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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
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Wednesday, September 17, 2008

AIG Crisis Done, Next WaMu

US Federal Government trying to find someone to buy WaMu

Russian Stock market halted, after collapsing 10% in 1 hour

International Monetary Fund states worst of financial crisis still ahead

Libor Interest rates jump biggest % in 9 years

Fed PAID (aka looong term loan) JPMorgan 87 Billion to "buy" Lehman. Drop in the bucket compared to Financial Ground Zero. But once again, taxpayers are paying for everything, it's open season.

As I have previously reported, the FDIC is running out of funds. No surprise here. NOTE: The Government WILL print money, so FDIC will ALWAYS pay 100K insurance.

Complete utter rumor, Morgan Stanley may be seeking Bank to merge with. I normally wouldn't report such rumors, but recently, rumors often have some truth behind it. If Morgan merges, USA will have gone from 5 USA born, independent investment banks to one, Goldman Sachs. And Goldman has a good ally, Paulson.

The government failed to regulate across the board, instead of doing their job, congress will start the witch hunt for the evil-doers. This is a joke, since basically everyone participated in the unsound financial practices. I may have disdain for execs taking billions in bonuses and within a year leading the company into failure. But in fairness, the situation was systematic and country wide. The failure was poor fundamentals starting with the government allowing "asset 3" being off the books, and allowing debt being valued on computer models rather than open market trading. Both are textbook root causes of the last Great Depression. The government should mandate a US history test before individuals can serve.
The real witch hunt, which hasn't started, is mass lawsuits on companies like Moody's for mis-representing risk. (Disclosure, I am short Moody's)
UPDATE: 9/29/08 Goldman Sachs profited significantly from AIG bailout. I wonder if Paulson hesitated by the conflict......

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