Lehman Races Clock; Crisis Spreads
- Susanne Craig et al, Wall St. Journal
If Lehman Fails, Would You Feel It?
- Tom Petruno, Los Angeles Times
Lehman Brothers Bailout? Just Say No
- Jesse Eisinger, Portfolio
BofA Reaches Deal for Merrill
- Karnitschnig/Mollenkamp/Fitzpatrick, WSJ

China may cut its dollar holdings - CICC: China, which holds a fifth of its currency reserves in Fannie Mae and Freddie Mac debt, may cut the portion held in US dollars, according to China International Capital Corp (CICC), one of the nation's biggest investment banks.

US economy: Retail sales slump as consumers tighten their belts: Analysts had expected sales to rise by 0.3% last month but data from the Commerce Department today showed a fall of 0.3%. This is the second month in a row that sales have declined, and the figure for July was also sharply revised, to a drop of 0.5%. It had previously been reported as a 0.1% fall.

Warning: 30 airlines will go bust this year: Up to 30 more airlines will go bankrupt before Christmas, the chief executive of British Airways warned yesterday, as the biggest rescue of stranded passengers in travel industry history began.

Chaos Doesn't Rule Out Recovery - Anatole Kaletsky, Times of London
Wall Street's Perfect Storm - David Henry, BusinessWeek
Where Did It All Go Wrong? - David Weidner, MarketWatch
When Can We Start Breathing Again? - Felix Salmon, Market Movers
A Lesson from Lehman - Editorial, New York Sun
Lehman Is Toxic at Any Price - Peter Morici, RealClearMarkets
Hubris--Is Thy Name Richard Fuld? - Frank Partnoy, Financial Times
A Stunning Fall for Merill Lynch - Louise Story, New York Times
Wall Street Privatizes U.S. Government - Charles Dumas, Daily Telegraph
Too Few Regulations? No, Just Ineffective Ones - Tyler Cowen, NY Times
The Choice: Capitalism or Regulation - Joseph Calhoun, RealClearMarkets
New Evidence on Taxes, Income - Laffer & Moore, Wall St. Journal

Chaos Doesn't Rule Out Recovery - Anatole Kaletsky, Times of London
Wall Street's Perfect Storm - David Henry, BusinessWeek
Where Did It All Go Wrong? - David Weidner, MarketWatch
When Can We Start Breathing Again? - Felix Salmon, Market Movers
A Lesson from Lehman - Editorial, New York Sun
Lehman Is Toxic at Any Price - Peter Morici, RealClearMarkets
Hubris--Is Thy Name Richard Fuld? - Frank Partnoy, Financial Times
A Stunning Fall for Merill Lynch - Louise Story, New York Times
Wall Street Privatizes U.S. Government - Charles Dumas, Daily Telegraph
Too Few Regulations? No, Just Ineffective Ones - Tyler Cowen, NY Times
The Choice: Capitalism or Regulation - Joseph Calhoun, RealClearMarkets

The Mother of all Mondays - Tim Annett, MarketBeat
What a Lehman Bankruptcy Filing Might Look Like - DealBook
Palin-Barricuda Index, Part II - Rafael Resendes, Capitalist Nexus
How Wall Street Can Save Itself - Heidi Moore, Deal Journal
Live Blogging Lehman CNBC Show - Barry Ritholtz, Big Picture
El-Erian Sums It Up Nicely With Word 'Unthinkable' - Curious Capitalist

Transcripts & Videos
Notes on the Merrill-Bank of America Deal - Maria Bartiromo, CNBC
Roubini Says U.S. Financial Industry Facing 'Disaster' - Bloomberg
What Is The SEC's Role in All of This? - CNBC
O'Rourke Says Lehman Bankruptcy 'Not Good' for Stocks - Bloomberg

• Turmoil on Wall Street
  • Lehman Files for Chapter 11
  • Fed Expands Lending Facilities; ECB, BOE Pump Cash Into Markets
  • Bank of America to Buy Merrill
  • AIG Seeks to Raise Cash
  • More at RealClearMarkets
• Wall Street Fallout
  • The Japan Lesson: US Must Own Up
  • Jittery Road Ahead
  • What Will Put a Floor Down?
  • A Lesson from Lehman

SPENGLER
Lehman and the end of the era of leverage

The failure of Lehman Brothers and Bear Stearns does not reflect the breakdown of a particular kind of corporate culture. What took both firms down, rather, is a sudden break in the chain of expectations between the present and the future. Today’s savers no longer have any confidence that they will earn enough to fund their retirements by putting money at risk. And so the Great Crash of 2008 enters a new phase. (Sep 15, '08)

Silences say it all
Lehman Brothers' death throes demonstrated that here, at last, was one US financial institution that, though big, was not "too big to fail", one that at last would pay for its promiscuous and profligate ways. If we should say nothing but good of the dead, then there's nothing else to say. Next up for the measuring tape is Bank of America/Merrill. - Julian Delasantellis (Sep 15,

Going into debt to buy a debt
Americans elected socialist morons who have now spent the country into deficit-spending bankruptcy by letting the Federal Reserve create the money that people borrowed (thus creating a debt) so that they could buy Treasury debt! Hahaha! Going into debt to buy a debt!

Wall Street has become fundamentally corrupt
Kansas City Star - MO,USA
They have also agreed to buy back more than $50 billion in auction rate securities from retail investors who had been misled into believing that those ...


'Closed-End' Funds Sale
Wall Street Journal - USA
Many use auction-rate securities to create leverage, which is a big part of what has widened discounts. Earlier this year, auctions for these securities ...

Economy


China Cuts Interest Rates as U.S. Financial Turmoil Adds to Global Risks China cut interest rates for the first time in six years and allowed most banks to set aside smaller reserves as worsening credit-market turmoil and weakening export demand dimmed the outlook for economic growth.

Fed Eases Loan Terms, Banks Set Up $70 Billion Fund in `Firebreak' Effort The Federal Reserve widened the collateral it accepts for loans to securities firms to include stocks in an effort to help Wall Street weather Lehman Brothers Holdings Inc.'s plans for bankruptcy.

ECB, Bank of England Join Federal Reserve in Soothing Markets After Lehman The European Central Bank and the Bank of England joined the Federal Reserve in taking action to soothe financial markets spooked by Lehman Brothers Holdings Inc.'s bankruptcy filing.

U.S. Industrial Production Fell More Than Forecast as Automakers Slumped Industrial production in the U.S. fell in August by the most in almost three years as the slowdown in consumer spending prompted automakers to cut back.

World May Face `Japan-Like' Stagnation Amid Credit Crisis, GIC's Tan Says The world may face ``Japan-like'' economic stagnation as turmoil in financial markets weighs on growth and challenges the ability of policy makers to manage the crisis, Government of Singapore Investment Corp. said.

Lehman Says It Will Seek Bankruptcy Protection as Suitors, Government Balk Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history.

Europe Shuns U.S.-Style `Active Role' in Boosting Economy, Bank Bailouts European finance ministers and central bankers said they had no plans to follow the U.S. in stimulating their economy and failed to agree on ways of rescuing any foundering financial institution.

Swinging Real, Won Point to More Pain as Economies Recouple Amid Slowdown Swings in emerging-market currencies may foreshadow further losses for traders already suffering from the broadest declines this decade.

British Business Lobby Predicts Recession, Calls for Half-Point Rate Cut The Confederation of British Industry, the nation's top business lobby, said the central bank should slash its benchmark interest rate in November by the most in seven years to halt a recession.

Paulson's Fannie, Freddie Takeover Diminishes Financing Options for Banks Treasury Secretary Henry Paulson's decision to seize Fannie Mae and Freddie Mac may choke off the biggest source of funding for financial companies suffering from the collapse of the subprime mortgage market.

Industrial Production in U.S. Fell More Than Forecast: Table of the Day Following is a summary of the U.S. industrial production and capacity utilization report for Aug. released by the Federal Reserve.

Lehman Files for Biggest Bankruptcy as Suitors Balk

• Bloomberg
• 09/15/2008 07:37 AM

ECB, BOE to Pump Cash Into Markets

• WSJ ($)
• 09/15/2008 05:16 AM

Lehman Files for Biggest Bankruptcy as Suitors Balk

• Bloomberg
• 09/15/2008 05:03 AM

Banks Roll Out $70 Billion Loan Program

• WSJ ($)
• 09/14/2008 09:54 PM

A.I.G. Seeks $40 Billion in Fed Aid to Survive

• NY Times
• 09/14/2008 09:24 PM

Wall Street banks fight for life

• FT ($)
• 09/14/2008 08:50 PM

Fed Widens Collateral for Loans to Investment Banks

• Bloomberg
• 09/14/2008 08:11 PM

Bank of America Reaches Deal for Merrill

• WSJ ($)
• 09/14/2008 08:00 PM

Banks Discuss Forming Fund to Invest in Troubled Finance Firms

• Bloomberg
• 09/14/2008 07:59 PM

Rush Is On to Prevent A.I.G. From Failing

• NY Times
• Morgenson
• 09/14/2008 06:12 PM

http://www.nytimes.com/2008/09/15/opinion/...tml?ref=opinion

September 15, 2008
Op-Ed Columnist
Financial Russian Roulette
By PAUL KRUGMAN

Will the U.S. financial system collapse today, or maybe over the next few days? I don’t think so — but I’m nowhere near certain. You see, Lehman Brothers, a major investment bank, is apparently about to go under. And nobody knows what will happen next.

To understand the problem, you need to know that the old world of banking, in which institutions housed in big marble buildings accepted deposits and lent the money out to long-term clients, has largely vanished, replaced by what is widely called the “shadow banking system.” Depository banks, the guys in the marble buildings, now play only a minor role in channeling funds from savers to borrowers; most of the business of finance is carried out through complex deals arranged by “nondepository” institutions, institutions like the late lamented Bear Stearns — and Lehman.

The new system was supposed to do a better job of spreading and reducing risk. But in the aftermath of the housing bust and the resulting mortgage crisis, it seems apparent that risk wasn’t so much reduced as hidden: all too many investors had no idea how exposed they were.

And as the unknown unknowns have turned into known unknowns, the system has been experiencing postmodern bank runs. These don’t look like the old-fashioned version: with few exceptions, we’re not talking about mobs of distraught depositors pounding on closed bank doors. Instead, we’re talking about frantic phone calls and mouse clicks, as financial players pull credit lines and try to unwind counterparty risk. But the economic effects — a freezing up of credit, a downward spiral in asset values — are the same as those of the great bank runs of the 1930s.

And here’s the thing: The defenses set up to prevent a return of those bank runs, mainly deposit insurance and access to credit lines with the Federal Reserve, only protect the guys in the marble buildings, who aren’t at the heart of the current crisis. That creates the real possibility that 2008 could be 1931 revisited.

Now, policy makers are aware of the risks — before he was given responsibility for saving the world, Ben Bernanke was one of our leading experts on the economics of the Great Depression. So over the past year the Fed and the Treasury have orchestrated a series of ad hoc rescue plans. Special credit lines with unpronounceable acronyms were made available to nondepository institutions. The Fed and the Treasury brokered a deal that protected Bear’s counterparties — those on the other side of its deals — though not its stockholders. And just last week the Treasury seized control of Fannie Mae and Freddie Mac, the giant government-sponsored mortgage lenders.

But the consequences of those rescues are making officials nervous. For one thing, they’re taking big risks with taxpayer money. For example, today much of the Fed’s portfolio is tied up in loans backed by dubious collateral. Also, officials are worried that their rescue efforts will encourage even more risky behavior in the future. After all, it’s starting to look as if the rule is heads you win, tails the taxpayers lose.

Which brings us to Lehman, which has suffered large real-estate-related losses, and faces a crisis of confidence. Like many financial institutions, Lehman has a huge balance sheet — it owes vast sums, and is owed vast sums in return. Trying to liquidate that balance sheet quickly could lead to panic across the financial system. That’s why government officials and private bankers have spent the weekend huddled at the New York Fed, trying to put together a deal that would save Lehman, or at least let it fail more slowly.

But Henry Paulson, the Treasury secretary, was adamant that he wouldn’t sweeten the deal by putting more public funds on the line. Many people thought he was bluffing. I was all ready to start today’s column, “When life hands you Lehman, make Lehman aid.” But there was no aid, and apparently no deal. Mr. Paulson seems to be betting that the financial system — bolstered, it must be said, by those special credit lines — can handle the shock of a Lehman failure. We’ll find out soon whether he was brave or foolish.

The real answer to the current problem would, of course, have been to take preventive action before we reached this point. Even leaving aside the obvious need to regulate the shadow banking system — if institutions need to be rescued like banks, they should be regulated like banks — why were we so unprepared for this latest shock? When Bear went under, many people talked about the need for a mechanism for “orderly liquidation” of failing investment banks. Well, that was six months ago. Where’s the mechanism?

And so here we are, with Mr. Paulson apparently feeling that playing Russian roulette with the U.S. financial system was his best option. Yikes.

No final act in sight for U.S. financial crisis By Alex Berenson
Sunday, September 14, 2008 A lot of smart people have tried to call the bottom on Wall Street this year.

So far, they have all been wrong.

Since the financial crisis first hit in August 2007, markets - and the financial industry - have gone through a series of swoons, each more dizzying than the last.

Last week, the crisis reached a new pitch, as Lehman Brothers, the fourth-largest U.S. investment bank, struggled to avoid joining Bear Stearns on the trash heap, and shares of Washington Mutual, the largest savings and loan, fell briefly below $2.

Now even Wall Street's professional optimists have given up predicting exactly when their industry might stabilize. One senior executive at a top investment bank suggested recently that there was no ending in sight to the crisis.

Until now, the cataclysm in the banking and securities industry has damaged but not derailed the rest of the economy. Economists generally predict that the United States will grow slowly over the next few months but avoid a deep recession, especially if oil prices fall farther, easing pressure on consumers, and exports remain strong.

But as the Wall Street crisis moves into its second year, the risks to the overall economy are increasing. The economy grew during the first half of the year, but businesses are cutting jobs and consumers are reducing spending. In August, the unemployment rate reached 6.1 percent, compared with 4.7 percent less than a year ago.

Until the worst turmoil on Wall Street ends, the economy will struggle, said Sung Won Sohn, an economist at California State University, Channel Islands, in Camarillo, California, who studies financial markets.

"Until and unless we have financial markets stabilize, I don't think we will see a meaningful recovery in housing, and therefore in the economy," Sohn said. He said he expected economic growth to remain close to zero through the middle of 2009 before finally beginning to accelerate.

Steven Wieting, the United States economist for Citigroup, said: "We're describing the U.S. economy as recessionary."

Wieting and other economists say that the Federal Reserve and the government have few good options left to ease the pressure on financial firms or the economy. The Fed has already cut short-term interest rates to 2 percent, below the rate of inflation, and the government has offered consumers and businesses $150 billion in tax rebates and cuts this year.

The Fed has also taken several measures to buoy the financial industry, such as allowing more banks access to low-interest, short-term loans. Yet Wall Street continues to struggle through the aftereffects of the biggest speculative bubble in history.

Financial services companies have cut more than 100,000 jobs this year, according to Challenger, Gray & Christmas, an executive placement firm, and deeper layoffs may come this fall.

Yet the picture may not be entirely bleak. When the chaos finally ends, Wall Street will almost certainly be smaller and more risk-averse. That change could eventually put the economy on firmer footing.

The crisis appears to mark the end of a bubble in the financial markets that has lasted nearly two decades. The speculation began in technology stocks in the 1990s and turned to real estate, commodities and private equity buyouts this decade. Along the way it powered the New York City economy and helped drive income inequality nationally.

While the stock market has not been as frenzied this decade as it was at the end of the 1990s, rampant speculation took over many other financial markets, Wieting said. "In the last couple of years, financial activity became less related than we've seen before to real economic developments," he said.

Now Wall Street is reeling, as a significant fraction of the speculative real estate loans that banks made during the boom years are underwater. Because banks have limited capital to absorb losses, investors worry that those losses will overwhelm them.

The problem has been worsened by the financial instruments that banks hedge funds and insurance companies have created to swap loans and risk with one another. In theory, those products can help investors and companies diversify risk, but they are nearly impossible to value.

"Investors just don't know what these assets are worth," said Ed Yardeni, president of Yardeni Research. "There's no transparency. It's totally up to management to decide what these assets are worth and tell their accountants."

For example, Lehman said last week that it had $20 billion in tangible equity- money that would theoretically be available to its shareholders if Lehman had to be liquidated. But those same shareholders valued Lehman at only $2 billion as of Friday, proof that they do not have confidence in the way Lehman has calculated its assets.

Now investors are demanding that banks like Lehman and Washington Mutual raise capital or sell their assets to raise cash and prove that they are solvent. But when banks are under pressure, they cannot easily find new investors or purchasers for their assets. It is as if a family were told to sell its home overnight, for cash, or lose it. The family would surely receive a far lower price than the property would generate in a more orderly sale.

So, one by one, the banks that took on the most risk are facing the real possibility of going under. Those with stronger balance sheets, such as Morgan Stanley, Goldman Sachs and JPMorgan Chase, are suffering much less.

For Wall Street, the lesson has been sobering - and unlikely to be forgotten for several years, said Sohn, the California State economist.

"The restraint in the credit markets will last quite some time," Sohn said. In the mortgage business, which saw the worst excesses, loan practices may remain stricter for at least a decade, he said. The results will be both positive and negative, he said.

The speculation that has produced wide swings in commodities prices and vacant housing subdivisions across California and Florida may become less prominent. But people who want to buy homes may continue to struggle to get mortgages, even if they have excellent credit.

Companies that need loans to expand, or just to survive rough economic patches, will also have a harder time finding financing.

"We went overboard," Sohn said. "As a result, the financial market is imposing some discipline on our behavior, and it's painful. But that's how the system works."

Jared Bernstein, senior economist at the Economic Policy Institute, a liberal research group in Washington, said that, in a best-case outcome, greater risk aversion in the financial markets might eventually encourage the United States to rely less on bubbles and speculative lending to drive economic growth.

Instead, the government could pursue policies designed to drive wages higher for middle- and lower-class Americans, he said, allowing them to buy homes and cars without taking on ruinous debt.

"We have to find a new way - or maybe it's an old way - to stimulate enough demand for the economy to do what it's supposed to do without speculative excess," Bernstein said. "A recovery that's driven by more broadly shared prosperity, where consumption is fairly evenly shared through the economy, that kind of growth is more sustainable."

Even so, Bernstein said he was not cheering Wall Street's deep struggles. "The financials are the heart of the credit system, and credit is the lifeblood of our economy," he said. "There's no question that we will pay a cost in terms of much diminished growth if this continues."

'Franron' bailout: Good plan, bad news
Did I say "Inflation", I meant "deflation".
The Joys of Ownership
Financial Russian Roulette
The Lehman Lesson
How housing bill helps banks, not taxpayers
Alt-A Mortgages Next Risk for Housing Market as Defaults Surge

The Demise of the Shadow Banking System and of the Broker Dealers: Some Media Appearances Nouriel Roubini | Sep 15, 2008 I discussed in detail over the weekend the Lehman and Merrill crisis and explained why - as I argued months ago - the remaining broker dealers (now only Morgan Stanley and Goldman Sachs being left) will go bust unless they merge with a financial institution that has a stable base of insured deposits. The business model of broker dealers is fundamentally broken and cannot be fixed. I elaborated in detail in a series of interviews yesterday and today on these views. Here are below the links to these interviews.

Here is a link to my July interview on Tech Ticker ("They're All Toast': Roubini Says Brokers, Even Goldman, Can't Stay Independent") where I predicted the demise of all of the independent broker dealers.

Subprime Mortgage Meltdown: Paulson's Quick Draw - by Peter Schiff - 2008-09-15

<h3 class="post-title entry-title">IMCO, Vanguard and Japanese Banks Face Billions in Losses on Lehman Bonds </h3>
Many firms are holding hurried meetings today over these losses, to assess the impacts with respoect to money market funds, mutual funds, and pension plans. Legg Mason, Fidelity, Axa SA, Franklin Advisers, Vanguard and Pimco are among the largest stakholders.

This is minor compared to what some other failures might look like such as Goldman, Morgan Stanley, AIG, or a major bank like Washington Mutual and Wachovia.

The thing about commercial banks is that there is a well established mechanism for sweeping them into the money bin as long as the dollar and Treasury bonds hold up. Not so for insurance companies and investment banks, which are messy.

Interesting as well that it was Lehman and Bear that took it in the necks, as they were the two big bond houses.

If it is true that they are allowing banks to use depositor's funds to recapitalize their investment activities, then we have come full circle back to 1929 and all that implies.


Pimco, Vanguard Are Biggest Lehman Bond Fund Losers
By John Glover
Bloomberg News

Sept. 15 (Bloomberg) -- Pimco Advisors LP, Vanguard Group Inc. and Franklin Advisers Inc. are among investment companies that may face losses of at least $86 billion stemming from the collapse of Lehman Brothers Holdings Inc., the biggest bankruptcy in history.

Mutual fund companies' filings show they hold more than $143 billion of bonds, led by Newport Beach, California-based Pacific Investment Management Co., manager of the world's biggest bond fund, and Valley Forge, Pennsylvania-based Vanguard, according to data compiled by Bloomberg as of June 30.

``The losses look set to be widespread, hurting the public through their mutual and pension funds,'' said Ciaran O'Hagan, a credit strategist at Societe Generale SA in Paris. ``It's clearly a disaster for public confidence.''

While bond investors will recover different amounts based on their ranking in Lehman's capital structure, models of credit-default swaps assume lenders will recoup 40 percent of their loans overall in a bankruptcy. Investors may receive less than that, based on prices for Lehman's senior bonds of as little as 35 cents on the dollar from price provider Trace.

Pimco holds Lehman bonds in at least 12 of its funds, including the $134 billion Total Return Fund. Bill Gross, manager of the fund and co-chief investment officer of Pimco, was buying Lehman bonds as recently as June, Bloomberg data show. ...

Vanguard holds Lehman bonds among the $450 billion of fixed income it manages, spokesman John Woerth said. An outside spokeswoman for Pimco in London, who asked not to be named, said the company had no immediate comment, Lisa Gallegos, a spokeswoman for Franklin in San Mateo, California, wasn't immediately available.

New York-based Lehman, which filed for protection from creditors today, owes its 10 largest unsecured creditors more than $157 billion, according to the Chapter 11 filing in U.S. Bankruptcy Court in New York. The largest single creditor is Aozora Bank Ltd. in Tokyo, with $463 million in a bank loan. Other top creditors include Mizuho Corporate Bank Ltd., owed $382 million, and a Citigroup Inc. unit based in Hong Kong, owed an estimated $275 million, according to the filing.
Lehman listed total debts of $613 billion and $639 billion of assets in the filing.

Axa SA, Europe's second-biggest insurer, and unnamed affiliates, own 7.25 percent of Lehman's equity, according to the filing. Clearbridge Advisers LLC, the asset manager that Baltimore-based Legg Mason Inc. acquired from Citigroup Inc. in 2005, held 6.33 percent, according to the filing. Boston-based FMR LLC, the parent of Fidelity, the world's largest mutual fund company, held 5.9 percent, the filing said.




Wall Street Journal
Several Japanese Banks Are Top Lenders to Lehman
By YUKA HAYASHI
September 15, 2008 11:29 a.m.

TOKYO -- Several Japanese banks -- flush with cash and relatively unscathed by the global credit crisis -- are among the top bank lenders to Lehman Brothers Holding Inc., which filed for bankruptcy protection on Monday with $613 billion in debt.

Aozora Bank, a mid-sized Tokyo bank, was No.1 on the list of largest bank lenders with a loan of $463 million, followed by Mizuho Corporate Bank, with a $289 million loan, according to court documents submitted with Lehman's Chapter 11 bankruptcy filing. Mizuho Corporate Bank is the wholesale banking unit of Mizuho Financial Group, Japan's third-largest bank by market value. Other big Japanese lenders to Lehman included Shinsei Bank, another mid-sized Tokyo bank, and Mitsubishi UFJ Financial Group, Japan's largest bank.

For big Japanese banks like Mitsubishi UFJ and Mizuho, which have huge balance sheets, the loan losses related to Lehman may appear modest.

But smaller banks like Aozora and Shinsei may have a tougher time absorbing the losses. The two banks have been turned around by private-equity investors after collapsing during Japan's bad-loan crisis. But their performance has been weak in recent quarters. Faced with powerful competition from Japan's giant banks, they have forayed deeper into riskier business areas.

On Friday, Aozora said it expects to swing to a net loss of four billion yen in the fiscal first half ending Sept. 30, compared with a previous forecast of a 15.5 billion yen profit, as it changed the timing of write-downs related to its investment in GMAC LLC, the unprofitable finance arm of General Motors Corp. Aozora invested in this business alongside Cerberus Capital Management, its largest investor.

The long list of Japanese names on the list of bank lenders underlines how these banks are playing an increasingly important role as providers of capital in the global financial market battered by a credit crunch. Unlike many of their U.S. and European peers that have been forced to scale back lending because of big losses related to risky mortgage securities, Japan's top banks like Mitsubishi UFJ and Sumitomo Mitsui Financial Group still enjoy healthy balance sheets and have been vying to expand their presence overseas recently. These banks have stayed shy of investing in risky securities, in part due to a lesson learned from their own bad-loan crisis during the 1990s and early 2000s.

The filing doesn't necessarily mean the loans extended by these banks would go sour. Lehman said it had $639 billion in assets, which will be liquidated and eventually distributed among creditors during the process of liquidation. Aside from billions of dollars in loans borrowed from banks, the Wall Street firm owes over $150 billion to bond holders, who tend to come behind bank lenders when collecting debts in bankruptcy cases.

Lehman Workers Clear Desks, Weep After Bankruptcy: Lehman Brothers Holdings Inc.'s employees worldwide are clearing their desks, waiting to hear if they'll be paid, and starting to look for work after the investment bank filed for the biggest bankruptcy in history.

Wake-Up Call: Lehman's Mortgage Marks: Anyone else holding large amounts of tainted mortgages has to worry. Lehman's potential unwinding, along with any aggressive actions by Merrill and AIG to offload mortgage assets, could mean widespread losses as other banks mark down their own holdings.

10 Banks Form $70B Fund to Stave Off Crash: Ten of the world's largest banks have formed a massive liquidity fund to mitigate the effects of the Lehman Brothers meltdown, reports the Financial Times. All the investment banks will be able to borrow up to a third of the $70 billion fund in order to reduce volatility and stay in business while Lehman is being wound down. They will also be able to borrow from the Fed under newly relaxed terms

S&P cuts BofA rating, may cut again, Moody's may cut: Moody's Investors Service also placed the bank on review for downgrade after it said it will purchase Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) for $50 billion.

China Cuts Rates as U.S. Turmoil Adds to Global Risks: China cut interest rates for the first time in six years and allowed most banks to set aside smaller reserves as worsening credit-market turmoil and weakening export demand dimmed the outlook for economic growth.

The next big bang is private equity: Wall Street is in crisis, undoubtedly the worst in history, as one tarnished giant after another topples. The real problem, though, is no one can tell where it will end.

Wilbur Ross: Possibly a Thousand Banks Will Close: In an exclusive interview with CNBC.com, Wilbur Ross, chairman and CEO of WL Ross & Co., says he sees possibly as many as a thousand bank closures in the coming months.

Industrial Production in U.S. Fell More Than Forecast: Industrial production in the U.S. fell in August by the most in almost three years as the slowdown in consumer spending prompted automakers to cut back.

http://www.cnbc.com/id/15840232?video=856915680


Whitney On Wall Street's Future

Welcome to the Depression

The Day After Market Reaction: Spike in Interbank Spreads, Repo Rates, CDS Spreads

• Eventful Sep 13/14 weekend: (BNP) First, Lehman Brothers Holdings announces that it files for Chapter 11 bankruptcy. Second, a bank consortium, including three banks in the US and 7 in EU, reveal plans to create a USD70bn fund to provide emergency liquidity. Third, the Fed on Sunday announces several initiatives to provide additional support to financial markets, which include broader collateral eligibility at the Primary Dealer Credit Facility (PDCF) and Term Securities Lending Facility (TSLF). Also, TSLF auctions will now take place weekly instead of every two weeks and the amounts offered will be increased from USD125bn to USD150bn. Fourth, Bank of America agrees to buy Merrill Lynch for USD50bn. While Merrill Lynch's market cap was USD26 on Friday, it would swap 0.8595 shares of its stock for each of Bank of America shares for a value of USD29 per share. Fifth, AIG asked the Fed for a USD40bn bridge loan, while it is trying to sell assets to raise more capital, as it rejected capital from a group of private-equity firms

Click Here For Full Analysis

AIG Allowed to Borrow $20 Billion From Subsidiaries?

• AIG has been given special permission to access $20 billion of capital in its subsidiaries to free up liquidity by the state of NY
• AIG rejects private equity injection but seeks $40bn bridge loan from Fed as it faces a potential downgrade from credit ratings agencies that could spell its doom

Click Here For Full Analysis

Bankruptcy Of A Major Counterparty: A Systemic Event in the OTC Derivatives Markets?

• Lehman is one of the major counterparties in the highly concentrated credit derivative swaps (CDS) market. A LEH bankruptcy filing requires an assignment of its dealbook to other counterparties. The ISDA has started a 'netting' process where any offsetting contracts are canceled out and where it is established if Lehman is a net debtor or net creditor when all contracts are marked to market (-->end result is a single net payment from or to Lehman's trustee.) Derivatives contracts enjoy special seniority rights ('close-out' see Bliss/Kaufman): their claims are not 'stayed' in a bankruptcy as is the case for other creditors. In either Chapter 7 or 11, derivatives counterparties seize and liquidate positions and collateral immediately which could lead to potential asset market disruptions--> Authorities announce expanded emergency liquidity plans

Click Here For Full Analysis

Economic Crisis

A Crash Course in Economic Crashes

Larry Beinhart, AlterNet

Corporate Accountability and WorkPlace: Each week, sometimes daily now, we slide by a new economic warning sign, by another wreck that's already off the road.


Big Banks Go Bust: America's Financial System in Crisis

The Nation and Campaign for America's Future

Corporate Accountability and WorkPlace: Authors Bill Greider and Dean Baker argue that the latest Wall Street woes expose the finance industry's deep need for reform.

IMF grows bold on Tajikistan's billions
The International Monetary Fund has ordered an independent audit of Tajikistan Aluminium Company, the country's leading enterprise that is run by President Emomali Rahmon. That might crimp funds going into the pockets of lawyers in the world's most expensive legal action. - John Helmer

THE BEAR'S LAIR
Fed's misplaced fulcrum
The pathological US attitudes to borrowing expose the Federal Reserve as the true culprit behind the present and coming financial troubles. Absent a chairman since Paul Volcker with the requisite moral courage, the Fed's statutes must be revised to force his future all-too slippery successors to pursue Volckerian policies.- Martin Hutchinson

Dust off the Chicago Plan
An easily implementable plan drawn up in the wake of the Great Depression had the potential to contribute to lasting financial stability and would have precluded the high leverage and monetization of credit instruments that have helped create the present crisis. It is time to dust off the Chicago Plan, and this time act on it. - Hossein Askari and Noureddine Krichene

Roller-coaster rupee
roils Indian markets
India's currency, which strengthened about 12% last year, is suddenly reversing those gains, confounding exporters and importers alike and helping to drag down share prices. - Raja Murthy

Spooky stats from the US Mint
The riddle of missing US gold and silver has several possible answers, some horribly ugly, such as: "It's all gone." With measures of gold prices at dirt-bottom levels, that is not such bad news at it appears.
CREDIT BUBBLE BULLETIN
Too big to suffer a loss
Perhaps the US Treasury and the administration will stick to their word and not provide taxpayer funds to save Lehman and others. Yet why is there the feeling that the next step of government intervention will be to bolster the "repo" market? (Sep 15, '08)
Doug Noland looks at the previous week's events each Monday.
THE WEEK AHEAD

MARKET RAP
A respite, but no reprieve
The ongoing declines in Asian markets showed a small lull, and some reversal, with Seoul making phenomenal gains and New Zealand also performing well. But the region is by no means out of the woods, with Chinese exchanges plunging to their lowest levels in months. (Sep 12,

• Wall Street Fallout
  • A Brave Decision on Lehman
  • The Japan Lesson: US Must Own Up
  • Who Does The Market Help in '08
  • More at RealClearMarkets

AIG falls 42% in cash scramble: Shares were down 42% in early morning trading, after falling more than 70% in early morning trading and losing 61% of their value the day before.

Wall Street’s Next Big Problem: There is a bigger potential failure lurking: the American International Group, the insurance giant. It poses a much larger threat to the financial system than Lehman Brothers ever did because it plays an integral role in several key markets: credit derivatives, mortgages, corporate loans and hedge funds.

WaMu lowered to junk by S&P: Already battered, Washington Mutual shares fall 27% as potential capital sources' attention is diverted.: Washington Mutual had its credit rating lowered to junk Monday by Standard & Poors amid continuing weakness in the housing market.

Analysts see rate cut by U.S. Fed Look for the U.S. Federal Reserve to cut interest rates by one-quarter of a percentage point Tuesday as Washington grapples with the growing financial crisis on Wall Street, economists say.

Goldman Sachs net plunges 70 percent: Goldman Sachs Group Inc (GS.N) said third-quarter earnings plunged 70 percent as one of the market's worst slumps ever sapped revenue in almost every business while fueling investment and credit losses.

NY gov sees Wall St losing up to 40,000 jobs: New York Gov. David Paterson on Monday said Wall Street might lay off 40,000 workers in a worst-case scenario following Lehman Brother's bankruptcy filing and problems at other big financial firms.

HP to cut 24,600 jobs as part of EDS integration: Hewlett-Packard Co. said Monday it plans to slash 24,600 jobs over the next three years, nearly 8 percent of its work force, as it combines operations with Electronic Data Systems Corp., the technology-services company it recently acquired.

Calif. unemployment fund running out of money: As California's unemployment rate hits a 12-year high, the state program that pays benefits to the jobless is facing a severe money shortage and a huge backlog of unresolved appeals.

Common plastics chemical linked to human diseases: A study has for the first time linked a common chemical used in everyday products such as plastic drink containers and baby bottles to health problems, specifically heart disease and diabetes.

EM Equities Selloff Amid U.S. Financial Meltdown

• The MSCI Emerging Markets Index fell 5.4% to 780.79 midday Sept 16, with every EM equity market except Indonesia falling as higher borrowing costs, credit losses, led investors to shun risky assets. The MSCI EM index has fallen 34% ytd (S&P lost 19%) and on average emerging market equities have returned to 2006 levels. Russia's RTS fell 17%, markets in Asia about 5% with banks exposed to Lehman the hardest hit

Click Here For Full Analysis

Asian Central Banks Step into Money Markets to Contain Liquidity shocks from U.S. Credit Turmoil

• Japan, Australia injecting liquidity into banking system to help banks who suffered credit losses due to exposure to Lehman via hedges, collateral; and use open market operations to contain declining bond yields and stock prices and stabilize financial market volatility
• Bank of Korea contemplating providing foreign currency liquidity as $1.44 bn exposure of South Korean banks to Lehman and Merrill Lynch has raised investor risk aversion and futures prices, leading to temporary suspension selling orders on the Kospi index
• Sep 16: Bank of Japan injected $24bn cash as Japanese banks' approx. $1.53 bn exposure to Lehman led to spike in govt bond futures, stock price decline leading to short halt in stock trading; Reserve Bank of Australia added another $1.5 bn; Taiwan injected $3.59 bn into the foreign-currency interbank market and govt instructed 4 major funds and state-owned banks to buy shares after stock market fell to 3-yr low on Sep 15 due to $2.5 bn exposure of banks to Lehman
• Sep 15: Reserve Bank of Australia added $1.7 bn through repurchase agreements

Click Here For Full Analysis

Japanese Banks Among Major Lehman Unsecured Lenders: How Much Will Creditors Lose?

• Lehman listed $613bn of debt and $639bn of assets in Chapter 11 petition. Subordinated debt and preferred shareholders may be wiped out. Senior bondholders and CDS protection buyers might only recover 30 cents on the dollar
• Japanese banks have large unsecured loan exposures: Aozora had extended loans worth $463m to Lehman as of July 2. Other Japanese banks named in the Lehman filing included Mizuho with $382m in exposure, Shinsei Bank with $231m, UFJ Bank with $185m, Sumitomo Mitsui Banking Corp with $177m and Chuo Mitsui Trust & Banking with $93m in loans

Click Here For Full Analysis

Fed Interest Rate Path 2008: Rates Unchanged Despite Financial Turmoil

• Sep 16 FOMC: Rates on hold at 2% target Fed Funds Rate, 2.25% Discount Rate. Decision was unanimous. Strains in financial markets have increased significantly and labor markets have weakened further. Inflation outlook remains highly uncertain. Downside risks to growth and the upside risks to inflation are both of significant concern to the Committee

Click Here For Full Analysis

AIG Downgrade: Will The Fed Intervene?

• Sep. 16: The U.S. government is considering intervening to rescue AIG, as private solutions continue to run out
• WSJ: AIG was facing a severe cash crunch on Sep 15 as ratings agencies cut the firm's credit ratings, forcing the giant insurer to raise $14.5 bn to cover its obligations--> people close to the situation said that if the insurer doesn't secure fresh funding by Wednesday Sep 17, it may have no choice but to opt for a bankruptcy-court filing

Click Here For Full Analysis

Government steps in again, bails out AIG with $85B- APAnother day, another bailout. 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.

• Fed's no-change decision could be followed by cuts- AP
• Lehman unloads it banking divisions to Barclays- AP
• Asian markets partly recover on AIG rescue plan- AP
• $85B AIG Bailout: Fed Stands Pat on Rates But Isn't Standing Still- Tech Ticker

» View more top stories

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In a dramatic turn of events, the Federal Reserve Board extended a $85bn secured credit line at LIBOR+850bp to AIG, the biggest insurer in the world, in exchange for a 79.9 percent stake in the company. As Lehman, AIG is a large player in the off-balance sheet credit derivatives and structured finance market, but with much stronger ties to the real economy, to consumers, to pension funds, mutual funds, to municipalities in its quality as bond guarantor, not to mention its international interlinkages in over 100 countries worldwide. “The Federal Reserve Board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth, and materially weaker economic performance.”



Lehman’s demise over the September 13/14 weekend, on the other hand, did not come as a complete surprise. Treasury Secretary Paulson stuck to his word given at the July 10 full committee hearing where he clearly stated that – after receiving extraordinary access to Fed liquidity – “the trigger for invoking government's emergency authorities should be very high, such as filing for bankruptcy.”



The big unknown is whether Lehman’s unsecured creditors and bondholders will be able to weather their losses – current indicators set the likely recovery value for Lehman’s bonds at 30 cents on the dollar. The second question is whether the financial system will bring up the funds or the guarantees to compensate for the disappearance of one of the top ten counterparties in the highly concentrated $62 trillion OTC credit derivatives (CDS) market. The remaining peer banks were proactive in establishing a $70bn liquidity pool for this purpose. Furthermore, still unresolved is the fate of large amounts of off-balance sheet toxic waste that will keep weighing on banks’ balance sheets barring a holistic approach. See some solution outlines in: “Lessons From Past Banking Crises: How To Avoid a Japan-Like Experience”



The authorities’ immediate response was to widen the volume of and the collateral base for its lender of last resort facilities to include “collateral that can be pledged in the tri-party repo systems of the two major clearing banks.” This can basically include anything the parties agree on, including equities. Could central banks suffer any collateral damages in the long run? See: “Lending Against Shaky Structured Collateral: Can Central Banks Go Broke?”



Whether these precautionary measures prevent ripple effects from occurring remains to be seen. We are now closer to a financial meltdown as described in Nouriel Roubini’s February paper “12 Steps to a Financial Disaster”. Stock prices are sharply down and there is a risk of a market crack. Interbank spreads and credit spreads are wider than ever since the beginning of this crisis. Lehman and Merrill are gone and the fear is that soon enough Morgan Stanley and Goldman Sachs might also need to find a larger partner with deep pockets.



Moreover, the biggest U.S. S&L – WaMu – might be close to a bust. Dozens of other banks could be near bankruptcy and the beginning of a silent bank run is looming as depositors are nervous about their assets. Indeed, panic is mounting in financial markets: the CDS market is frozen because of the collapse of Lehman and fears of the collapse of AIG, WaMu and other financial institutions. At the same time, many hedge funds are now teetering as their losses are mounting. Investors in fixed income – including preferred stocks – have also experienced massive losses. Importantly, as a sign that the Fed lost control of the Fed Funds rate, overnight LIBOR spiked over 300bps to over 6% as panicky investors sought the safety of cash.



In the first fully unified vote since last September, FOMC voted to leave the Fed Funds Rate and Discount Rate unchanged. While according to the FOMC “the inflation outlook remains uncertain”, “strains in financial markets have increased significantly and labor markets have weakened further” and after the events of the past weekend – with government rescues apparently off the table, the possibility of a rate cut came back to the table – even intermeeting if needed – although rate cuts in this environment might have a limited effect.



The fallout of the financial turmoil in the U.S. is becoming global with stock markets all over the world plunging. The effects of contagion are being felt in Russia, China, Emerging Asia, Emerging Europe and in the European banking sector. Equities in Russia, India and Brazil – three of the BRICs – fell sharply. Commodity countries, such as Russia and Brazil, and those with high external financing needs, such as Turkey, came under particular pressure. The MSCI emerging-markets index has lost a quarter of its value over the last three months and outflows from emerging equity and bond fund reached levels not seen for more than a decade while emerging-market currencies have taken a battering over the last week or so as risk aversion rose.





Also in the Monitor:

• TIC Data and the U.S. Deficit: Foreigners Fleeing Agencies
• The Fallout Continues: Money Market Rates Double
• Asian Central Banks Step into Money Markets to Contain Liquidity Shocks From U.S. Credit Turmoil

Statement of the Shadow Financial Regulatory Committee on The Regulation of Investment Banking by Charles Calomiris and Robert E. Litan Sep 17, 2008

Impact of the Credit Crisis on Money Market Funds: Reserve Primary Fund 'Breaks the Buck'Sep 17, 2008

• Reserve Primary Fund drops below $1 a share amid Lehman fall --> first fund after decades to "break the buck" (Reuters)
• Money market funds are beginning to re-enter the conduit/structured products market for asset backed commercial paper. Yields on 30 day maturity transactions have narrowed by as much as 15bp over the last month alone. However, the resurgence is particular to investment banks that are considered to be large and stable by market participants, like HSBC and JPMorgan and to transactions that are not over 30 days (Securitization.net)
• Many money market fund managers have objected to an SEC proposal that would have them act in the role of rating agencies for the securities that they invest in (WSJ)
• In a repeat of what occurred in the summer of 2007, money markets are again beginning to seize up. "The gears of capitalism are grinding to a halt" as one bond fund manager put it. Investment banks, which issued short term securities when the rates were at historic lows, will now find themselves refinancing at much more onerous spreads, as money market funds retrench towards safer investments (Paulden)
• The impact on MMFs (Money Market Funds) from the credit crisis has been two fold. Firstly, the overall size of funds under management has increased by over 35 % in the last year to $3.5 trillion (ICI.org). Secondly, those MMFs that invested in SIVs, ABCPs and other complex, but supposedly 'safe' derivatives, have paid a steep price
• Economist: As of the end of 2007, MMFs manage more than 30% of corporate Americas' short term assets.
• FinancialWeek: The steep inflow of capital, and the coming maturation of longer term debt have left MMFs with relatively low rates of return. As they all try to invest in the same type of products (eg Treasuries, Agencies, CDs and so on), the yield on those securities decreases substantially.
• NYTimes: MMFs managed by Bank of America, Wachovia, Sun Trust, Credit Suisse and others have needed capital infusions, in order not to fall below the level of underlying assets under management. To date, more than $10 billion has been allocated to cover the losses
• FT: Inspite of experiencing such turbulance and losses, some MMFs are beginning to contemplate and increase their exposure to similar types of derivatives that caused those losses.

Associated Readings (12 Articles)

Economic Turmoil

[b]STOCK JITS...
Government steps in again, bails out AIG with $85B...
Text...
Three-Month Bill Rates Plunge to Lowest Level Since 1950s...
Russia's Markets Halted for Second Day; Emergency Funds Fail to Stem Rout...
Russia threatens to seize swath of Arctic...

[/b] [b]FEDERAL BANK INSURANCE FUND DWINDLING [/b]

Waiter, there's a banker in my soup

The Fed's timely courage at avoiding a Lehman bailout and pushing through an AIG takeover, allied with a decision to hold interest rates steady, may yet be seen as the steps that helped to stem the US's financial crisis. It certainly doesn't feel like a turning point, but that is the way emotions differ from fundamentals. (Sep 17, '08)

China's imploding US ally
AIG, one of the few US companies to be founded in China, grew there under the pathfinding leadership of Maurice R Greenberg, who came to be a key player in developing personal and political ties between the two countries. Now Greenberg looks on from the sidelines and scared Chinese AIG customers dump their personal policies. - Richard Komaiko and Chris Stewart (Sep 17, '08)

Ben first, economy last
United States Federal Reserve chairman Ben Bernanke's decision to hold interest rates steady helped him re-establish control over the Fed board. But if the choice was between the health of the US economy and the restoration of his authority, it seems the economy received the nasty end of the stick. - Julian Delasantellis (Sep 17, '08)

Crisis curdles China's booming dairy market
The biggest names in China's newly born dairy sector are reeling from a national crisis over chemically tainted baby milk that has left three infants dead and thousands hospitalized. One of the US$19 billion sector's biggest players, the partially New Zealand-owned Sanlu Group, is scrambling to recall products and fend off allegations that it covered up the scandal for months. - Kent Ewing

THE MOGAMBO GURU
Bottom of
the class
The stunning ignorance and blithe insouciance of the world's media minions regarding the hard facts of the financial crisis are a cause for deep shame. Only one fact has to be understood. There is No Freaking Way (NFW) that gold and silver will not shoot to the stars as the dollar collapses.
FROM OUR ARCHIVE
Rocking the subprime
house of cards - Julian Delasantellis, March 6, 2007
"This kind of cascading financial catastrophe is often called a 'contagion', and with good reason. Like a virus, it can spread and bankrupt the entire financial system."

CREDIT BUBBLE BULLETIN
Too big to suffer a loss
Perhaps the US Treasury and the administration will stick to their word and not provide taxpayer funds to save Lehman and others. Yet why is there the feeling that the next step of government intervention will be to bolster the "repo" market? (Sep 15, '08)
Doug Noland looks at the previous week's events each Monday.

Money-Market Rates Double Amid Global Credit Seizure
South Korea turns tables on Wall Street after bailout
Fed's price: AIG must shrink
This Is the Day Asian Capital Woke Up
AIG struggles to survive financial tsunami
Who's next after Lehman?
Wall Street Upheaval May Sap Economy, Spur Rate Cut

U.S. Builders Began Work in August on Fewer Homes Than Economists Forecast

• Bloomberg
• 09/17/2008 08:11 AM

Lending Among Banks Freezes

• WSJ ($)
• 09/17/2008 05:57 AM

Fed’s $85 Billion Loan Rescues Insurer

• NY Times
• 09/17/2008 04:55 AM

Fed Takes Control of AIG With $85 Billion Bailout

• Bloomberg
• 09/17/2008 04:45 AM

U.S. Looks Likely to Drive Into Recession

• WSJ ($)
• 09/16/2008 09:53 PM

Fed Close to Deal to Give A.I.G. $85 Billion Loan

• NY Times
• 09/16/2008 06:39 PM

Ben first, economy last
Asia Times Online - Kowloon,Hong Kong
Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing ...
See all stories on this topic



Focus News Great Depression again?
Focus News - Sofia,Bulgaria
It was the largest and most important economic depression in world history, and is used in the 21st century as a benchmark on how far a modern economy could ...
See all stories on this topic


There's no case for a new Keynesian era
National Post - Toronto,Ontario,Canada
In the grand sweep of history, according to Lord Skidelsky, the Great Depression unleashed a 40-year Keynesian wave of liberalism. ...
See all stories on this topic


The Big Question: What was Roosevelt's New Deal, and is something ...
Independent - London,England,UK
Conceivably, the present turmoil could result in a second Great Depression. But although history and economic crises past provide lessons we ignore at our ...
See all stories on this topic


Fight for the high ground on markets
The Australian - Sydney,Australia
... the Great Depression," he said. "I certainly don't fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to. ...
See all stories on this topic


Depressionary Tales
Seeking Alpha - New York,NY,USA
... created to destroy America's free enterprise system and our economic stability. – Jerry Falwell I am a student, not an expert of the Great Depression. ...
See all stories on this topic


Obama Advisor Shares Candidate's Economic Plan
NPR - USA
Barack Obama has described the latest drama on Wall Street as "the worst financial crisis since the Depression." For more on what Obama plans to do to fix ...
See all stories on this topic


Bear market threatens to scare Canadians out of spending
The Canadian Press - TORONTO
The Great Depression saw unemployment jump to 20 per cent in many parts of the country and led to widespread social and economic misery before the North ...
See all stories on this topic


Dems Pushing Conflicting Messages on McCain
ABC News - USA
"There is no reason to think we are headed into an economic depression," Reid said. "There is no reason to panic. Yet one Senator -- John McCain -- woke up ...