paulson says

[lamboguy]

american's should remain confident in US financial system. he just closed up a large financial institution that has been around for 150 years. he made a deal to supposedly bail out merril lynch. merril stock is to be taken over by bank of america for 29 in boa stock. friday merril taded at 17, today it opened up at 21 and closes at 17. does anyone beleive that the deal is real, i think the people trading the stock have a few unanswerd questions!

at least we can beleive in paulson, and fairy tales

and thank you mr. akavano

[riskman]

"Paulson and Bernanke and Geithner (the troika managing this financial crisis) have all made public statements in the last few months to the necessity of finding an orderly way to close down – rather than bailout – a major and systemically important non bank financial institutions: the embarrassment and losses for the Fed that the bailout of the creditors of Bear led made it paramount to avoid another Bear like bailout. That is why they played tough with Lehman and its creditors. But in this game of chicken the Fed and the Treasury may end up being the ones to blink. Even in the case of the Bank of America purchase of Countrywide such public subsidy was significant (the FHLB of Atlanta lent to Countrywide over $50 billion and Bank of America has most likely received plenty of tacit forbearance from the Fed to support its takeover of an insolvent Countrywide).

The trouble is that, in spite of all public statements regarding the need to provide an orderly demise of large broker dealers, the Fed and the Treasury have done nothing to create such insolvency regime for such broker dealers. So the only option for Lehman – since a buyer was not found - was ending up in Chapter 11. This could trigger massive losses on its counterparties that will in turn trigger a run on such counterparties.
The process of unraveling of independent broker dealers started with Bear Stearns; now it is moved to Lehman; Merrill Lynch was saved by Bank of America this past weekend and Morgan Stanley and Goldman Sachs could be next. It is doubtful either one of them can and will survive as independent entities. So, the Fed and Treasury should advise them all to start finding a large international partner (international as almost no domestic partner is now sound to take them over) and merge with such partner before we get another Bear or Lehman disaster.

The step by step approach of Fed and Treasury to crisis management has been a failure so far as plugging and filling one hole at the time is useless when the entire system is collapsing in the perfect financial storm of the century. A much more radical, holistic and systemic approach to crisis management is now necessary.

What we are facing now is the beginning of the unraveling and collapse of the entire shadow financial system, a system of institutions (broker dealers, hedge funds, private equity funds, SIVs, conduits, etc.) that look like banks (as they borrow short, are highly leveraged and lend and invest long and in illiquid ways) and thus are highly vulnerable to bank like runs; but unlike banks they are not properly regulated and supervised, they don’t have access to deposit insurance and don’t have access to the lender of last resort support of the central bank (with now only a small group of them having access to the limited and conditional and thus fragile support of the Fed). So no wonder that this shadow banking system is now collapsing. " http://angrybear.blogspot.com/2008/09/roubini-and-bail-in-this-weekend.html

What is coming next?

[lamboguy]

let me ask you this question, why would anyone in their right mind pay anything at all for a negetive asset like merril lynch? if you gave bank of america $100 billion to take over merril it would probably be a bad deal for boa.
in my opionion, paulson made deal with boa to take the sting out of the day, by making it look like they are taking over this problem for the time being. if both lehman and merril went down on the same day and you still have wamu and the prize of them all to deal with AIG, you would have had a 5000 point dow drop instead of only 500.

the thing that really bothers me here is that you now have company's that lie to you on a continual basis, and the government backing them up.

[Tom]

american's should remain confident in US financial system.


What would you like him to say? The sky is falling? Create runs taht drive more banks under? Remeber that moron UpChuck Schummer just did that very thing - opened his stupid mouth and killed a bank. That is pretty irresponsible, even for someone of limited intellignece like Chucky the Dem.

[lamboguy]

hey tom nice job these leftist republicans have done with your country, you must be proud of them.

[Tom]

Tell me you don't actually believe that stupid statment? You can't understand how the dems failed, how the CEO failed, how the Fed failed?
you can't be so shallow as to think you blame this on Bush, can you?

Did you know the that the wo senators gettingthe most bribes, er, contributions from Fannie Mae were Dodd, #1, and Obama #2?
Dodd also got sweetheart deals...........oh, excsue me, facts getting in the way?


Read my lips....THIS FAILURE IS A TEAM EFFORT. And now the people who caused it through thier influence now control the game.

[lamboguy]

i don't care from republican's or democrat's, they seem to act like a team to derail the public that they govern. if you want to be proud of this trainwreck you call a good leader for the last 8 years, please be my guest. that is what makes horseracing. beauty is only in the eye of the beholder.

[Tom]

Did someone say something? :confused:
Anyone there?

[PaceAdvantage]

i don't care from republican's or democrat's, they seem to act like a team to derail the public that they govern. if you want to be proud of this trainwreck you call a good leader for the last 8 years, please be my guest.Please explain to me how Bush, or any Republican or Democrat are responsible for these irresponsible firms BLOWING UP?

If I take on too much risk and put all my money into a penny stock, is the Gov't going to step in and bail me out when I lose everything? NO!

How is Bush responsible for what these (formerly) DARLINGS of Wall Street do in their day-to-day financial dealings?

These firms SCREWED UP BIG TIME...plain and simple....

PS riskman: Goldman Sachs ain't going ANYWHERE....they're as good as gold...literally...