This is truly unbelievable. Even as little as a week ago, the idea that AIG, the world’s biggest insurer, would go begging the Fed for help would have seemed daft. But that’s now an element of the meltdown in progress. And AIG is a major credit default swaps writer, bigger than Bear. If Bear could […]
Read more...Talk about a shotgun wedding. From the Wall Street Journal (hat tip reader Saboor): In a rushed bid to ride out the storm sweeping American finance, 94-year-old Merrill Lynch & Co. agreed late Sunday to sell itself to Bank of America Corp. for roughly $44 billion. The deal, which was being worked out in 48 […]
Read more...Hat tip readers dd and viv on this update from the New York Times’ Dealbook: Lehman will seek to place its parent company, Lehman Brothers Holdings, into bankruptcy protection, while its subsidiaries will remain solvent while the firm liquidates its holdings, these people said. A consortium of banks will provide a financial backstop to help […]
Read more...This post was modified from its original version due to the New York Times reporting that regulators were involved in discussions for AIG to take urgent measures to prevent a debt downgrade. Note the tone of the story at the Times (by Gretchen Morgenson and Mary Williams Walsh) presents the situation as more dire than […]
Read more...The initial report from the Wall Street Journal is skeletal (hat tip reader Randy(: Bank of America and Merrill Lynch & Co. Inc. are in merger discussions, according to people familiar with the matter. The talks come amid a Wall Street scramble to sort out a potential liquidation of Lehman Brothers Holdings Inc. Bank of […]
Read more...Reader Vijay pointed us to an op-ed today in the Washington Post by Don Luskin, “Quit Doling Out That Bad-Economy Line.” Some of its priceless wisdom: Things today just aren’t that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about […]
Read more...Reader Steve A , Scott and Saboor also pointed to the Bloomberg story reporting that the International Swaps Dealers Association had announced an emergency Sunday session to net Lehman-related position in anticipation of a possible bankruptcy filing, From Bloomberg: Wall Street prepared for a potential Lehman Brothers Holdings Inc. bankruptcy after Barclays Plc said it […]
Read more...The noose is tightening, with the powers that be facing the unattractive choices of a politically unpopular bailout (and egg on their face) versus an unwind of Lehman with potentially disastrous consequences. Will Paulson blink? So far, the word is no. From the New York Times (Hat tip reader DaddyMac): Unable to find a savior, […]
Read more...The Wall Street provided an update on the Lehman rescue efforts which were consistent with its earlier coverage, which discussed considerable impediments to a “good bank/bad bank” solution with Wall Street firms providing the capital to support the bad bank. Note this contradicts the more optimistic report from CNBC on this approach (which we viewed […]
Read more...NYC Opens Hotlines To Texting Tipsters CBS News Anti-Palin rally draws hundreds in Alaska USA Today. Perhaps more important, the anti-Palin crowd outnumbered the backers. The Joys of Ownership Gretchen Morgenson, New York Times Desperate companies turn to ‘usurious’ hedge funds The Independent Endgame in the banking sector Willem Buiter Credit and blame Economist (hat […]
Read more...Here you were just getting used to some relief on gas prices and anticipating more was in the offing, when Mother Nature goes and wreaks havoc with your hopes. From Bloomberg: Almost 20 percent of the nation’s oil refining capacity was shut after Hurricane Ike slammed into the Gulf Coast today, limiting fuel deliveries and […]
Read more...A few hours ago, we went over the most recent report on the Lehman talks sponsored by the Fed (the Wall Street Journal had a remarkably detailed account), and it seemed as if the obstacles to getting a deal done were considerable. Although there was discussion of forming a “good bank/bad ban” structure, it sounded […]
Read more...The UK’s Times reports that AIG is looking to liquify some holdings to shore up its balance sheet and hopefully its stock price. While AIG, like Lehman, is making a “reassure investors” presentation ahead of its scheduled earnings announcement, the article gives the impression that AIG can provide a more concrete, readily executed salvage operation […]
Read more...The New York Times and the Wall Street Journal provided Saturday afternoon updates on Lehman. The discussions increasingly acknowledge that a deal may not be in place by Sunday as initially hoped (understandable, given the authorities’ unwillingness to provide support and the near-impossibility of doing adequate due diligence in a few days) and have moved […]
Read more...Even though all eyes have been on Lehman, the potentially more troubling slow-motion train wreck is AIG. The insurer is a large credit default swaps protection writer and provides a host of financing products. Not only is AIG a larger firm than Lehman and could trigger a systemic event in the CDS market alone, but […]
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