Mac last month and the guarantees offered to facilitate the rescue of Bear Stearns last spring. See related First Take commentary

Even as Lehman's rescue efforts faltered, Merrill Lynch and Bank of America had reportedly entered merger talks. See Wall Street Journal story

Insurance giant AIG is set to announce major restructuring plans on Monday as well. See related story

And Wall Street analysts remain concerned that mortgage lender Washington Mutual, which saw its shares plunge last week, could also be at risk.

Lehman's roots
From its start as a cotton trading firm in Montgomery, Ala. more than 150 years ago, Lehman grew into the third-largest U.S. brokerage firm behind Morgan Stanley and Goldman Sachs. It was a fixed-income powerhouse and the largest mortgage underwriter.
The firm's mortgage business, while hugely profitable during the recent housing boom, proved its undoing as home prices slumped, foreclosures surged and the commercial real estate market began to crack.

In its latest quarter, Lehman reported a net loss of almost $4 billion after more than $5 billion of new write-downs, mostly on soured mortgage exposures. Read full story.

The firm unveiled plans to sell businesses and jettison at least $25 billion of troubled commercial real estate assets, but investors and trading partners continued to desert the firm, leaving it rushing to find buyers for the whole company. See full story.

Lehman had survived near-death experiences before and long-time Chief Executive Richard Fuld had always rejected selling the firm. However, the current credit crunch is the worst crisis to hit Wall Street in more than two decades, according to one former Lehman executive.

"No one, currently working on Wall Street, has ever experienced a credit event like the one we are currently facing," Bernstein Research analyst Brad Hintz, a former Lehman chief financial officer, wrote in a note to investors earlier this month. "The credit events the market has lived through since 1980 ... appear like ripples in a pond compared to the plunge we are currently experiencing."

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"Ibiza will be Earth’s final refuge after Armageddon" -Nostradamus

The title of this thread should be changed from recession to depression as I stated very early in this thread. Especially now.

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quote:

Originally posted by bas Dual exhaust tips on dual exhaust = QUAD EXHAUST = 300 gain in horsepower. Duh

quote:

Originally posted by bas Undies with a dickhole aren't good for guys. Your balls can get caught in them. That's why I prefer to go over the gate instead of through the fence.

quote:

Originally posted by stefanoc i was just going to mention the risk of etrade but just realized theyre FDIC insured (i guess every public company is FDIC insured). does anyone know how FDIC really works? do they really give your money back right away or do they first try to liquidate a company and then try to pay off liabilities in that way?

I wonder which bank is next in line to fail. If it's WAMU, we're all in deep do-do.

Full Time Employees: 43,198
Assets: $309 Billion
Liabilities: $283 Billion
Current Market cap: $4.4 Billion

So how many of those assets are stinking piles of horse crappola, especially since WAMU got their hands a little dirty with those Option ARMs? The FDIC might not have enough to cover this bet after Indymac's fiasco which wiped out $4-$8 billion of its $52 billion. Oh, and Indymac only had about 8,169 employees and $32 billion in assets. That damn horse is still alive!

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www.GenerationTrance.com

*Depeche Mode* Appreciation

The sad thing is it isn't over. Not for at least another year.

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quote:

Originally posted by bas Dual exhaust tips on dual exhaust = QUAD EXHAUST = 300 gain in horsepower. Duh

quote:

Originally posted by bas Undies with a dickhole aren't good for guys. Your balls can get caught in them. That's why I prefer to go over the gate instead of through the fence.

quote:

Originally posted by djGT I wonder which bank is next in line to fail. If it's WAMU, we're all in deep do-do. Full Time Employees: 43,198 Assets: $309 Billion Liabilities: $283 Billion Current Market cap: $4.4 Billion So how many of those assets are stinking piles of horse crappola, especially since WAMU got their hands a little dirty with those Option ARMs? The FDIC might not have enough to cover this bet after Indymac's fiasco which wiped out $4-$8 billion of its $52 billion. Oh, and Indymac only had about 8,169 employees and $32 billion in assets. That damn horse is still alive!

Probably AIG. WaMu is going downhill too, but i think they will get bought out at a discount.


Top Economist: Americans Should Worry About Bank Deposits if Congress Doesn't Act

Top Economist: Americans Should Worry About Bank Deposits if Congress Doesn't Act
Posted Sep 15, 2008 12:58pm EDT by Aaron Task in Investing, Recession, Banking
Related: LEH, MER, BAC, AIG, WM, ^DJI, ^GSPC

With the "financial storm of the century" hitting financial institutions, many Americans are worried about the safety of their bank deposits. While the FDIC insures individual accounts up to $100,000, the reaction to IndyMac's failure this summer -- lines outside retail branches -- shows Americans have limited faith in the Federal Deposit Insurance Corp., which guarantees individual accounts up to $100,000.

Such concerns are justified, says Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide.

That "run" could accelerate as people realize the FDIC fund has about $50 billion to "insure" about $1 trillion in assets at the nation's financial institutions, says Roubini. "They're going to run out of money" unless Congress acts soon to recapitalize the FDIC.

In addition, the recent spike in number of banks on the FDIC's "troubled list" is only through June, meaning even that inflated number understates the problem.

The intent here isn't to add to people's anxieties, but Roubini is one of the few market watchers to correctly predict the severity of this ongoing credit crisis. If nothing else, he says people with accounts exceeding $100,000 in value should spread their money - and the risk - among different firms.

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"Ibiza will be Earth’s final refuge after Armageddon" -Nostradamus

Bank of America to Buy Merrill Lynch for $50 Billion
By Charlie Gasparino

Bank of America said it agreed to buy Merrill Lynch in an all-stock deal worth $50 billion, snagging the world's largest retail brokerage after one of the worst-ever weekends on Wall Street.

BoFA is buying about $44 billion of Merrill's common shares, as well as $6 billion of options, convertibles, and restricted stock units.

Bank of America said it expects to achieve $7 billion in pretax expense savings, fully realized by 2012, and expects the deal to be accretive to earnings by 2010. The transaction is expected to close in the first quarter of next year.

The price, which comes to about $29 per share, represents a 70 percent premium to Merrill's share price on Friday, although Merrill's shares were trading at $50 in May and over $90 at the beginning of January 2007. The deal has been approved by directors of both companies. Three Merrill directors will join the Bank of America board.

Merrill plans to make an internal announcement to employees sometime between 8 and 9 a.m. New York Monday.

Merrill came under pressure to find a merger partner came after its liquidity began "evaporating" Friday and the firm became worried about a sharp decline in share price on Monday, according to people inside the firm.

Merrill is expecting huge job losses with the merger. The brokerage division will stay intact, but there will be large-scale reductions in workforce. CEO John Thain is also expected to leave.

"It's over," said one senior Merrill official.

The deal comes as Lehman Brothers Holdings prepares to file for bankruptcy after failing to find a buyer.

A Merrill Lynch spokeswoman and a Bank of America spokesman could not immediately be reached for comment. (View Charlie's round table discussion of the BoFa purchase of Merrill on the left)

Merrill, stuck with some of the same toxic debt -- much of it mortgage-related -- which torpedoed Lehman's balance sheet, has been hit hard by the credit crisis and has written down more than $40 billion over the last year.

Last month, Thain arranged to sell over $30 billion in repackaged debt securities to Dallas -based private equity firm Lone Star Funds.

"I'm surprised that Merrill Lynch would want to sell at this point," said Bill Fitzpatrick, an analyst at Optique Capital in Milwaukee. "They seem to be taking steps to improve their business. They have sold off a lot of their toxic assets. Merrill seems to be progressing to me."

In spite of these exposures, the bank is seen by some as undervalued, in part because of its massive brokerage business, which analysts have said is worth more than $25 billion.

The brokerage is the largest in the world by assets under management and number of brokers.

Merrill also has about a 45 percent stake in the profitable asset manager BlackRock, worth more than $10 billion.

"It could be a powerful fit," said Rick Meckler, chief investment officer at LibertyView Capital Management in New York.

But he added: " Merrill Lynch has significant exposures and Bank of America would need enough balance sheet to handle that."

Meckler also noted that the due diligence Bank of America would need to do on Merrill's books would be a serious undertaking, given the complexity of the company's exposure to mortgage-related securities and other complex debt.

With the brokerage and the BlackRock shares worth more than $35 billion combined, and Merrill's market capitalization at around $26 billion, investors are ascribing a negative value to the investment bank, implying huge potential embedded losses.

On the other hand, it would not be the first time Bank of America has done a quick acquisition.

In 2005, the bank bought credit card company MBNA after less than a week of due diligence, with Lewis saying the company was comfortable with the acquisition because it knew the people and business well.

Bank of America under Lewis has in fact become renowned for large acquisitions and it has spent over $100 billion since 2004 buying other companies.

Most recently it acquired troubled mortgage lender Countrywide Financial Corp and -- although many were skeptical about this purchase -- veteran analyst Dick Bove said last week the takeover could prove to be a master stroke by Lewis, since the government takeover of mortgage agencies Fannie Mae and Freddie Mac could fuel business for other lenders.

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quote:

Originally posted by bas Dual exhaust tips on dual exhaust = QUAD EXHAUST = 300 gain in horsepower. Duh

quote:

Originally posted by bas Undies with a dickhole aren't good for guys. Your balls can get caught in them. That's why I prefer to go over the gate instead of through the fence.

Damn, DOW fell below 11K after a 500 pt dump! But don't worry, we're not in a recession yet.

Good news though, gas prices have fallen and I just saved some $$$ by switching to Geico!

___________________
www.GenerationTrance.com

*Depeche Mode* Appreciation

But guys Mike gayLord said our economy is fine and that we aren't going through nor are moving towards a recession, but instead just a little "slowdown" -- Nevermind the orgy of financial data, collapsing banks, inflation, 6.1% unemployment, etc. what a douchebag. he said he worked at a brokerage, probably merrill lynch due to his disastrous judgement and terrible foresight


in other news:

http://money.cnn.com/2008/09/15/markets/markets_newyork2/index.htm?cnn=yes
Stocks get pummeled
Wall Street sees worst day since just after 9/11 attacks, with Dow down 500 points, as financials melt down.
NEW YORK (CNNMoney.com) -- Stocks tanked Monday, as investors reeled amid the fallout from the largest financial crisis in years after Lehman Brothers filed for the biggest bankruptcy in history and Bank of America said it would buy Merrill Lynch in a $50 billion deal.
Treasury prices rallied as investors sought the comparative safety of government debt, sending the corresponding yields lower. Oil prices tumbled, falling well below $100 a barrel on slowing global economic growth. The dollar rallied versus other major currencies and gold prices spiked.
The Dow Jones industrial average (INDU) lost 500 points, or 4.4%, according to early tallies. It was the biggest one-day point decline for the Dow since Sept. 17, 2001, when the market reopened for trading after having been closed in the aftermath of 9/11 terrorist attacks.


http://online.wsj.com/article/SB122...=2_1553_leftbox

AIG Tumbles 61%, Pushing
Dow to a 500-Point Decline
September 15, 2008 4:34 p.m.

The stock market suffered its worst daily plunge of the year Monday as the bankruptcy of Lehman Brothers Holdings threw the U.S. financial system into an abyss, uncertain where the bottom of its credit-related problems lies.

Lehman's demise makes it the biggest casualty yet in the long-running credit crisis, which has so far seen torrents of red ink, restructurings and acquisitions, and shutterings of a few commercial banks. But until Sunday night, no Wall Street firm of such size and stature had suffered an all-out meltdown.

The Dow Jones Industrial Average, which languished with a loss between 200 and 300 points for most of the day, saw its losses accelerate in the last hour of trading. It ended down by 504.48 points, off 4.4%, at 10917.51.

All 30 of its components fell, led by a 60.8% plunge in American International Group. The Federal Reserve on Monday asked Goldman Sachs Group and J.P. Morgan Chase to help make $70-$75 billion in loans available to the company, according to people familiar with the situation. The insurer has been racing to restructure its business and raise fresh capital to avoid a downgrade of its credit ratings



http://bloomberg.com/apps/news?pid=...fvkU&refer=home

Sept. 15 (Bloomberg) -- U.S. stocks tumbled, pushing the Standard & Poor's 500 Index to the steepest drop since the September 2001 terrorist attacks, as Lehman Brothers Holdings Inc.'s bankruptcy and declining commodities increased speculation that credit-market losses and the economic slowdown will worsen.
Stocks erased more than $600 billion in value as financial shares in the S&P 500 decreased the most since at least 1989, according to data compiled by Bloomberg. American International Group Inc. sank 61 percent and Washington Mutual Inc. decreased 27 percent. Concern the U.S. is heading for a recession pushed oil lower, prompting a drop in energy stocks, and sent General Electric Co. down 8 percent.




PS. I'll have to start a new thread "Arrived: Depression 4Q 08/1Q 09" -- unless we don't vote in a third term Bush aka McCain and get Obama administration in to start the healing process. But alas there is little anyone can do prevent the coming disasters, I just hope they will be shorter lived then I predict.

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Last edited by ninetyninej on Sep-16-2008 at 02:39

Lehman is the largest Chapter 11 case on Wall Street...

#1 LEH - $629 Billion in Pre-Barnkrupcy assets
#2 WorldCom - $103.9 Billion in Pre-Barnkrupcy assets
#3 Enron - $63.4 Billion in Pre-Barnkrucy assets

Speaking of unemployment... this week: Lehman left 25,000 people unemployed, Merrill 60,000 people... and HP just laid off 24,600 jobs.


New York housing market may feel Wall Street woes
Monday September 15, 4:43 pm ET
By Alan Zibel, AP Business Writer
Wall Street layoffs, shrunken bonuses could sap New York real estate market

Finally, New Yorkers may get a real estate reality-check.

Home sellers, agents and brokers nervously tuned in Monday to news of Wall Street titans collapsing or teetering, as Lehman Brothers Holdings Inc. filed for bankruptcy, Merrill Lynch & Co. was sold to Bank of America Corp. and New York-based insurance giant American International Group Inc. struggled to stabilize its finances.

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Until now, the New York area's housing market has been relatively unscathed by the national housing bust. While home prices in cities like Las Vegas, Los Angeles and Miami are down 25 percent or more over the past year, New York metro area prices declined about 7 percent, according to the Standard & Poor's/Case-Shiller index.

In Manhattan -- where the median-priced home cost more than $1 million -- prices were actually up 14 percent in the second quarter from a year ago. And prices in desirable suburbs are holding steady.

But Monday's cataclysm on Wall Street could be the event that finally pushes Manhattan property values downward, said Jonathan Miller, president and chief executive of real estate appraisal and consulting firm Miller Samuel Inc.

"There's an expectation that we're going to see a weakening in prices," said Miller, who declined to give a specific forecast, but did say that any price declines are likely to be moderate.

Potential homebuyers with Wall Street jobs have already been looking at smaller houses or putting off their real estate search, said Lina Panza, a real estate agent for Re/Max in Montclair N.J., who has several clients at Wall Street firms.

"It's a major, major purchase and people are nervous," she said. "They're less inclined to buy something big."

Wall Street firms have slashed the ranks of contractors and hacked at expenses like car service and business travel. Now, the roughly 25,000 workers at Lehman, as well as many of the 60,000 at Merrill, are likely to be hunting for new work.

"This can't be good, because people are losing jobs," said Ellen Bitton, chief executive of Park Avenue Mortgage Group. "Nobody would have ever thought that a Lehman would go out of business."

However, any downturn in prices is likely to be met with an influx of foreign buyers, taking advantage of the weak U.S. dollar, real estate agents say. Wealthy buyers from Italy, Russia and Great Britain in particular have snapped up properties in recent months, taking advantage of their strong currency compared with the U.S. dollar.

"Everybody wants a piece of the city," said Debra Duneier, senior associate broker with Corcoran Group. "People with money will seize the opportunity to buy real estate."

Marcus Garstein, president of Warren Lewis Realty in Brooklyn's Park Slope neighborhood, said an influx of Wall Street money helped drive up prices in recent years, but doesn't believe that demand for the area's historic brownstones will be dampened.

"There's still a lot of money in the economy," he said. Sellers, he said, are "not putting them up at fire sale prices."

And in the New Jersey, New York and Connecticut suburbs, sought-after school districts and relatively easy train commutes to Manhattan are likely to keep the housing market relatively stable.

Nevertheless, the local real estate market and the economy are both heavily dependent on the Street. While Wall Street jobs only make up 5 percent of all of New York City's workers, salaries there are so high, they represent almost a quarter of the city's total wages, according to a report last year by the New York state comptroller's office.

Such jobs, paying more than $300,000 on average, were also responsible for more than half of all income growth in New York's five boroughs in recent years.

New York's economy reaped the benefits when Wall Street financial bonuses broke records in 2006 -- estimated by the state comptroller at $33.9 billion. But this year bonuses are expected to plunge by 30 percent, according to a forecast by the city comptroller.

"Certainly, it's going to affect the real estate market," said Sandra Lippman, a real estate agent in suburban Westchester County, N.Y. "We do depend on people in the financial markets who are buying homes here

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"Ibiza will be Earth’s final refuge after Armageddon" -Nostradamus

quote:

Originally posted by diskodave Lehman is the largest Chapter 11 case on Wall Street... #1 LEH - $629 Billion in Pre-Barnkrupcy assets #2 WorldCom - $103.9 Billion in Pre-Barnkrupcy assets #3 Enron - $63.4 Billion in Pre-Barnkrucy assets Speaking of unemployment... this week: Lehman left 25,000 people unemployed, Merrill 60,000 people... and HP just laid off 24,600 jobs.

Yeah, the Labor Department's September numbers that come out in the beginning of October are going to be ass fucked. Like 6.5% unemployment!

Wall Street Turmoil As Lehman Staff Pack Bags

Video:
Lehman Brothers staff were packing up their desks after word came down that there would be no bailout for the 158-year-old investment bank, Doug Luzader reports. (Sept. 15)

http://link.brightcove.com/services...bctid1785349397

LOL @ Lehman Brother's Managing Director Mo Grimeh's quote 'people are drinking beer and smoking inside..."

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quote:

Originally posted by diskodave Probably AIG. WaMu is going downhill too, but i think they will get bought out at a discount.

NY Times just reported AIG has hired Law firm Weil Gotshal to draw up BK Papers and could file as soon as Weds if they can not find financing...

quote:

Originally posted by ninetyninej Yeah, the Labor Department's September numbers that come out in the beginning of October are going to be ass fucked. Like 6.5% unemployment!

AIG has 116,000 full-time employees.

___________________
"Ibiza will be Earth’s final refuge after Armageddon" -Nostradamus