BILL SCHER
Paulson Feeling The Pressure, Time To Demand "Common Sense" Treasury Secretary Henry Paulson's testimony today shows signs that the growing the public backlash against a $700 billion blank check to Wall Street is being heard. But beware of the political game of highball, in which you propose something you know is outrageous so that when you give up a little, it is perceived as some great concession for glorious compromise. We must not be pawns in such a game. We must have a set of common-sense principles to guide any legislation and the overall debate.
PETITION: A letter-writing campaign is underway today to ask Congress to reject giving a $700 billion blank check to Wall Street. Click here to participate in this emergency campaign.
Full Version: Economic and Financial News
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THOMAS FERGUSON & ROBERT JOHNSON
[color="#003333"]Bridge Loan to Nowhere thenation.com — There is more than one way to restore trust and restart markets. Alas, not only is the plan Paulson and Bernanke are pushing the most expensive and likely to soak average Americans the most, but it is also the most likely to fail.
PAUL KRUGMAN
Cash for Trash iht.com — Paulson insists that he wants a "clean" plan. "Clean," in this context, means a taxpayer-financed bailout with no strings attached - no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Paulson is also demanding dictatorial authority, plus immunity from review "by any court of law or any administrative agency," and this adds up to an unacceptable proposal.
KATRINA VANDEN HEUVEL
Give Main Street a Fair Shake thenation.com — This bailout should be seized as an opportunity to start addressing the real economic crisis — the one on Main Street — where the struggle to make ends meet is increasingly more dire in an economy marked by job losses, crumbling infrastructure, the lowest levels of personal savings since the 1920s, Gilded Age inequality and the highest level of foreclosed homes since the Great Depression.
PAUL WILMOTT
For Wall Street, Greed Was Not Good Enough nyt.com — As long as people are compensated hugely for taking risks with other people's money, and do not suffer equally on the downside, then those risks will inevitably become outrageous. If there's a way for someone to make money at another's expense, he will. In spades. So where next? And, most important, what should be done? To get to the root of the matter, we have to address the bad side of greed. We know from Ivan Boesky and Gordon Gecko that greed can be good. Greed makes the world go around; it makes people take risks that ultimately lead to economic or scientific advances. But the greedy must also face the consequences of taking those risks.
ROBERT H. DUGGER
A Prescription for Recovery washingtonpost.com — If Congress commits money without firm principles to guide its use, the cost to taxpayers will be far higher and the economy will remain weaker longer. Here are five principles Congress needs to impose now.
MARIE COCCO
Socialism for Dummies truthdig.com — So this is how the "ownership society" works. We own all the bad stuff. What we will own are potentially worthless assets for which there are currently no private buyers. After more than three decades of being told we can't afford to keep a modest safety net beneath the people on Main Street, we have thrown the mother of all lifelines to Wall Street. This is the conservative dogma that has constrained our politics for a generation.
EUGENE ROBINSON
So Much for the 'Masters of the Universe' truthdig.com — The über-capitalists of Wall Street are all socialists now. Free-market ideology, it turns out, doesn't pay the mortgage. That appears to be a job for, ahem, Big Government.
THOMAS FERGUSON & ROBERT JOHNSON
[color="#003333"]Bridge Loan to Nowhere thenation.com — There is more than one way to restore trust and restart markets. Alas, not only is the plan Paulson and Bernanke are pushing the most expensive and likely to soak average Americans the most, but it is also the most likely to fail.
PAUL KRUGMAN
Cash for Trash iht.com — Paulson insists that he wants a "clean" plan. "Clean," in this context, means a taxpayer-financed bailout with no strings attached - no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Paulson is also demanding dictatorial authority, plus immunity from review "by any court of law or any administrative agency," and this adds up to an unacceptable proposal.
KATRINA VANDEN HEUVEL
Give Main Street a Fair Shake thenation.com — This bailout should be seized as an opportunity to start addressing the real economic crisis — the one on Main Street — where the struggle to make ends meet is increasingly more dire in an economy marked by job losses, crumbling infrastructure, the lowest levels of personal savings since the 1920s, Gilded Age inequality and the highest level of foreclosed homes since the Great Depression.
PAUL WILMOTT
For Wall Street, Greed Was Not Good Enough nyt.com — As long as people are compensated hugely for taking risks with other people's money, and do not suffer equally on the downside, then those risks will inevitably become outrageous. If there's a way for someone to make money at another's expense, he will. In spades. So where next? And, most important, what should be done? To get to the root of the matter, we have to address the bad side of greed. We know from Ivan Boesky and Gordon Gecko that greed can be good. Greed makes the world go around; it makes people take risks that ultimately lead to economic or scientific advances. But the greedy must also face the consequences of taking those risks.
ROBERT H. DUGGER
A Prescription for Recovery washingtonpost.com — If Congress commits money without firm principles to guide its use, the cost to taxpayers will be far higher and the economy will remain weaker longer. Here are five principles Congress needs to impose now.
MARIE COCCO
Socialism for Dummies truthdig.com — So this is how the "ownership society" works. We own all the bad stuff. What we will own are potentially worthless assets for which there are currently no private buyers. After more than three decades of being told we can't afford to keep a modest safety net beneath the people on Main Street, we have thrown the mother of all lifelines to Wall Street. This is the conservative dogma that has constrained our politics for a generation.
EUGENE ROBINSON
So Much for the 'Masters of the Universe' truthdig.com — The über-capitalists of Wall Street are all socialists now. Free-market ideology, it turns out, doesn't pay the mortgage. That appears to be a job for, ahem, Big Government.
ISAIAH J. POOLE
Common Sense On The Bailout Damon Silvers, AFL-CIO general counsel and financial industry expert, explains why Congress should "tear up" the Bush administration's "blank check" proposal for a $700 billion bailout and replace it with legislation that includes accountability and a bailout for Main Street as well. ERIC LOTKE
Building Our Way Out The economy is sinking. Wages are flat, costs are rising and bridges are collapsing. Wall Street doesn't know which way is up. The answer is right before us. Bridges and dams and schools. America needs rebuilding. And the American people need jobs. Put one and one together.
Common Sense On The Bailout Damon Silvers, AFL-CIO general counsel and financial industry expert, explains why Congress should "tear up" the Bush administration's "blank check" proposal for a $700 billion bailout and replace it with legislation that includes accountability and a bailout for Main Street as well.
ERIC LOTKE Building Our Way Out The economy is sinking. Wages are flat, costs are rising and bridges are collapsing. Wall Street doesn't know which way is up. The answer is right before us. Bridges and dams and schools. America needs rebuilding. And the American people need jobs. Put one and one together.
BLOOMBERG NEWS: Paulson Plan To Mostly Benefit His Old Cronies at Goldman Sachs You can't make this stuff up.
Three Lehman Closed-End Funds To Redeem Auction Preferreds
CNNMoney.com - USA
Since then, one especially vulnerable set of investors has been those who bought billions of dollars of auction-rate securities from Lehman and Neuberger ...
How Much is the SEC's Cox to Blame?
TIME - USA
The agency, by most accounts, could have taken a more active role in going after firms that misleadingly sold long-term auction-rate securities as cash-like ...
Behind Sallie Krawcheck’s exit from Citi
CNNMoney.com - USA
Citi’s multi-billion-dollar auction-rate securities settlement, announced in August, caused a rift in her relationship with Pandit, who according to one ...
McCain says he would appoint AG Cuomo to head SEC
Legal News Line - Washington,DC,USA
Banks, including Bank of America, have been accused of illegally misrepresenting to clients the risks of investing in auction-rate securities for which the ...
Cox 'asleep at switch' as Paulson, Bernanke encroach
Business Standard - Mumbai,Maharashtra,India
“A lot of investors are looking at the SEC and saying, ‘Where were you with respect to auction-rate securities? And where were you with the securitisation ...
See all stories on this topic
CNNMoney.com - USA
Since then, one especially vulnerable set of investors has been those who bought billions of dollars of auction-rate securities from Lehman and Neuberger ...
How Much is the SEC's Cox to Blame?
TIME - USA
The agency, by most accounts, could have taken a more active role in going after firms that misleadingly sold long-term auction-rate securities as cash-like ...
Behind Sallie Krawcheck’s exit from Citi
CNNMoney.com - USA
Citi’s multi-billion-dollar auction-rate securities settlement, announced in August, caused a rift in her relationship with Pandit, who according to one ...
McCain says he would appoint AG Cuomo to head SEC
Legal News Line - Washington,DC,USA
Banks, including Bank of America, have been accused of illegally misrepresenting to clients the risks of investing in auction-rate securities for which the ...
Cox 'asleep at switch' as Paulson, Bernanke encroach
Business Standard - Mumbai,Maharashtra,India
“A lot of investors are looking at the SEC and saying, ‘Where were you with respect to auction-rate securities? And where were you with the securitisation ...
See all stories on this topic
Stocks Mixed as Street Weighs Bailout Plan- APFinancial markets fluctuated Tuesday as investors worried that lawmakers were losing the sense of urgency seen last week, when the government proposed a massive bailout for financial institutions as a way to revive ailing credit markets.
- Bernanke: Recession More Likely Without Bailout- AP
- FDIC chief wants home loans part of bailout plan- AP
- Oil prices fall on profit-taking after huge rally- AP
- GIC has large cash pile, sees opportunities in US- Reuters
- Home prices fell 5.3 pct in July, gov't says- AP
- Tomato processing, egg products industries probed- AP
- AIG suspends quarterly dividend- AP
- All Things Digital’s Mossberg: First Impressions of Google G1- All Things Digital
- Bailout on Trial: What Does Taxpayer Get Other than a $700B Bill?- Tech Ticker
<h4 class="subhead">BAILOUT BATTLE UPDATES: Capitol Hill Hearing... Paulson: "It's Embarrassing"... GOP Lawmakers Rail Against Bailout... "Financial Socialism"... "No Credible Assurances That This Plan Will Work"... Stocks Fall...
HuffPost BigNews Pages: Hank Paulson... Ben Bernanke... Wall Street Crisis</h4>
HuffPost BigNews Pages: Hank Paulson... Ben Bernanke... Wall Street Crisis</h4>
Stocks Fall as Street Weighs Bailout Plan- APFinancial markets resumed their pullback Tuesday as investors worried that lawmakers were losing the sense of urgency seen last week, when the government proposed a massive bailout for financial institutions as a way to revive ailing credit markets.
- Bernanke: Recession More Likely Without Bailout- AP
- FDIC chief wants home loans part of bailout plan- AP
- Oil prices fall on profit-taking after huge rally- AP
- GIC has large cash pile, sees opportunities in US- Reuters
- Home prices fell 5.3 pct in July, gov't says- AP
- Tomato processing, egg products industries probed- AP
- AIG suspends quarterly dividend- AP
- All Things Digital’s Mossberg: First Impressions of Google G1- All Things Digital
- Bailout on Trial: What Does Taxpayer Get Other than a $700B Bill?- Tech Ticker
Senators Voice Anger at Paulson and Bernanke
By MARK LANDLER and STEVEN LEE MYERS 31 minutes ago The Federal Reserve chairman and the Treasury secretary got a skeptical reception to their calls to enact the financial rescue plan quickly.
- Prepared Testimony: Henry M. Paulson Jr. | Ben S. Bernanke
- The Lede: Updates on Hearing
Ruby Washington/The New York Times At U.N., Bush Reassures Leaders on Economy
By STEVEN LEE MYERS and GRAHAM BOWLEY 3:56 PM ET The president expressed confidence that Congress would agree on a plan “in the urgent time-frame required.”
Paulson, Bernanke Urge Swift Action
Paulson and Bernanke told lawmakers that immediate action on a Treasury plan to buy illiquid mortgage-linked securities is necessary to avoid severe spillover effects on the economy.
<h2 class="post-title"> Credit Markets Continue to Show Distress</h2> Posted by David Gaffen Markets have taken a turn for the worse, particularly in the credit markets, where new evidence of the cash-hoarding by financial institutions surfaced.
Be it the increasing skepticism that has manifested in the Congressional hearings currently taking place, or individual actors in the markets worrying about the action taking place, but stocks have dropped this afternoon, short-term bond yields are lower, and corporate bonds have sagged.
The yield on the three-month bill has dropped Tuesday.
The Federal Reserve released results of Monday’s Term Auction Facility, where investors borrowed $75 million for 28 days, but the stop-out rate — the rate of interest the institutions have to pay at maturity — came in at a surprising 3.76%, or 0.57 percentage point over three-month LIBOR, the widest margin between the two since the TAF auctions began late in 2007.
The 3.76% figure is closer in spread to the so-called New York Funding Rate, an alternative version of LIBOR introduced earlier this year by the brokerage ICAP. That rate was 3.73% Monday, and the closeness of the TAF rate to this rate suggests that borrowing costs are even higher than LIBOR suggests.
“It shows there’s a lot of cash hoarding on the bank side — there are concerns over reserves and having cash readily available,” says George Goncalves, bond strategist at Morgan Stanley. LIBOR is “not accurately reflecting where borrowing costs are taking place.”
The yield on the one-month Treasury bill is lower, falling to 0.2%, and the three-month bill yields 0.82%.
The Senate Committee questioning Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke questioned why the Treasury needs a $700 billion outlay for this bailout, rather than a smaller sum for a shorter period of time, at least initially. “As the hearing drags on I’m getting less of a sense that the bailout will go through and I think the market is beginning to feel that way, too,” writes Charles Payne, founder of Wall Street Strategies, in midday commentary.
Meanwhile, credit markets have become increasingly tumultuous. Shares of corporate bonds, hybrid securities and preferred stock have lost value due in part to redemptions experienced by hedge funds, many of which end their fiscal year at the end of this month.
Permalink | Trackback URL: http://blogs.wsj.com/marketbeat/2008/09/23...ress/trackback/
Be it the increasing skepticism that has manifested in the Congressional hearings currently taking place, or individual actors in the markets worrying about the action taking place, but stocks have dropped this afternoon, short-term bond yields are lower, and corporate bonds have sagged.
The yield on the three-month bill has dropped Tuesday.
The Federal Reserve released results of Monday’s Term Auction Facility, where investors borrowed $75 million for 28 days, but the stop-out rate — the rate of interest the institutions have to pay at maturity — came in at a surprising 3.76%, or 0.57 percentage point over three-month LIBOR, the widest margin between the two since the TAF auctions began late in 2007.
The 3.76% figure is closer in spread to the so-called New York Funding Rate, an alternative version of LIBOR introduced earlier this year by the brokerage ICAP. That rate was 3.73% Monday, and the closeness of the TAF rate to this rate suggests that borrowing costs are even higher than LIBOR suggests.
“It shows there’s a lot of cash hoarding on the bank side — there are concerns over reserves and having cash readily available,” says George Goncalves, bond strategist at Morgan Stanley. LIBOR is “not accurately reflecting where borrowing costs are taking place.”
The yield on the one-month Treasury bill is lower, falling to 0.2%, and the three-month bill yields 0.82%.
The Senate Committee questioning Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke questioned why the Treasury needs a $700 billion outlay for this bailout, rather than a smaller sum for a shorter period of time, at least initially. “As the hearing drags on I’m getting less of a sense that the bailout will go through and I think the market is beginning to feel that way, too,” writes Charles Payne, founder of Wall Street Strategies, in midday commentary.
Meanwhile, credit markets have become increasingly tumultuous. Shares of corporate bonds, hybrid securities and preferred stock have lost value due in part to redemptions experienced by hedge funds, many of which end their fiscal year at the end of this month.
Permalink | Trackback URL: http://blogs.wsj.com/marketbeat/2008/09/23...ress/trackback/
Buffett's Berkshire betting $5 billion on Goldman- APOne of the world's shrewdest dealmakers is betting $5 billion of his investors' money that the U.S. financial system is not about to collapse.
Credit Swaps Must Be Regulated Now, SEC's Cox Says
- Bloomberg
- 09/23/2008 04:42 PM
- NY Times
- 09/23/2008 04:37 PM
- Bloomberg
- 09/23/2008 09:32 AM
- FT
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- WSJ ($)
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- FT ($)
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- WSJ ($)
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- WSJ ($)
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- Bloomberg
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- FT ($)
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- Washington Post
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Doubts grow about US plan U
- FT ($)
- 09/23/2008 09:56 PM
- Bloomberg
- 09/23/2008 04:36 PM
- Washington Post
- 09/23/2008 05:43 AM
- NY Times
- 09/23/2008 05:15 AM
- LA Times
- 09/23/2008 05:15 AM
- Bloomberg
- 09/23/2008 05:13 AM
- NM Biz Weekly
- 09/23/2008 04:50 PM
- Chicago Tribune
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- SF Gate
- 09/23/2008 05:51 AM
- USA Today
- 09/23/2008 05:50 AM
- Chicago Tribune
- 09/23/2008 05:22 AM
Stocks Fluctuate After Buffett-Goldman Deal- APFinancial markets gave mixed signals Wednesday, with stocks stabilizing following investor Warren Buffett's $5 billion bet on Goldman Sachs Group Inc. but the credit markets showing added strain as they await news about the government's plan to rescue banks from crippling debt.
- Buffett's Berkshire betting $5 billion on Goldman- AP
- Bernanke: Growth hinges on stabilizing markets- AP
- Existing home sales fell 2.2 percent in August- Reuters
- FBI investigating companies at heart of meltdown- AP
- Oil rises above $108 as investors eye US bailout- AP
- France's Edf announces $23B British Energy buyout plan- AP
- Fed plows $30 billion in money markets overseas- AP
- Yahoo clears path for AOL talks: report- Reuters
- Pickens funds down about $1 billion this year: report- Reuters
Progress Made Toward Bailout
U.S. News & World Report - Sep 23, 2008
Washingt... The Christian Science Monitor, Washington Times, New York Times and Los Angeles Times run similar stories. Stocks Plunge, Oil And Gold Spike ABC World News ... Government Debt Rescue a Boon for Gold! Money and Markets David Brooks thinks he sees a "new establishment" to run economic ... Salon PARALLEL UNIVERSE: Cash for Trash Federal Bailout Plan: When ... HNN Huntingtonnews.net
U.S. News & World Report - Sep 23, 2008
Washingt... The Christian Science Monitor, Washington Times, New York Times and Los Angeles Times run similar stories. Stocks Plunge, Oil And Gold Spike ABC World News ... Government Debt Rescue a Boon for Gold! Money and Markets David Brooks thinks he sees a "new establishment" to run economic ... Salon PARALLEL UNIVERSE: Cash for Trash Federal Bailout Plan: When ... HNN Huntingtonnews.net
Bailout Debate, McCain's Freddie Mac Ties, CVS Donor Access Washington Post -
Boston G... The Washington Post The Campaign Trail » The lobbying firm co-owned by John McCain's campaign manager, Rick Davis, has received payments from Freddie Mac in ... Rick Davis Busted Atlantic Online The biggest story of the campaign guardian.co.uk CNN contributor West misled on Raines' and Johnson's purported ... Media Matters for America
Boston G... The Washington Post The Campaign Trail » The lobbying firm co-owned by John McCain's campaign manager, Rick Davis, has received payments from Freddie Mac in ... Rick Davis Busted Atlantic Online The biggest story of the campaign guardian.co.uk CNN contributor West misled on Raines' and Johnson's purported ... Media Matters for America
Stocks Close Mixed After Buffett-Goldman Deal- APTension grew in the financial markets Wednesday, with stocks struggling for direction amid worries about the effectiveness of a still-emerging government plan to rescue banks from crippling debt. The credit markets also showed added strain.
- Buffett's Berkshire betting $5 billion on Goldman- AP
- Bailout: Accord on chiefs' pay, Bush on TV tonight- AP
- It's an Outrage! From Main St. to Congress, Bailout Proposal Falls Flat- Tech Ticker
- Jack Welch says U.S. faces "deep downturn"- Reuters
- Oil falls below $106 on weak US energy demand- AP
- Price of existing homes falls by record amount- Reuters
- Goldman's shares get suspicious boost pre-Buffett- Reuters
- Announcing Apple's 33 Percent-Off Sale!- Silicon Alley Insider
- The End of an Era for Wall Street and Washington, D.C.- Tech Ticker
How The U.S. Could Make Money Off the Bailout - Jon Birger, Fortune
Bailout Is About Saving Credit Flow, Not Banks - John Berry, Bloomberg
Paulson & Bernanke Didn't Make Their Case - Editorial, New York Times
Opening Pandora's Bailout - Holman Jenkins, Wall Street Journal
Do Not Abandon Inflation Targets - Frederic Mishkin, Financial Times
Global Glee at America's Financial Pain - Randall Forsyth, Barron's
Of Interventions & Conservative Principles - Don Luskin, National Review
Fearing Debt Like 1990s Japan - Jonathan Ford, Prospect Magazine
Bailout Is About Saving Credit Flow, Not Banks - John Berry, Bloomberg
Paulson & Bernanke Didn't Make Their Case - Editorial, New York Times
Opening Pandora's Bailout - Holman Jenkins, Wall Street Journal
Do Not Abandon Inflation Targets - Frederic Mishkin, Financial Times
Global Glee at America's Financial Pain - Randall Forsyth, Barron's
Of Interventions & Conservative Principles - Don Luskin, National Review
Fearing Debt Like 1990s Japan - Jonathan Ford, Prospect Magazine
Economic News
McCain suspends campaign: Candidates head to Washington
Obama sounds a populist tone on bailout: Blames Wall Street executives' 'greed and irresponsibility' for causing the financial crisis
The Economy: Key Signals Beyond the Bailout
US 'no longer economic superpower': Germany's finance minister
Presidential Politics
Road to 270 electoral votes: Obama leads, but 8 tossup states hold the keys to White House
Poll finds 18 percent of voters are up for grabs: Economy key issue
Shame on you too, Barack Obama: The Truth Sleuths
Iraq gunmen launch deadly ambush: At least 20 killed
Violence in Iraq down 80 percent - U.S. Defense Secretary Gates
Editorial
Absence of Leadership
President Bush’s address on Wednesday was another reminder of the absence of any real national leadership, including on the campaign trail.
September 25, 2008
Bush and Candidates to Meet on Bailout
By SHERYL GAY STOLBERG and DAVID M. HERSZENHORNPresident Bush invited the presidential candidates to the White House for talks on the economic crisis and called on Americans to support the recovery plan.
September 25, 2008 Op-Ed Columnist
Palin’s American Exception
By ROGER COHENSarah Palin loves the word “exceptional.” She may be onto something in her batty way: the election is very much about American exceptionalism.
September 25, 2008 News Analysis
For the Nominees, New Roles and New Risks
By MICHAEL COOPERSenators John McCain and Barack Obama became the leaders of their respective parties in an entirely new way on Wednesday.
September 25, 2008
Bring on the Rubber Chicken
By GAIL COLLINSPresident Bush’s explanation about how the rescue bill would unclog the lines of credit made the whole thing sound less important than a Liquid-Plumr commercial.
September 25, 2008
First Debate Up in Air as McCain Steps Off the Trail
By ELISABETH BUMILLER and JEFF ZELENYJohn McCain vowed to work on the bailout plan, but Barack Obama rejected his call to delay the debate.
September 25, 2008 The Ad Campaign
McCain and Social Security
By JULIE BOSMANThis 30-second advertisement for Senator Barack Obama, titled “Promise,” began running last week in battleground states across the country.
September 24, 2008
Wooing Clinton Backers for Obama’s Benefit
By MICHAEL LUOHassan Nemazee is hunting for hefty checks for a New York fund-raiser for Senator Barack Obama at an inauspicious time, from an exceedingly difficult population.
September 24, 2008
Pinpoint Attacks Focus on Obama
By JIM RUTENBERGA series of ads in Michigan highlights this year’s roughest political attacks: narrowly aimed shots from small groups.
September 24, 2008
Obama and McCain Stand Firm on Bailout
By ELISABETH BUMILLER and PATRICK HEALYSenator John McCain struck a more urgent tone on the need to act quickly on a bailout of financial firms, but he and Senator Barack Obama insisted on conditions that had to be met.
September 24, 2008
Absence of Leadership
President Bush’s address on Wednesday was another reminder of the absence of any real national leadership, including on the campaign trail.
September 25, 2008
Bush and Candidates to Meet on Bailout
By SHERYL GAY STOLBERG and DAVID M. HERSZENHORNPresident Bush invited the presidential candidates to the White House for talks on the economic crisis and called on Americans to support the recovery plan.
September 25, 2008 Op-Ed Columnist
Palin’s American Exception
By ROGER COHENSarah Palin loves the word “exceptional.” She may be onto something in her batty way: the election is very much about American exceptionalism.
September 25, 2008 News Analysis
For the Nominees, New Roles and New Risks
By MICHAEL COOPERSenators John McCain and Barack Obama became the leaders of their respective parties in an entirely new way on Wednesday.
September 25, 2008
Bring on the Rubber Chicken
By GAIL COLLINSPresident Bush’s explanation about how the rescue bill would unclog the lines of credit made the whole thing sound less important than a Liquid-Plumr commercial.
September 25, 2008
First Debate Up in Air as McCain Steps Off the Trail
By ELISABETH BUMILLER and JEFF ZELENYJohn McCain vowed to work on the bailout plan, but Barack Obama rejected his call to delay the debate.
September 25, 2008 The Ad Campaign
McCain and Social Security
By JULIE BOSMANThis 30-second advertisement for Senator Barack Obama, titled “Promise,” began running last week in battleground states across the country.
September 24, 2008
Wooing Clinton Backers for Obama’s Benefit
By MICHAEL LUOHassan Nemazee is hunting for hefty checks for a New York fund-raiser for Senator Barack Obama at an inauspicious time, from an exceedingly difficult population.
September 24, 2008
Pinpoint Attacks Focus on Obama
By JIM RUTENBERGA series of ads in Michigan highlights this year’s roughest political attacks: narrowly aimed shots from small groups.
September 24, 2008
Obama and McCain Stand Firm on Bailout
By ELISABETH BUMILLER and PATRICK HEALYSenator John McCain struck a more urgent tone on the need to act quickly on a bailout of financial firms, but he and Senator Barack Obama insisted on conditions that had to be met.
September 24, 2008
Bernanke Moves Closer to Interest-Rate Cut as Risks to Economy Intensify Federal Reserve Chairman Ben S. Bernanke moved closer to cutting interest rates, signaling that risks to U.S. growth are greater than policy makers saw them just last week.
U.S. Home Sales, Goods Orders Drop, Supporting Bernanke Warning on Economy Sales of new homes in the U.S. fell in August to a 17-year low and orders for durable goods dropped more than forecast, evidence of the mounting risks to the economy that Federal Reserve Chairman Ben S. Bernanke warned of yesterday.
Japan's Export Growth Slows More Than Estimated as Shipments to U.S. Drop. Japan's export growth slowed in August, led by a record drop in shipments to the U.S., increasing the likelihood the economy is in a recession.
Ireland Is First in Euro Area to Enter a Recession as Investment Plunges Ireland became the first euro area economy to slide into a recession, as homebuilding and consumer spending slumped and the global financial crisis intensified.
U.S. Initial Jobless Claims Soar to Highest in Seven Years on Hurricanes The number of Americans filing first-time claims for unemployment benefits rose last week to the highest since September 2001 as hurricanes kept residents of Texas and Louisiana out of work.
Bush Warns of `Painful Recession' as Congress Works to Forge Rescue Plan President George W. Bush said a $700 billion rescue plan for financial firms is needed to avert ``a long and painful'' recession, as Congress moved closer to an agreement.
German Consumer Confidence Unexpectedly Rises as Price of Crude Oil Drops German consumer confidence unexpectedly rose for the first time in five months after falling fuel prices left people with more to spend on food and clothing.
Steinbrueck Says U.S. Will No Longer Be `Superpower' of Financial World German Finance Minister Peer Steinbrueck said the U.S. will lose its position as the world's undisputed financial ``superpower'' and called for a ban on speculative short-selling to help restore the global economy.
U.K. Inflation Risk Can't Be Dismissed Even as Growth Slows, Barker Says Bank of England policy maker Kate Barker said there's a threat that the fastest inflation in a decade may persist even as the financial crisis raises the chances of the bank undershooting its target for consumer prices.
U.S. Jobless Claims Rise to a Seven Year High of 493,000: Table of the Day Following is a summary of the Sept. 20 initial jobless claims report from the Labor Department.
U.S. Home Sales, Goods Orders Drop, Supporting Bernanke Warning on Economy Sales of new homes in the U.S. fell in August to a 17-year low and orders for durable goods dropped more than forecast, evidence of the mounting risks to the economy that Federal Reserve Chairman Ben S. Bernanke warned of yesterday.
Japan's Export Growth Slows More Than Estimated as Shipments to U.S. Drop. Japan's export growth slowed in August, led by a record drop in shipments to the U.S., increasing the likelihood the economy is in a recession.
Ireland Is First in Euro Area to Enter a Recession as Investment Plunges Ireland became the first euro area economy to slide into a recession, as homebuilding and consumer spending slumped and the global financial crisis intensified.
U.S. Initial Jobless Claims Soar to Highest in Seven Years on Hurricanes The number of Americans filing first-time claims for unemployment benefits rose last week to the highest since September 2001 as hurricanes kept residents of Texas and Louisiana out of work.
Bush Warns of `Painful Recession' as Congress Works to Forge Rescue Plan President George W. Bush said a $700 billion rescue plan for financial firms is needed to avert ``a long and painful'' recession, as Congress moved closer to an agreement.
German Consumer Confidence Unexpectedly Rises as Price of Crude Oil Drops German consumer confidence unexpectedly rose for the first time in five months after falling fuel prices left people with more to spend on food and clothing.
Steinbrueck Says U.S. Will No Longer Be `Superpower' of Financial World German Finance Minister Peer Steinbrueck said the U.S. will lose its position as the world's undisputed financial ``superpower'' and called for a ban on speculative short-selling to help restore the global economy.
U.K. Inflation Risk Can't Be Dismissed Even as Growth Slows, Barker Says Bank of England policy maker Kate Barker said there's a threat that the fastest inflation in a decade may persist even as the financial crisis raises the chances of the bank undershooting its target for consumer prices.
U.S. Jobless Claims Rise to a Seven Year High of 493,000: Table of the Day Following is a summary of the Sept. 20 initial jobless claims report from the Labor Department.
Bernanke Says U.S. Faces `Grave Threats' as Credit Crisis Hurts Households Federal Reserve Chairman Ben S. Bernanke said the U.S. is facing ``grave threats'' to financial stability and warned that the credit crisis has started to damage household and business spending.
Bernanke Says Failure to Approve Bailout Would Threaten Markets, Economy Federal Reserve Chairman Ben S. Bernanke said the U.S. economy will shrink if markets don't begin functioning normally, joining Treasury Secretary Henry Paulson in urging skeptical lawmakers to quickly pass a $700 billion rescue for financial institutions.
Fed Will Help Banks Meet Money-Fund Redemptions, Buy Debt to Aid Liquidity The Federal Reserve will intervene in markets for commercial paper and U.S. agency debt after money-market mutual funds holding the securities experienced record withdrawals, threatening intensified financial-market turmoil.
Bernanke Says Failure to Approve Bailout Would Threaten Markets, Economy Federal Reserve Chairman Ben S. Bernanke said the U.S. economy will shrink if markets don't begin functioning normally, joining Treasury Secretary Henry Paulson in urging skeptical lawmakers to quickly pass a $700 billion rescue for financial institutions.
Fed Will Help Banks Meet Money-Fund Redemptions, Buy Debt to Aid Liquidity The Federal Reserve will intervene in markets for commercial paper and U.S. agency debt after money-market mutual funds holding the securities experienced record withdrawals, threatening intensified financial-market turmoil.
U.S. Lawmakers Agree on `Principles' of Government Rescue Plan, Dodd Says Congressional negotiators said they reached a bipartisan agreement on a ``set of principles'' for a $700 billion financial-rescue package to inject fresh capital into the paralyzed credit markets.
U.S. Home Sales, Goods Orders Drop, Supporting Bernanke Warning on Economy Sales of new homes in the U.S. fell in August to a 17-year low and orders for durable goods dropped more than forecast, evidence of the mounting risks to the economy that Federal Reserve Chairman Ben S. Bernanke warned of yesterday.
Bernanke Moves Closer to Interest-Rate Cut as Risks to Economy Intensify Federal Reserve Chairman Ben S. Bernanke moved closer to cutting interest rates, signaling that risks to U.S. growth are greater than policy makers saw them just last week.
U.S. Initial Jobless Claims Soar to Highest in Seven Years on Hurricanes The number of Americans filing first-time claims for unemployment benefits rose last week to the highest since September 2001 as hurricanes kept residents of Texas and Louisiana out of work.
U.S. Home Sales, Goods Orders Drop, Supporting Bernanke Warning on Economy Sales of new homes in the U.S. fell in August to a 17-year low and orders for durable goods dropped more than forecast, evidence of the mounting risks to the economy that Federal Reserve Chairman Ben S. Bernanke warned of yesterday.
Bernanke Moves Closer to Interest-Rate Cut as Risks to Economy Intensify Federal Reserve Chairman Ben S. Bernanke moved closer to cutting interest rates, signaling that risks to U.S. growth are greater than policy makers saw them just last week.
U.S. Initial Jobless Claims Soar to Highest in Seven Years on Hurricanes The number of Americans filing first-time claims for unemployment benefits rose last week to the highest since September 2001 as hurricanes kept residents of Texas and Louisiana out of work.
Lawmakers Reach Compromise Deal on $700B Bailout- APWarned of a possible financial panic, key Republicans and Democrats reported agreement in principle Thursday on a $700 billion bailout of the financial industry and said they would present it to the Bush administration in hopes of a vote within days.
- Stocks rally on bailout hopes- AP
- New home sales at 17-yr low, prices fall record amount- AP
- Jobless claims pushed to 7-year high- AP
- GE lowers profit guidance, suspends stock buybacks- AP
- 30-year mortgages jump after 5 weeks of declines- AP
- U.S. crude futures jump $2 amid bailout hopes- Reuters
- Bailout protesters plan day of action Thursday- CNNMoney.com
- How will the bailout work? No one actually knows- CNBC
- How to Build a Better Bailout- Tech Ticker
California Home Prices Drop Record 41% in August Amid Defaults
- Bloomberg
- 09/25/2008 03:14 PM
- AP
- 09/25/2008 12:14 PM
- Bloomberg
- 09/25/2008 09:36 AM
- Bloomberg
- 09/25/2008 07:48 AM
- Bloomberg
- 09/25/2008 07:47 AM
- Bloomberg
- 09/25/2008 06:22 AM
- Bloomberg
- 09/25/2008 05:05 AM
- NY Times
- 09/24/2008 09:01 PM
- NY Times
- 09/24/2008 08:06 PM
- NY Times
- 09/24/2008 07:57 PM
Federal Reserve Doubles Lending as Crisis Worsens (Update1)
Bloomberg - USA
21, the Fed allowed the US broker-dealer units of Goldman Sachs, Morgan Stanley and Merrill to pledge a broader range of collateral and have their London ...
Bloomberg - USA
21, the Fed allowed the US broker-dealer units of Goldman Sachs, Morgan Stanley and Merrill to pledge a broader range of collateral and have their London ...
Bailout Could Deepen Crisis, CBO Chief Says: Congress's top bookkeeper -- said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.
White House Admits It Drew Up Bailout Months Ago: White House Deputy Press Secretary Tony Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
Rumours spark Hong Kong bank run: Hundreds of customers have descended on branches of Hong Kong's Bank of East Asia (BEA) to demand their deposits back amid continuing nervousness over the state of global financial markets.
China banks told to halt lending to US banks-SCMP: Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.
Europe and Japan turn cold shoulder to U.S. plea for bank bailouts: The German chancellor, Angela Merkel, also took the opportunity to sharply criticize the United States and Britain for opposing German attempts to put greater regulation, or at least reviews, of the financial sector on the international agenda last year, when she was chairing the Group of 7 industrialized nations.
In case you missed it: Fannie Mae Eases Credit To Aid Mortgage Lending: The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Hedge funds move $100bn into safe havens: Citigroup estimates that hedge funds have now placed $600bn in cash, and that $100bn of this is held in money market funds, normally seen as some of the safest places to invest cash
White House Admits It Drew Up Bailout Months Ago: White House Deputy Press Secretary Tony Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
Rumours spark Hong Kong bank run: Hundreds of customers have descended on branches of Hong Kong's Bank of East Asia (BEA) to demand their deposits back amid continuing nervousness over the state of global financial markets.
China banks told to halt lending to US banks-SCMP: Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.
Europe and Japan turn cold shoulder to U.S. plea for bank bailouts: The German chancellor, Angela Merkel, also took the opportunity to sharply criticize the United States and Britain for opposing German attempts to put greater regulation, or at least reviews, of the financial sector on the international agenda last year, when she was chairing the Group of 7 industrialized nations.
In case you missed it: Fannie Mae Eases Credit To Aid Mortgage Lending: The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Hedge funds move $100bn into safe havens: Citigroup estimates that hedge funds have now placed $600bn in cash, and that $100bn of this is held in money market funds, normally seen as some of the safest places to invest cash
Why Mark-to-Paulson Accounting Won't Save Banks: Jonathan Weil
Commentary by Jonathan Weil
Sept. 25 (Bloomberg) -- There's one glaring weakness in Treasury Secretary Hank Paulson's plan to save the U.S. financial system: We know what the plan is. Any other problems with it are mere details.
Much like the credo of Brad Pitt's character in the 1999 movie ``Fight Club,'' the first rule of market manipulation is you don't talk about market manipulation.
Give Paulson a $700 billion check without asking any questions, and the former Goldman Sachs boss might have a shot at kick-starting the credit markets using some mysterious, black- box, trading sorcery. Because the money isn't his, though, he has to give us at least a vague outline of what he's up to. Now, even if Congress approves some form of his proposal, it's far less likely to work because we're all in on the deal.
The plan goes like this: Treasury will pay financial institutions above-market prices for garbage assets nobody else wants. Then, through the magic of mark-to-Paulson accounting, everybody else that owns similar stuff will use those same prices, or marks, to value the trash on their own balance sheets.
Shazam! Banks and insurance companies write up the asset values on their books. They post big profits. Their capital goes up. Everyone gets fooled. And nobody knows the difference.
Except, we do. And that's why the plan probably won't work.
Still, give Paulson and Federal Reserve Chairman Ben Bernanke credit for ingenuity. At the same time banks are begging regulators to suspend mark-to-market accounting rules so they can avoid disclosing more losses, Paulson and Bernanke instead devise a way to abuse the same rules for the same banks' benefit.
Put It in Reverse
Under Paulson's plan, Treasury would hold so-called reverse auctions for financial institutions' troubled assets. Whoever submits the lowest bid gets to sell its junky assets to Treasury for cash.
While that might look like a competitive, free-market mechanism, it's not. Once the first bid in the first auction is submitted, it may not go much lower, and it probably will be much higher than the true market value.
That's because the real incentive for the banks isn't to sell their rubbish to Treasury and get cash. It's to watch the Treasury pay grossly inflated prices to others. That way, they can use those transactions for accounting purposes to mark their books to the Treasury's farcical market prices.
This presents another problem. The transaction prices coming out of these auctions may not meet the accepted definition of fair value. Under the Financial Accounting Standards Board's definition, fair value is the price ``in an orderly transaction between market participants.''
Stretched Rules
A know-nothing buyer that sets up a rigged market to overpay for dreck wouldn't seem to count as a ``market participant,'' under the FASB's definition of the term. To qualify, a buyer must be ``knowledgeable, having a reasonable understanding about the asset or liability and the transaction based on all available information.''
It would be a stretch to say the Treasury knows or understands anything about the swill it would be buying. Even if regulators waived the accounting rules to permit this, investors would see it as government-sponsored fraud and lose any confidence they still had about banks' balance sheets.
So, the main hope for Paulson's plan is that Treasury makes enough outrageously expensive purchases to spur real market participants to start buying the toxic waste from each other again, even if only in hopes of flipping it for more money to the spendthrift Treasury.
Pain Avoidance
In that case, the prices paid outside the auction process probably would qualify as ``fair value.'' Then, over time, maybe the prices in Treasury's auctions would come down as competition increased.
If the prices drop too much, though, banks will wind up taking huge losses and failing anyway, which is what Paulson and Bernanke are supposedly trying to avoid. All the while, the Treasury would be spending as much as $700 billion getting us right back where we started. And a lot of Wall Street charlatans who should lose their shirts would expand their fortunes, which is politically and morally untenable.
Whatever the government proposes probably won't work as intended. It also could make things worse. This seems to have dawned on a lot of people in Congress this week while they watched Bernanke and Paulson testify. Even if Congress fails to act, that wouldn't mean Paulson's plan was a disaster. In one respect, the details of his plan don't matter.
By making it known on the afternoon of Sept. 18 that he had a bailout proposal, at precisely the moment when the financial system seemed to be tipping over the edge, Paulson bought the markets the most valuable commodity of all -- time.
Years from now, when we look back on the past week's events, we may conclude this was his real goal all along.
(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net
Commentary by Jonathan Weil
Sept. 25 (Bloomberg) -- There's one glaring weakness in Treasury Secretary Hank Paulson's plan to save the U.S. financial system: We know what the plan is. Any other problems with it are mere details.
Much like the credo of Brad Pitt's character in the 1999 movie ``Fight Club,'' the first rule of market manipulation is you don't talk about market manipulation.
Give Paulson a $700 billion check without asking any questions, and the former Goldman Sachs boss might have a shot at kick-starting the credit markets using some mysterious, black- box, trading sorcery. Because the money isn't his, though, he has to give us at least a vague outline of what he's up to. Now, even if Congress approves some form of his proposal, it's far less likely to work because we're all in on the deal.
The plan goes like this: Treasury will pay financial institutions above-market prices for garbage assets nobody else wants. Then, through the magic of mark-to-Paulson accounting, everybody else that owns similar stuff will use those same prices, or marks, to value the trash on their own balance sheets.
Shazam! Banks and insurance companies write up the asset values on their books. They post big profits. Their capital goes up. Everyone gets fooled. And nobody knows the difference.
Except, we do. And that's why the plan probably won't work.
Still, give Paulson and Federal Reserve Chairman Ben Bernanke credit for ingenuity. At the same time banks are begging regulators to suspend mark-to-market accounting rules so they can avoid disclosing more losses, Paulson and Bernanke instead devise a way to abuse the same rules for the same banks' benefit.
Put It in Reverse
Under Paulson's plan, Treasury would hold so-called reverse auctions for financial institutions' troubled assets. Whoever submits the lowest bid gets to sell its junky assets to Treasury for cash.
While that might look like a competitive, free-market mechanism, it's not. Once the first bid in the first auction is submitted, it may not go much lower, and it probably will be much higher than the true market value.
That's because the real incentive for the banks isn't to sell their rubbish to Treasury and get cash. It's to watch the Treasury pay grossly inflated prices to others. That way, they can use those transactions for accounting purposes to mark their books to the Treasury's farcical market prices.
This presents another problem. The transaction prices coming out of these auctions may not meet the accepted definition of fair value. Under the Financial Accounting Standards Board's definition, fair value is the price ``in an orderly transaction between market participants.''
Stretched Rules
A know-nothing buyer that sets up a rigged market to overpay for dreck wouldn't seem to count as a ``market participant,'' under the FASB's definition of the term. To qualify, a buyer must be ``knowledgeable, having a reasonable understanding about the asset or liability and the transaction based on all available information.''
It would be a stretch to say the Treasury knows or understands anything about the swill it would be buying. Even if regulators waived the accounting rules to permit this, investors would see it as government-sponsored fraud and lose any confidence they still had about banks' balance sheets.
So, the main hope for Paulson's plan is that Treasury makes enough outrageously expensive purchases to spur real market participants to start buying the toxic waste from each other again, even if only in hopes of flipping it for more money to the spendthrift Treasury.
Pain Avoidance
In that case, the prices paid outside the auction process probably would qualify as ``fair value.'' Then, over time, maybe the prices in Treasury's auctions would come down as competition increased.
If the prices drop too much, though, banks will wind up taking huge losses and failing anyway, which is what Paulson and Bernanke are supposedly trying to avoid. All the while, the Treasury would be spending as much as $700 billion getting us right back where we started. And a lot of Wall Street charlatans who should lose their shirts would expand their fortunes, which is politically and morally untenable.
Whatever the government proposes probably won't work as intended. It also could make things worse. This seems to have dawned on a lot of people in Congress this week while they watched Bernanke and Paulson testify. Even if Congress fails to act, that wouldn't mean Paulson's plan was a disaster. In one respect, the details of his plan don't matter.
By making it known on the afternoon of Sept. 18 that he had a bailout proposal, at precisely the moment when the financial system seemed to be tipping over the edge, Paulson bought the markets the most valuable commodity of all -- time.
Years from now, when we look back on the past week's events, we may conclude this was his real goal all along.
(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net
Housing Horror: Sales of 34.5% YoY
Newest figures out from the Census Bureau on housing sales and prices came out this mroning - and they are very bad:
The real number to watch? Home sales were 460,000 in August of this year, versus 702,000 in August of last year. So sales are down 34.5%!
Durable Goods Collapsing
While there's talk that the Big Bailout Deal is close, what this country doesn't need right now is another economic problem, but here's a very, very big one: The new durable goods orders out this morning show orders for big ticket items collapsing:
Mass Layoffs Up
Newest figures out from the Census Bureau on housing sales and prices came out this mroning - and they are very bad:
Sales of new one-family houses in August 2008 were at a seasonally adjusted annual rate of 460,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.5 percent (±11.7%)* below the revised July rate of 520,000 and is 34.5 percent (±7.3%) below the August 2007 estimate of 702,000.It gets worse when you drill down into the numbers. The average sale price in August of last year was $313,600 in the report. That's down 15.8%. The median price decline was less (about 6.2%) so no doubt the happy-talk media will focus on that one.
The median sales price of new houses sold in August 2008 was $221,900; the average sales price was $263,900. The seasonally adjusted estimate of new houses for sale at the end of August was 408,000. This represents a supply of 10.9 months at the current sales rate.
The real number to watch? Home sales were 460,000 in August of this year, versus 702,000 in August of last year. So sales are down 34.5%!
Durable Goods Collapsing
While there's talk that the Big Bailout Deal is close, what this country doesn't need right now is another economic problem, but here's a very, very big one: The new durable goods orders out this morning show orders for big ticket items collapsing:
"New Orders New orders for manufactured durable goods in August decreased $9.9 billion or 4.5 percent to $208.5 billion, the U.S. Census Bureau announced today. This was the largest percent decrease in new orders since January 2008 and followed three consecutive monthly increases including a 0.8 percent July increase. Excluding transportation, new orders decreased 3.0 percent. Excluding defense, new orders decreased 5.0 percent.As durables orders collapsing, on top of all the banking issues, will likely drive a large increase in layoffs/firings over the next couple of months as companies adjust staffing levels to cope with lessening demand. And already there's this:
Shipments Shipments of manufactured durable goods in August, down following two consecutive monthly increases, decreased $7.7 billion or 3.5 percent to $210.1 billion. This was the largest percent decrease in shipments since December 2002 and followed a 2.3 percent July increase.
Unfilled Orders Unfilled orders for manufactured durable goods in August, up thirty of the last thirty-one months, increased $3.0 billion or 0.4 percent to $827.2 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.8 percent July increase.
Inventories
Inventories of manufactured durable goods in August, up thirteen of the last fourteen months, increased $2.4 billion or 0.7 percent to $338.5 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.9 percent July increase.
Capital Goods Industries
Nondefense
Nondefense new orders for capital goods in August decreased $5.6 billion or 7.5 percent to $68.9 billion.
Defense
Defense new orders for capital goods in August increased $0.9 billion or 9.4 percent to $9.9 billion.
Mass Layoffs Up
Leaders Wrangle Over Bailout
- WSJ ($)
- 09/25/2008 09:32 PM
- Reuters
- 09/25/2008 09:03 PM
- NY Times
- 09/25/2008 09:02 PM
- NY Times
- 09/25/2008 09:01 PM
- Bloomberg
- 09/25/2008 08:48 PM
- Bloomberg
- 09/25/2008 03:14 PM
- AP
- 09/25/2008 12:14 PM
- Bloomberg
- 09/25/2008 09:36 AM
- Bloomberg
- 09/25/2008 07:48 AM
- Bloomberg
- 09/25/2008 07:47 AM
Money Markets Grind To A Virtual Halt: Interbank and Repo Rates At Record Highs
- Sep 25: The 3-mo USD LIBOR-OIS spread jumps to record 199bp. 3-mo EUR LIBOR-OIS at 86bp (record was 93bp in Nov 2007). TED spread (3m LIBOR- T-bill) at 316bp
- Sep 24: LIBOR rates at or near record highs in USD, EUR, GBP. There are no real term funding markets except for central banks. The Libor is meaningless. It's for unsecured lending and there is no unsecured lending--> ECB auction of 3-mo loans was the strongest on record, while banks paid a record premium for dollar loans at the Sep 23 Fed sale
Latest Data Shows U.S. Housing Sector is Still Far From Bottoming Out
- Stabilization in the U.S. housing sector is not yet in sight: Inventories and vacancies are still at a record high and continue to put downward pressure on home prices, which continue to fall translating into trillions of real wealth losses for the engine of the economy: the U.S. consumer
- New Home Sales (Aug 2008): at 469K, 17-year low and down -67% from the peak of July 2005 (1.389 mn). This is 11.5% below the revised July rate of 520k and is 34.5% below the Aug 2007 estimate of 702K
Naked Shorting Continues in CDS Market: '$62T CDS Market Must Be Regulated Immediately'
- Even as naked short sales are banned around the world, hedge funds can still bet against a company in the unregulated over the counter CDS market without the need to own the underlying bonds in order to place a bet--> Cox: "Whereas a person who owns a bond profits when its issuer is in a position to repay the bond, a short seller profits when, among other things, the bond goes into default"
Will Other GCC Central Banks Follow the UAE and Provide Liquidity to the Banks?
- UAE Central bank announced special 50bn dirham ($13.6bn) liquidity facility to provide capital to banks after foreign banks stopped providing capital. UAE banks have experienced considerable credit growth in the last year, funded in large part by external financing
- UAE's Dubai-driven need to provide comfort to banks could force other GCC central banks to follow suit but their real estate sectors are less exposed to credit withdrawal. Saudi Arabia's liquidity situation is actually higher than others. Intra-GCC capital controls are a possibility (Citigroup)
WaMu becomes biggest bank to fail in US history- APAs the debate over a $700 billion bank bailout rages on in Washington, one of the nation's largest banks -- Washington Mutual Inc. -- has collapsed under the weight of its enormous bad bets on the mortgage market.
House Republicans Undercut Bush on Financial-Rescue Plan, Stalling Talks Negotiations on the $700 billion rescue of the U.S. financial system stalled as House Republicans undercut the Bush administration and left it to congressional leaders to hammer out a compromise to calm markets.
European Central Banks Offer More Dollars From Fed in Coordinated Action European central banks will for the first time let banks borrow dollars from them for a week in an effort to ease drum-tight money markets at the end of the quarter.
Drop in U.S. Stocks Probably Checked Gain in September Consumer Sentiment The turmoil that roiled U.S. financial markets in the past few weeks probably restrained consumer sentiment in September even as gasoline prices dropped, economists said before a report today.
Sarkozy Puts of Deficit-Reduction in Budget Plan as Economic Growth Slows French President Nicolas Sarkozy, facing the slowest economic expansion in at least five years, shelved deficit-reduction plans in his second budget released today.
Nobel Laureates, Economists Urge Congress Not to Rush on U.S. Rescue Plan More than 150 prominent U.S. economists, including three Nobel Prize winners, urged Congress to hold off on passing a $700 billion financial market rescue plan until it can be studied more closely.
Undecided Voters Are Gloomier About Economy, Lean Toward Obama to Fix It The undecided voters who may make the difference in a close presidential election in November are more pessimistic about the direction of the nation than the broader electorate and are looking even more to Democrat Barack Obama on economic issues.
European Central Banks Offer More Dollars From Fed in Coordinated Action European central banks will for the first time let banks borrow dollars from them for a week in an effort to ease drum-tight money markets at the end of the quarter.
Drop in U.S. Stocks Probably Checked Gain in September Consumer Sentiment The turmoil that roiled U.S. financial markets in the past few weeks probably restrained consumer sentiment in September even as gasoline prices dropped, economists said before a report today.
Sarkozy Puts of Deficit-Reduction in Budget Plan as Economic Growth Slows French President Nicolas Sarkozy, facing the slowest economic expansion in at least five years, shelved deficit-reduction plans in his second budget released today.
Nobel Laureates, Economists Urge Congress Not to Rush on U.S. Rescue Plan More than 150 prominent U.S. economists, including three Nobel Prize winners, urged Congress to hold off on passing a $700 billion financial market rescue plan until it can be studied more closely.
Undecided Voters Are Gloomier About Economy, Lean Toward Obama to Fix It The undecided voters who may make the difference in a close presidential election in November are more pessimistic about the direction of the nation than the broader electorate and are looking even more to Democrat Barack Obama on economic issues.
Wall Street Top Executives Scored $3 Billion in Pay as Banks Rose and Fell Wall Street's five biggest firms paid more than $3 billion in the last five years to their top executives, while they presided over the packaging and sale of loans that helped bring down the investment-banking system.
Legg Mason's Miller Says U.S. Treasury Should Scale Back Takeover of AIG Bill Miller, the fund manager who oversees more than $37 billion at Legg Mason Inc., said it would be better for shareholders and U.S. taxpayers if the government scaled back its takeover of American International Group Inc.
London Turns Against Hedge Funds in Hunt for Culprit After Slump in Banks London is turning against the $450 billion hedge-fund industry that helped make the city a contender for the title of world financial capital.
Bill Gates Sees Slump in `Rich-World' Generosity as Market Crisis Deepens Microsoft Corp. founder Bill Gates said the U.S. financial crisis would likely reduce support of Western governments for programs to combat hunger, poverty and disease to which his foundation has contributed $17 billion.
Paulson Plan Aimed at Helping `Poorly Run' Banks, BB&T Chief Allison Says U.S. Treasury Secretary Henry Paulson's proposed $700 billion bank rescue aims to help ``poorly run'' companies and the primary beneficiaries would be Goldman Sachs Group Inc. and Morgan Stanley, said BB&T Corp. Chief Executive Officer John Allison in a critique of the plan.
Bill Gates Sees Slump in `Rich-World' Generosity as Market Crisis Deepens Microsoft Corp. founder Bill Gates said the U.S. financial crisis would likely reduce support of Western governments for programs to combat hunger, poverty and disease to which his foundation has contributed $17 billion.
Paulson Plan Aimed at Helping `Poorly Run' Banks, BB&T Chief Allison Says U.S. Treasury Secretary Henry Paulson's proposed $700 billion bank rescue aims to help ``poorly run'' companies and the primary beneficiaries would be Goldman Sachs Group Inc. and Morgan Stanley, said BB&T Corp. Chief Executive Officer John Allison in a critique of the plan.
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