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HBOS confirms Lloyds merger talksLloyds TSB is in advanced merger talks with HBOS to create a UK retail banking giant amidst a spreading global financial crisis.Source: BBC News | Business | World Edition | 17 Sep 2008 | 12:34 pm UK banks Lloyds, HBOS in merger talks: sourceLONDON (Reuters) - British bank Lloyds TSB is in merger talks with domestic rival HBOS Plc to create a 28 billion pound ($50 billion) mortgage giant, a person familiar with the matter said on Wednesday.Source: Reuters: Business News | 17 Sep 2008 | 12:30 pm Nigeria militants step up 'war'Militants attack another flow station in Nigeria's oil region, after declaring war at the weekend.Source: BBC News | Business | World Edition | 17 Sep 2008 | 12:28 pm General Mills profit tops Wall Street viewCHICAGO (Reuters) - General Mills Inc posted a higher-than-expected quarterly profit and raised its full-year forecast on Wednesday as consumers bought more cake mixes and frozen pizzas to save money.Source: Reuters: Business News | 17 Sep 2008 | 12:27 pm Fed's price: AIG must shrinkThe Federal Reserve's ninth inning rescue of AIG may soothe capital markets and keep the company's bondholders from taking a beating, but the financial services titan's future will look very different, and likely much narrower.Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 12:24 pm Emerging Markets Report: Financial turmoil accelerates in RussiaRussian financial turmoil accelerates Wednesday as trading on the country’s major exchanges halts for a second day and the finance ministry announces plans to loan the country’s three largest banks up to $44 billion.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 12:21 pm Lloyds TSB boss Eric Daniels takes centre stageLloyds TSB, for so long criticised for being boring, is finally leading Britain's mangy pack of banking dogs. Chief executive Eric Daniels has been through it.Source: Telegraph Business | 17 Sep 2008 | 12:15 pm AIG rescue calms markets, HBOS and Lloyds in talksLONDON/HONG KONG (Reuters) - An $85 billion dollar U.S. lifeline for American International Group gave some respite to battered financial stocks, while the UK's biggest mortgage lender HBOS Plc and Lloyds TSB contemplated a merger which would reshape British banking.Source: Reuters: Business News | 17 Sep 2008 | 12:14 pm Nortel says revenue will fall in 2008Read full story for latest details.Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 12:10 pm Europe Markets: Stocks in Europe advance, HBOS volatile amid merger talkEuropean shares rise on Wednesday but are off the session’s highs, with more uncertainty about the health of financials such as U.K. mortgage lender HBOS contributing to a volatile session.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 12:10 pm Wall St turmoil ripples through tech and data vendorsLOS ANGELES/NEW YORK (Reuters) - Technology and information providers, already grappling with penny-pinching customers, were dealt another blow this week with the bankruptcy of Lehman Brothers and the takeover of Merrill Lynch .Source: Reuters: Business News | 17 Sep 2008 | 12:07 pm General Mills quarterly profit declines 3.6%NEW YORK (MarketWatch) -- General Mills Inc. said Wednesday its fiscal first-quarter profit declined nearly 4% on sharp commodity cost increases and greater restructuring charges, but nonetheless raised its full-year forecast on improved operating profits.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 12:07 pm London Markets: HBOS shares volatile in modestly higher LondonHBOS unsettles London investors with another volatile share price performance on Wednesday, as investors try to balance ongoing worries about the company’s funding position with possible merger talks.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 12:06 pm Top Pre-Market Analyst Upgrades (ACE, NLY, ESLR, GFIG, HOKU, ITG, GS, KR, MON, NDAQ, TRV)These are some of the positive calls and upgrades we have seen from analysts in early morning hours this Wednesday morning:
Jon C. Ogg Source: 24/7 Wall St. | 17 Sep 2008 | 12:05 pm HBOS merger with Lloyds TSB may cost UK 40,000 jobsA merger of HBOS and Lloyds TSB could lead to as many as 40,000 UK job losses and 1,000 branch closures, rival bankers estimated, because of the huge overlap between the two banks.Source: Latest Business News from Times Online | 17 Sep 2008 | 12:03 pm Barclays buys core Lehman assetsUK bank Barclays buys some of the core assets of collapsed investment bank Lehman Brothers for $1.75bn.Source: BBC News | Business | World Edition | 17 Sep 2008 | 12:03 pm Top Pre-Market Analyst Downgrades (BGFV, CME, QSII, TUP, SKS)These are some of the negative calls and downgrades we have seen in early morning hours this Wednesday morning:
Jon C. Ogg Source: 24/7 Wall St. | 17 Sep 2008 | 12:02 pm Lloyds TSB, HSBC line up in Government-brokered sale of HBOSLloyds TSB is in advanced talks to buy HBOS, in a deal which would rescue the mortgage lender’s shares from relentless selling and create a high street banking giant.Source: Telegraph Business | 17 Sep 2008 | 12:00 pm Oil rallies as Wall Street gets a lifelineOil prices rallied Wednesday after a couple of bruised and battered financial institutions received assistance and ahead of the government's weekly supply report.Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 11:59 am Stock futures slip as AIG rescue fails to reassure (Reuters)
Source: Yahoo! News: Business | 17 Sep 2008 | 11:57 am Stock futures slip as AIG rescue fails to reassureNEW YORK (Reuters) - Stock index futures slipped on Wednesday as investors worried the U.S. government rescue of insurer American International Group wouldn't be enough to stem turmoil in global financial markets.Source: Reuters: Business News | 17 Sep 2008 | 11:57 am Nortel (NT): A Hit To Global Broadband And Wireless
Nortel is North America's largest maker of telecom infrastructure equipment, and a drop in its financial fortunes means that cable and telephone companies are throttling their growth. Consumer spending problems may be catching up with the communications industry. According to Bloomberg, "Sales will fall 2 percent to 4 percent in 2008, compared with an earlier target of growth in the low single-digit percentages, Toronto-based Nortel said today in a statement." Earnings for the next quarter will miss estimates. If Nortel's trouble traces all the way back to the consumer, it means that sales of cell phones, wireless plans, and broadband services are likely to slip. So far spending on these goods and services has been a bright spot for the economy. That may be over and done with. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Sep 2008 | 11:54 am Nortel cuts full-year revenue outlookTORONTO (Reuters) - Nortel Networks Corp cut its revenue forecast for 2008 and projected lower third-quarter sales than analysts expected on Wednesday, as customers further reduce capitalSource: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 11:54 am Nortel cuts full-year revenue outlookTORONTO (Reuters) - Nortel Networks Corp cut its revenue forecast for 2008 and projected lower third-quarter sales than analysts expected on Wednesday, as customers further reduce capital expenditures.Source: Reuters: Business News | 17 Sep 2008 | 11:54 am AIG rescue calms markets, HBOS and Lloyds in talks (Reuters)
Source: Yahoo! News: Business | 17 Sep 2008 | 11:53 am Indications: Stock futures slip after U.S. government's AIG rescue planU.S. stock futures edged lower Wednesday after two wild sessions, with the threat of an American International Group bankruptcy averted as the U.S. government seized control.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 11:51 am Currencies: Dollar dips as market digests AIG lifelineThe U.S. dollar was under pressure Wednesday as financial markets digested the implications of the U.S. government’s rescue of troubled insurance giant American International Group.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 11:51 am As an AIG policyholder, should you stay or go? Experts say 'stay'State insurance regulators are assuring policyholders that the financial problems besetting AIG would not trickle down to the firm’s insurance subsidiaries, but policyholders with high-value annuities and whole-life insurance products still might be worried.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 11:50 am HBOS and Lloyds TSB in talksLloyds TSB is in advanced discussions with HBOS about a takeover of the UK's leading mortgage lender following the precipitous decline in its share price this week.The high-level talks are detailed and...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 11:49 am Gordon Brown steps in to secure HBOS rescueGordon Brown has intervened personally in attempts to rescue HBOS, Britain’s biggest savings bank, which is in talks to be acquired by Lloyds TSB.Source: Latest Business News from Times Online | 17 Sep 2008 | 11:49 am BoJ holds rate steady, citing weak growth, rising economic risksThe Bank of Japan voted unanimously Wednesday to leave its key interest rate at 0.5%, citing weak economic growth.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 11:43 am Morgan Stanley weighing possible merger: reportSINGAPORE (Reuters) - Investment bank Morgan Stanley is weighing whether it should remain independent or merge with a bank, given the recent turbulence in the company's share price, broadcaster CNBC reported on Wednesday.Source: Reuters: Business News | 17 Sep 2008 | 11:42 am Bank voted 8-1 to hold UK ratesDavid Blanchflower is the only member of the Bank of England's MPC committee to call for an interest rate cut.Source: BBC News | Business | World Edition | 17 Sep 2008 | 11:41 am Morgan Stanley weighing possible merger: report (Reuters)
Source: Yahoo! News: Business | 17 Sep 2008 | 11:40 am Trading in Russian shares haltedTrading on Russia's main stock exchanges has been suspended following steep falls in share prices.Source: BBC News | Business | World Edition | 17 Sep 2008 | 11:40 am 7 new smartphones for the smart setOnce reserved for business executives, smartphones today are thinner, sleeker and available in colors like pink and aquamarine. Here are some of the latest styles.Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 11:36 am 'Drill, baby, drill' mantra begins reshaping oil policyFar beyond the Republican National Convention, one of the newly minted slogans of the 2008 presidential campaign has hit the halls of Congress with full force.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 11:35 am Earnings Watch: Updates, advisories and surprisesA roundup of the latest corporate earnings reports and what companies are saying about future quarters.Source: MarketWatch.com - Top Stories | 17 Sep 2008 | 11:31 am Bank of England: Interest rate cut looks more likely nowThe Bank of England is edging towards a rate cut by the end of the year, according to economists.Source: Telegraph Business | 17 Sep 2008 | 11:30 am Bank of England: Interest rate cut looks more likely nowThe Bank of England is edging towards a rate cut by the end of the year, according to economists.Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 11:30 am Markets stage cautious recoveryThe rescue of troubled insurer AIG and a potential takeover of UK lender HBOS boost confidence but markets are still volatile.Source: BBC News | Business | World Edition | 17 Sep 2008 | 11:29 am MPC voted 8-1 to keep rates on holdThe Bank of England's rate-setting committee voted 8-1 to keep rates on hold at 5 per cent this month, after none of its members recommended a rate rise for the first time since June.Source: Latest Business News from Times Online | 17 Sep 2008 | 11:29 am Japan central bank keeps interest rates unchangedJapan's central bank kept a key interest rate unchanged at 0.5 percent Wednesday, as widely expected, amid growing concerns about financial market turmoil on Wall Street, slowing domestic...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 11:28 am Bank Regulators Try To Auction Washington Mutual (WM)?
Bank regulators may be trying to find a home for Washington Mutual (WM). According to The New York Post, "The fate of Washington Mutual remained in question yesterday as federal regulators recently called a number of banks asking if they would consider buying the nation's largest savings and loan should it eventually falter." With banks refusing to lend money to other banks due to the deepening credit crisis, the odds that they will provide capital to homeowners are long. Washington Mutual's portfolio of home loans and mortgage-related paper make it likely to be the next candidate for a liquidation. WaMu won't make it. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Sep 2008 | 11:26 am US government rescues insurer AIGThe US Federal Reserve announces an $85bn rescue package for AIG, the country's biggest insurance company as authorities strive to prevent a financial meltdown.Source: BBC News | Business | World Edition | 17 Sep 2008 | 11:23 am General Mills profit edges lowerNEW YORK (Reuters) - General Mills Inc posted lower quarterly profit on Wednesday as price increases and expense-cutting measures failed to offset the food company's higher commodity...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 11:21 am Oil rebounds after 2-day tumbleOil prices rebounded Wednesday as traders viewed a two-day $10 drop as overdone and driven more by recent market jitters than by fundamentals. Sentiment got a boost on news that the U.S.Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 11:15 am HBOS in rescue talks with Lloyds TSB to create banking giantLloyds TSB is in advanced talks to buy HBOS, in a deal which would rescue the mortgage lender’s shares from relentless selling and create a high street banking giant.Source: Telegraph Business | 17 Sep 2008 | 11:09 am HBOS in rescue talks with Lloyds TSB to create banking giantLloyds TSB is in advanced talks to buy HBOS, in a deal which would rescue the mortgage lenders shares from relentless selling and create a high street banking giant.Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 11:09 am 5+design Names 5 New AssociatesArchitectural studio recognizes individuals' contribution to global success HOLLYWOOD, Calif., Sept. 17 /PRNewswire/ -- In three short years 5+design has grown from...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 11:00 am [video] William Petty, CEO of Franklin Mining, Inc. Discusses Progress on the Escala Mine Project on WallSt.net's 3-Minute Press ShowLAS VEGAS, Sept. 17 /PRNewswire-FirstCall/ -- Franklin Mining, Inc. (Pink Sheets: FMNJ), an exploration company with energy interests in the U.S. and South America, todaySource: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 11:00 am Hudson Highland Group to Present at CL King Best Ideas ConferenceNEW YORK, Sept. 17 /PRNewswire-FirstCall/ -- Hudson Highland Group, Inc. (Nasdaq: HHGP), one of the world's leading providers of specialized professional staffing,...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 11:00 am Zimbabwe issues new banknoteZimbabwe's central bank Wednesday issued a new 1,000 dollar note in a bid to ease widespread cash shortages as the country battles the world's highest inflation rate. ...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 10:59 am US stocks head for lower open after AIG bailoutU.S. stocks headed for a lower open Wednesday, with investors still anxious about the financial sector even after the government bailed out the insurer American International Group Inc. andSource: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 10:59 am U.K.'s largest mortgage lenders in merger talksRead full story for latest details.Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 10:57 am Bank of Japan says economy to stay sluggishThe Bank of Japan said Wednesday that it expected the world's second largest economy to remain sluggish for now amid market turmoil as it kept interest rates at a low 0.50 percent.Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Sep 2008 | 10:56 am Gatwick Airport put up for saleThe UK's second-largest airport, Gatwick, is put up for sale by its owner BAA following a report by the Competition Commission.Source: BBC News | Business | World Edition | 17 Sep 2008 | 10:53 am Abbott (ABT): A Resurrection Of The Stent Business
Last year, several studies showed that stents could cause clotting which in turn could trigger heart attacks. More recently scientists have pointed to the fact that open heart surgery can be more effective than stents for managing cardiac disease. The bad medicine almost scuttled Boston Scientific (BSX). It had taken on huge debt to buy rival Guidanct. Stents are one of the company's largest product lines. The sharp drop in sales after the challenging research was issued took BSX shares to a series of 52-week lows. The two other stent manufacturers, Abbott (ABT) and Johnson & Johnson (JNJ) have broad and diverse business operations, some outside of medicine. The damage to stent sales hurt them but did not pose a meaningful threat to their sales or earnings. After a hellish period, one stent product has begun to show progress which may bring doctors back to the treatment as a means of effective therapy. According to The Wall Street Journal, Abbott's Xience drug-coated stent is exceeding the company's expectations following its introduction in the U.S. in early July. The news could simply be viewed as more trouble for BSX. Abbott's new product may steal market share. There is, however, just as much chance that a view of stents as a reliable treatment for artery problems will resurrect the market and even Boston Scientific will get some benefit. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Sep 2008 | 10:47 am Lloyds TSB boss Eric Daniels takes centre stageLloyds TSB, for so long criticised for being boring, is finally leading Britain's mangy pack of banking dogs. Chief executive Eric Daniels has been through it.Source: Telegraph Business | 17 Sep 2008 | 10:40 am Lloyds TSB boss Eric Daniels takes centre stageLloyds TSB, for so long criticised for being boring, is finally leading Britain's mangy pack of banking dogs. Chief executive Eric Daniels has been through it.Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 10:40 am FTSE rises after bank merger reportsLondon equities were highly volatile on Wednesday, with banking stocks stirred up by rumour of bid activity in the sector as shares in HBOS once more fell fast, only to rebound strongly. The sector failed...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 10:35 am The Next Wave Of The Credit Crisis: Banks Stop Loans To One Another
According to The Wall Street Journal, "Banks abruptly stopped lending to each other or charged exorbitantly high rates Tuesday." The market craves capital now. Banks that have short-term liquidity problems cannot turn to peers. If capital reserves at these institutions fall too far, they risk being visited by the FDIC. The agency is troubled by its own low reserves, which means it will have to go to Treasury for more capital. The borrowing from the US government to keep the system stable keeps rising. The wider problem is the lack of capital for businesses and consumers. The most obvious case involves home buyers who cannot secure mortgages. As they are turned away, the inventory of homes grows and real estate prices are bound to fall further. Capital expenditures at most businesses rely on either lines of credit or business loans. The growth of the capital goods market is already in trouble. Manufacturers who make products which cost over $100,000 are likely to face cash shortages which will challenge their ability to keep their doors open. At the very least, they will cut capacity and jobs. Lines of credit are also an essential part of the balance sheet management at car companies and airlines. A lock-up in lending may be the action that finally tips one or more into Chapter 11. Money borrowed from the Fed by banks has no strings attached, as long as it is paid back. The firms use it to build there own reserves and put next to nothing into the manufacturing and service sectors. If the government will bail out banks and insurance companies, it would be wise to bail out the lending system which is a part of almost every industry in the country. Fed money could come with one caveat. Some portion of it has to go out in the form or loans. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Sep 2008 | 10:31 am Bank stocks lead Asian markets lowerChinese stocks fell to fresh 22-month lows on Wednesday as investors worried over the global exposure to Lehman Brothers and a scandal over contaminated milk further undermined confidence. Investors in...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 10:30 am AIG SavedCapping off perhaps the most dramatic week ever in U.S. finance the federal government hammered out a crucial deal to seize A.I.G., the insurance giant that was teetering on the brink of bankruptcy. The Man Who Saved (or Got Suckered by) Wall Street Seeds of Lehman's Destruction The Abstract: Jackson Hole Symposium Papers Source: Portfolio.com: Top 5 | 17 Sep 2008 | 10:30 am AIG rescue weighs on yenThe yen lost ground on Wednesday as the Federal Reserve's rescue of AIG, the largest insurer in the US, boosted investor risk appetite. The yen has benefited from the recent turmoil on financial markets...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 10:21 am Gas prices tick higher: Up 38% from JulyGas prices edged higher, rising for the eighth straight day, according to a nationwide survey of credit card swipes at gasoline stations.Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 10:13 am Some Funds, ETFs Weather Storm Better Than Others (Fund Insight)Some fund sectors and ETFs are weathering the market storm better than others.Source: SmartMoney.com | 17 Sep 2008 | 10:12 am UK banks Lloyds, HBOS in merger talks: source (Reuters)
Source: Yahoo! News: Business | 17 Sep 2008 | 10:12 am Porsche Takes Over VW, May Invade US (GM)(F)
The change in control may well mean a change in philosophical direction. Among other things,VW has been a failure in the US market since the demise of the Bug, its once popular small car with a tiny engine in the trunk. According to The New York Times, "Porsche now has voting control of VW’s shares and has said it intends to raise its stake to more than 50 percent in the next few months." The performance car company is going to want something in exchange for its burgeoning investment. VW already does well in the fast-growing China market where it leads in share, just ahead of GM. The trouble is that vehicle sales dropped on the mainland in August. Yesterday, GM revised its sales goals for the world's most populous country downward. While the US auto market is in ruins now, it still produces 14 million vehicle sales a year. There is too much competition in America for any company to begin with next to no market share and grow that to 10% or 15%. That must pain VW, which is the largest car company in Europe. The speculation that Chrysler may fail grows each month as its sales run down more than 30% compared with last year. No matter what it says in public, hedge fund Cerberus would almost certainly like to dump its interest. If Ford (F) and GM (GM) do not get $50 billion in loan guarantees from the US government, they will face raising capital during a global credit crisis. Since both have market caps below $12 billion, raising $20 billion would destroy the value of their common stocks. At Ford, where the founding family's fortune is based on the company's existence, the process of a dilution or a liquidation would be especially grim.The Ford family still controls the firm with special voting shares and might part with the company to save its inheritance VW has a chance to buy its way into the US market, and with a more aggressive owner in Porsche, that prospect is more likely. VW could certainly eliminate all of the management and most of the product development costs at a US car company. A sharp cutting of expenses might even turning a money-losing American car company into a profitable enterprise. VW can get into the world's largest car market cheap. One of the US auto companies will not be independent for long. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Sep 2008 | 10:07 am Barron's: Treasury's Backstop Blues (Today From Barron's)Bond investors should worry if Congress keeps promoting home ownership.Source: SmartMoney.com | 17 Sep 2008 | 10:07 am UK unemployment rises to nine-year highThe number of people of out of work rose by 81,000 to a nine-year high in August as the rate of Britons claiming unemployment benefits surged at the fastest rate since the UK's last recession.Source: Latest Business News from Times Online | 17 Sep 2008 | 10:05 am Mortgage Bailout Latest Blow to Free Markets (Tradecraft)Free markets, not the government, should've decided the fates of Fannie, Freddie.Source: SmartMoney.com | 17 Sep 2008 | 9:45 am Don't Celebrate Real Estate's Recovery Yet (Common Sense)How Freddie and Fannie will be managed now isn't clear, while home prices continue to fall.Source: SmartMoney.com | 17 Sep 2008 | 9:44 am Strange Market Makes for Strange Bedfellows (Tradecraft)With Google and gold all but trading in lockstep, I'm heading for the sidelines.Source: SmartMoney.com | 17 Sep 2008 | 9:44 am HBOS in talks with Lloyds TSB over merger after shares plungeBeleaguered lender HBOS is in talks with UK rival Lloyds TSB about a merger which would value HBOS’ shares at around 300 pence each.Source: Telegraph Business | 17 Sep 2008 | 9:44 am HBOS in talks with Lloyds TSB over merger after shares plungeBeleaguered lender HBOS is in talks with UK rival Lloyds TSB about a merger which would value HBOS shares at around 300 pence each.Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 9:44 am UK unemployment total rises againThe number of people out of work rose by another 81,000 between May and July, to 1.72 million, official figures show.Source: BBC News | Business | World Edition | 17 Sep 2008 | 9:40 am AIG Saved: Two Sets Of Rules Becomes No Rules At All
The conventional reaction to the news was that the federal government has adopted two sets of rules. The Fed will loan AIG $85 billion for two years and take a 79.9% share in the insurance company for good measure. The Fed articulated its reasons, but did not clear up how they would be applied in future decisions: "The 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." The government has undermined the free market system. It based the decisions to help Fannie Mae (FNM) and AIG on arbitrary swings in human judgment which ultimately are not grounded in one set of principles. Free markets are never "free". They assume a certain amount of regulation so that some of the players will not act irresponsibly. In AIG's case, government officials and bankers may have hijacked the system by lobbying to keep jobs intact and prevent more abominable losses which might well have pulled under several more banks and brokerage firms. At this point, the financial system may have to tolerate a level of regulatory uncertainty to go with the economic uncertainty which already roils the markets. In some cases the government is willing to own US financial firms. In other cases, it is willing to throw them to the wolves. Risk is either akin to financial markets or it is not. Making a decision about how much risk is too much risk ex post facto only tells firms that they can dive off a cliff and still be saved. Moral relativism has marched into the system and any sense that actions have consequences has been muddled. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Sep 2008 | 9:38 am Election Scams Go High-Tech (The Agenda)Scammers are capitalizing on all the interest in the campaigns. Here's what to watch out for.Source: SmartMoney.com | 17 Sep 2008 | 9:36 am Election Scams Go High-Tech (Rip-Off of the Week)Scammers are capitalizing on all the interest in the campaigns. Here's what to watch out for.Source: SmartMoney.com | 17 Sep 2008 | 9:36 am Which Warehouse Club Is the Best? (SmartMoney Magazine)We visit Costco, Sam's and BJ's to find the best prices, service and selection.Source: SmartMoney.com | 17 Sep 2008 | 9:26 am AIG rescued by US Federal Reserve with $85bn bailout$American International Group (AIG), one of the world's biggest insurers, has been saved from the brink of collapse after the US Federal Reserve, America’s central bank, agreed an $85 billion ($£47 billion) bailout of the company.Source: Latest Business News from Times Online | 17 Sep 2008 | 9:21 am Bank hopes lift European stocksBanks found some support in Europe on Thursday, along with insurers, as investors considered what steps might be taken to save those institutions worst hit by the credit crisis and recent sell off.The...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 9:18 am HBOS shares plunge furtherBritain’s biggest savings and mortgage bank has suffered a further plunge on the stock market.Source: Telegraph Business | 17 Sep 2008 | 9:03 am HBOS shares plunge furtherBritains biggest savings and mortgage bank has suffered a further plunge on the stock market.Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Sep 2008 | 9:03 am U.S. regulators try to find WaMu buyer: report(Reuters) - U.S. federal regulators recently called a number of banks asking if they would consider buying Washington Mutual Inc should it eventually falter, the New York Post said, citing sources.Source: Reuters: Business News | 17 Sep 2008 | 9:00 am U.S. regulators try to find WaMu buyer: report (Reuters)
Source: Yahoo! News: Business | 17 Sep 2008 | 8:54 am Lloyds TSB is in talks to buy HBOSLloyds TSB is in advanced talks to buy HBOS, Britain's biggest mortagge lender.Source: Telegraph Business | 17 Sep 2008 | 8:45 am Mutual funds vs. private money managersQuestion: What is your opinion of brokerage-managed accounts? Are these separately-managed accounts a good way to have your money managed?Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 8:44 am Learning to love this bear marketWith U.S. equities down 24% and foreign shares off 33% from their October peak, you probably think Wall Street is broken. It's not. In fact, dramatic downturns are actually a sign the market is working. Let me explain.Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 8:41 am AIG share crash means more pain for top U.S. firmsBOSTON (Reuters) - Fidelity Investments' Harry Lange, manager of its one-time star Magellan fund, made what now looks like a poorly timed move in June: he nearly doubled his holdings of insurer American International Group Inc.Source: Reuters: Business News | 17 Sep 2008 | 8:34 am NY artist records public scorn on Wall Street (AP)
Source: Yahoo! News: Business | 17 Sep 2008 | 8:25 am Robert PestonWhy UK bank HBOS is far too big to failSource: BBC News | Business | World Edition | 17 Sep 2008 | 8:18 am AIG: FTSE 100 reacts with relief to bail outThe FTSE 100 rose at the open in London, ending two days of heavy falls, as investors reacted with relief to the US government's last-minute, $85bn bail out of the world's largest insurer, AIG.Source: Telegraph Business | 17 Sep 2008 | 8:15 am Lehman Brothers: Steamy clinch lightens coverage of collapseUS news channel CNN became the latest victim of Howard Stern when the 'shock-jock' sent two employees to Wall Street to lighten up the Lehman Brothers crisis.Source: Telegraph Business | 17 Sep 2008 | 8:15 am Fed Saves AIG's (AIG) Bacon, Makes Two Sets Of Rules
After allowing Lehman (LEH) to fail, the new arrangement with AIG raises questions of who lives and who dies on Wall St. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Sep 2008 | 7:59 am Media Digest 9/17/2008 Reuters, WSJ, NYTimes, FT, Bloomberg
Reuters says that Barclays (BCS) bought the US unit of Lehman (LEH). Reuters reports that the Fed held interest rates steady. Reuters says that Morgan Stanley (MS) is weighing whether it should stay independent. Reuters reports that investors see a golden era of distressed securities. Reuters says that the Fed paid back JP Morgan (JPM) $87 billion for money it used to facilitate trades with bankrupt Lehman (LEH). The Wall Street Journal reports that Sandisk (SNDK) made an offer from Samsung. The Wall Street Journal reports that oil speculators who used borrowed money are being forced out of the market. The Wall Street Journal reports that Toyota (TM) believes it will post a profit in the US. The Wall Street Journal says that inflation fell due to dropping price of oil. The Wall Street Journal reports that Best Buy's (BBY) profits fell. The Wall Street Journal reports that the Lehman failure is leading banks to sell-off commercial property assets. The Wall Street Journal reports that lending among banks is frozen. The Wall Street Journal reports that stocks in Russia fell 11%. The Wall Street Journal reports that some hedge funds were left in a bind by the collapse of Lehman. The Wall Street Journal reports that Dell (DELL) says demand for its products is soft. The Wall Street Journal writes that GM (GM) has cut its outlook for China sales. The Wall Street Journal reports that GM's new electric car and cost cutting will be the basis of much of the company's future. The Wall Street Journal reports that Amgen's (AMGN) bone drug cleared major testing hurdles. The Wall Street Journal reports that Abbott's (ABT) drug-coated stent is selling better than the company expected. The Wall Street Journal reports that McClatchy (MNI) cut 10% of its work force and that the Newark Star-Ledger may fold. The New York Times says that some members of Congress and experts believe that the government should create a new entity to buy Wall St.'s bad loans. The New York Times reports that gas prices are rising slowly after Hurricane Ike hit the Texas coast. The New York Times reports that the heads of GM (GM) and Ford (F) went to Washington to push their case for loan guarantees. The New York Times reports that Porsche took a controlling interest in VW. The FT reports that oil fell to $90. The FT reports that Google (GOOG) is having trouble making inroads in Asia and Russia. Bloomberg reports that the Fed's rescue of AIG (AIG) and rejection of helping Lehman (LEH) puts it in the business of deciding which firms to help. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Sep 2008 | 7:55 am US to take control of AIGThe US Federal Reserve announced that it wouldl lend AIG up to $85bn in emergency funds in return for a government stake of just under 80 per cent and effective control of the company. The latest extraordinary intervention by the Fed, which held rates at 2% on Tuesday, helped markets in New York finish higher and rise in Asia, but Europe was mixed. Shares in UK mortgage lender HBOS continued to fall sharplySource: FT.com - US homepage | 17 Sep 2008 | 7:52 am Asia greases money markets, AIG deal fails to sootheSINGAPORE/TOKYO (Reuters) - Japan, Australia and India pumped $33 billion into money markets on Wednesday as a U.S. government rescue of insurer AIG failed to soothe frayed nerves and ease a funding squeeze triggered by the crisis engulfing Wall Street.Source: Reuters: Business News | 17 Sep 2008 | 7:37 am Federal Reserve to rescue AIG in $85-billion finance planFed Chairman Ben Bernanke acted after the world's largest insurer said it would file for bankruptcy if the government did not come to its aid.In the U.S. government's largest single intervention in the private sector and in a measure of the depths of the global financial crisis, the Federal Reserve agreed late Tuesday to lend American International Group Inc. $85 billion to finance the insurance giant's likely liquidation over the next two years. Source: L.A. Times - Business | 17 Sep 2008 | 7:00 am Wall Street's woes ripple around the worldGlobal stock markets reflect anxiety over exposure to the U.S. meltdown.Du Xiufeng, a small textile producer in China's industrial belt near Shanghai, is about as far from the drama on Wall Street as you can get. Yet neither he nor countless businesses in China and around the globe can escape the fallout from America's financial meltdown. Source: L.A. Times - Business | 17 Sep 2008 | 7:00 am Chevy Volt's unveiling sparks questions about financingGM executives acknowledge that the $25 billion the industry is seeking in federal loan guarantees would help subsidize the hybrid car's development and production.Tuesday's unveiling of the Chevrolet Volt electric hybrid car was supposed to be a celebration of new technology, the birth of a new class of automobile. Instead, the crowd at General Motors Corp.'s Renaissance Center was buzzing over who was going to pay for it: GM or American taxpayers? Source: L.A. Times - Business | 17 Sep 2008 | 7:00 am Money market fund Reserve Primary faltersThe fund's asset value falls below the standard $1 a share because of losses on IOUs from Lehman Bros.The credit crisis took a new and dangerous turn Tuesday, when the asset value of a large money market mutual fund dropped below the standard $1 a share because of losses on IOUs from brokerage Lehman Bros. Holdings Inc. Source: L.A. Times - Business | 17 Sep 2008 | 7:00 am El Capitan Theatre for saleThe asking price for the Hollywood landmark, restored to its former glory in the 1990s, is $31 million.The historic El Capitan Theatre on Hollywood Boulevard, where "Citizen Kane" had its world premiere and a generation of children have watched actors dressed as Disney characters cavort onstage, is for sale. Source: L.A. Times - Business | 17 Sep 2008 | 7:00 am Is the U.S. going overboard on bailouts?Industry and government officials say the handouts are cheaper in the long run than doing nothing. But critics say they encourage bad behavior by removing the consequences.How far will the bailout binge go? Source: L.A. Times - Business | 17 Sep 2008 | 7:00 am As Bank of America grows, so do concernsIts recent acquisitions have created a financial powerhouse. Is such a vast concentration of wealth and power in the best interests of consumers?I have seen the future, and it is Rollerball. Source: L.A. Times - Business | 17 Sep 2008 | 7:00 am Oil drops further; gasoline prices see post-storm surgeCrude nears the $90 level. For motorists in some U.S. areas, pump prices hit $5 a gallon.Oil prices took another swan dive Tuesday, falling more than $4 a barrel to flirt with the $90 threshold. Source: L.A. Times - Business | 17 Sep 2008 | 7:00 am NBC's Ben Silverman has been hit and missThe fall season will help decide the programming chief's future at the network.Ben Silverman, NBC's chief programmer, has described himself as a "next generation, rock star" television executive. Source: L.A. Times - Business | 17 Sep 2008 | 6:20 am Currency: Dollar recovers but gives up some gainsThe New Zealand dollar rose today but gave up some of the gains by the close as events in the global financial crisis dominated trading. Around 5pm today the NZ dollar was buying US65.99c, having dropped to around US64.90c yesterday...Source: New Zealand Herald - Business | 17 Sep 2008 | 5:32 am House passes drilling billThe House of Representatives on Tuesday approved an energy bill that could clear the way for more drilling in the United States, as the Democrats who control Congress yielded to pressure from Republicans on the issue.Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 2:16 am US govt throws a lifeline to AIGThe United States government has acted to curb Wall St's financial meltdown. In a bid to save financial markets and the economy from further turmoil, the US government agreed today to provide a US$85 billion emergency loan to rescue...Source: New Zealand Herald - Business | 17 Sep 2008 | 2:15 am Fed to lend $85 billion to AIG, take 80 percent stake (Reuters)
Source: Yahoo! News: Business | 17 Sep 2008 | 1:37 am Latest updates: Financial Turmoil14.55-TOKYO: Japan's central bank has injected an extra 2 trillion yen (US$18.9 billion) into money markets today to ensure liquidity as financial markets continue to assess the fallout from the demise of Wall Street giants Lehman...Source: New Zealand Herald - Business | 17 Sep 2008 | 1:30 am Global financial crisis: the view at homeMark Weldon, NZX chief executive, on One News On the possibility of a share market plunge on the NZX: "Our market doesn't have direct exposure to the US financial system. "Obviously global confidence is hurt a little bit,...Source: New Zealand Herald - Business | 17 Sep 2008 | 1:00 am SanDisk rejects Samsung's $5.85B bidRead full story for latest details.Source: Business and financial news - CNNMoney.com | 17 Sep 2008 | 12:55 am Trends & Innovations - TuesdaySpace-based solar power touted. Scientists are touting a first-of-its-kind experiment in long-range, wireless power transmission. They say it's a...Source: Investor's Business Daily: BUSINESS | 17 Sep 2008 | 12:51 am Business Briefs - TuesdayAdobe beats, raises Q4 guidance. The maker of design software said after the close that Q3 EPS rose 11% to 50 cents ex items, beating views by 4...Source: Investor's Business Daily: BUSINESS | 17 Sep 2008 | 12:51 am In Brief - TuesdayConstellation Energy Group, a utility, tumbled 36% to 30.75 on fears that banks may pull its credit lines. The cost to insure Constellation's debt...Source: Investor's Business Daily: BUSINESS | 17 Sep 2008 | 12:51 am Acquisition Gives Instant Boost To Package Maker's Bottom LineSometimes, patience and discipline pay off.Source: Investor's Business Daily: BUSINESS | 17 Sep 2008 | 12:51 am After The Close - TuesdayDARDEN RESTAURANTS (DRI), which operates the Olive Garden and Red Lobster chains, said Q1 EPS fell 16% to 61 cents ex items, meeting views. Sales...Source: Investor's Business Daily: BUSINESS | 17 Sep 2008 | 12:51 am Philip Macalister: What does the crisis mean for us?What does it all mean? I don't think anyone really knows what the crisis on Wall Street really means to investors in New Zealand at the moment. Everyone, whether they are a professional investor or the man on the street, is watching...Source: New Zealand Herald - Business | 17 Sep 2008 | 12:00 am Telecom HR boss leaves amid brother job queryTelecom's human resources director Trisha McEwan is leaving the company amid a controversy over the appointment of her brother Kevin Roberts to the board. The company said McEwan had signalled her intention to leave at a suitable...Source: New Zealand Herald - Business | 16 Sep 2008 | 11:04 pm Russian exchanges suspend trading as panic grips Moscow tradersRussia's stock exchanges suspended trading yesterday as panic selling sent the value of shares plummeting.Source: Latest Business News from Times Online | 16 Sep 2008 | 11:00 pm Wall Street turmoil changes campaign fortunes as Palin factor is devaluedJohn McCain embarked on a desperate – but defiant – damage-control exercise yesterday as he sought to justify his claim that despite violent convulsions in America’s financial markets the “fundamentals of our economy are strong”.Source: Latest Business News from Times Online | 16 Sep 2008 | 11:00 pm Rate cut hopes dashed as King predicts 5% inflationThe Governor of the Bank of England has dampened hopes of a cut in interest rates in the next few months, despite the market turmoil, as inflation hit a 16-year high of 4.7 per cent.Source: Latest Business News from Times Online | 16 Sep 2008 | 11:00 pm After Lehman Brothers: desperate City wivesMy nine-year-old asked me at breakfast on Monday morning: “What is the economy?” What a day to find out. I struggled to describe a kind of weaved knot in which every thread is connected to another thread, establishing clearly that we are all in this together. If you made a lot of money in the City, did you sew it up in a mattress? Buy a farm where you could live, grow your own food and educate your children yourself? Or did you invest it - in the City?Source: Latest Business News from Times Online | 16 Sep 2008 | 11:00 pm Adecco drops £1.3bn bid for rival Michael PageShares in Michael Page, the recruitment group, fell more than 20 per cent yesterday after Adecco, its Swiss rival, abandoned its £1.3 billion bid for the company.Source: Latest Business News from Times Online | 16 Sep 2008 | 11:00 pm The Remains of the 401(k) (SmartMoney Magazine)After having nearly a million in my 401(k) three years ago, I am down to $45,000. Where should I invest it? Also, should I accelerate my mortgage and reduce my 401(k) contributions?Source: SmartMoney.com | 16 Sep 2008 | 10:17 pm Five Best Cities for Job Hunting (Deal of the Day)Looking for work? These five cities are bucking the national trend, and hiring workers.Source: SmartMoney.com | 16 Sep 2008 | 10:04 pm Making customer service a tweetEven though they are relatively small in number, users of the Twitter online service are a powerful group. And companies looking to make quick contact with customers have taken notice. Jennifer Collins reports.Source: Marketplace | 16 Sep 2008 | 9:26 pm On world stage, wealth can be a curseThe United Nations General Assembly has quietly convened its annual session. Commentator Amity Shlaes says the explanation for who's friendly with the U.S. at the United Nations -- and who's not -- is often economic.Source: Marketplace | 16 Sep 2008 | 9:26 pm Rest of the world feels America's painThere's been a theory that the rest of the world's economies would keep growing even if the U.S. didn't. After a year of subprime mortgage mess, that theory doesn't appear valid. Kai Ryssdal gets the views of economics professor Robert Dunn.Source: Marketplace | 16 Sep 2008 | 9:25 pm What's president's role in tough times?Since the mortgage crisis has hit Wall Street, President Bush has said little and offered little involvement. But what difference can a president really make in economic times like these? Jeremy Hobson reports.Source: Marketplace | 16 Sep 2008 | 9:25 pm Will meltdown's impact hit Main Street?With the nation's biggest investment banks taking body blows and the world's biggest insurer on the ropes, it's not surprising people in the financial markets are a bit hysterical. But what about Main Street and regular people's livelihoods? Mitchell Hartman reports.Source: Marketplace | 16 Sep 2008 | 9:25 pm Who's next to fail in financial sector?Shares in the insurance conglomerate AIG took another dive amid rumors that the Fed's working on some kind of loan package. Meanwhile, mighty Goldman Sachs reported its biggest quarterly drop since it went public. Amy Scott has the roundup.Source: Marketplace | 16 Sep 2008 | 9:25 pm NZ shares firm after positive day on Wall StThe New Zealand sharemarket opened today's trading slightly lower, as turmoil continued throughout the global financial system. Throughout the day it has remained in positive territory, with the benchmark NZX-50 up 33 points to 3261...Source: New Zealand Herald - Business | 16 Sep 2008 | 9:00 pm Formula export inquiry highlights contamination fearsA Chinese businessman trying to buy 1500 tonnes of baby formula in Southland this year was so concerned the formula would be tampered with once it arrived in China that he insisted it be supplied in sealed 1kg containers. The unusual...Source: New Zealand Herald - Business | 16 Sep 2008 | 8:56 pm Peter Navarro Says Overseas ETFs Show Global RecessionSource: Bloomberg - All Podcasts | 16 Sep 2008 | 8:51 pm VIX Index of U.S. Stock Option Prices Retreats 4.4% to 30.30Source: Bloomberg - All Podcasts | 16 Sep 2008 | 8:41 pm London closes at lowest since June 2005Shockwaves from Lehman's collapse sent the FTSE 100 index sinking to its lowest close since June 2005Source: FT.com - US homepage | 16 Sep 2008 | 8:35 pm Fed decides to hold rates steadyThe Federal Reserve stumped experts today when it kept interest rates at their current level. After all that's been happening, the safe money was on an interest rate cut. Marketplace's John Dimsdale talks with Kai Ryssdal about the surprising decision.Source: Marketplace | 16 Sep 2008 | 8:33 pm Pumpkin Patch full year profits down 27.5pcChildren's clothing company Pumpkin Patch has posted a 27.5 per cent decline in full year net profit to $17.1 million. The company said today that its result was affected by higher interest charges, higher quota costs and a difficult...Source: New Zealand Herald - Business | 16 Sep 2008 | 8:30 pm Mack CounterattackIf there is one thing Wall Street doesn't need more of at the moment, it's surprises.Yet Morgan Stanley has jumped up to try to lighten the gloom on the Street, unexpectedly releasing third-quarter results a day earlier than scheduled. For its numbers showed that some people on Wall Street are still making money in these hard times. The firm's earnings easily topped analysts' forecasts, helping to buoy investor sentiment on a day when fears about a possible collapse of American International Group dominated. Morgan's results even managed to outshine those of Goldman Sachs, which earlier in the day said its quarterly profit dropped 70 percent. And they may diminish concerns that investment banks are an endangered species after the collapses of Bear Stearns and Lehman Brothers and the sale of Merrill Lynch. For the quarter, Morgan Stanley reported net income of $1.42 billion, or $1.32 per share, down 7 percent from $1.54 billion, or $1.44 per diluted share, in the quarter a year earlier. Net revenue, or revenue minus interest expenses, rose 1 percent, to $8 billion. Morgan Stanley pointed to strong gains in its prime brokerage business, which services hedge funds, and in trading for the firm itself. It took net write-downs of $640 million on its trading positions. Morgan Stanley said it ended the quarter with average total liquidity of $175 billion. "We have continued to actively reduce our legacy positions and carefully manage our risk, capital, and liquidity," John Mack, Morgan Stanley's chief executive, said. Related Links Mark-to-Model on Wall Street: The Numbers Wall Street Requiem Mack Crawls Back Source: Portfolio.com: Top 5 | 16 Sep 2008 | 8:30 pm NZers have 'little to fear' from AIG situationA finance commentator feels New Zealanders will have little to fear from the possible collapse of insurance giant AIG. It is in a race against the clock to find a multi-billion-dollar infusion in order to stay afloat. Commentator...Source: New Zealand Herald - Business | 16 Sep 2008 | 8:20 pm Fed holds rates amid turmoilThe Federal Reserve kept interest rates at 2 per cent in spite of the financial hurricane raging in global markets. Its decision to hold firm against a rate cut came as the turmoil unleashed by the failure of Lehman Brothers and fuelled by the crisis at AIG again convulsed markets and Morgan Stanley pre-announced third-quarter earnings as the price of credit default swaps soaredSource: FT.com - US homepage | 16 Sep 2008 | 8:15 pm Lehman's Malvey Calls Drop in Stocks `Cathartic Moment'Source: Bloomberg - All Podcasts | 16 Sep 2008 | 8:07 pm Stiglitz Says Iraq `Surge' Not Success That Bush ClaimsSource: Bloomberg - All Podcasts | 16 Sep 2008 | 7:56 pm Best Buy 2Q profit slides 19 percent (AP)
Source: Yahoo! News: Business | 16 Sep 2008 | 7:26 pm Ryding Says U.S. Banking Crisis Greatly Affects Global EconomySource: Bloomberg - All Podcasts | 16 Sep 2008 | 6:54 pm The Song Remains the SameStocks took a nosedive after the Fed said it would hold steady on interest rates, but they soon returned to positive territory in a move that reflects the volatile moods on Wall Street.Bernanke and company voted to leave short-term interest rates unchanged at 2 percent. Although most economists had been expecting that decision, there was a swell of hope that it might cut rates instead at the 11th hour. For investors, no such luck. The Fed's statement was chock-full of otherwise downbeat and obvious observations: weak labor market, strained financial system, slowing economic growth, tight credit conditions, weak housing, slowing in export growth, and high inflation. The Fed said it would continue to monitor developments and act as needed. The decision to leave rates unchanged had the unique distinction of being unanimous among the 10 members. New York Fed governor Tim Geithner was absent from the meeting due to the fact that he's at the center of the crisis currently playing out on Wall Street. The Fed injected $70 billion into the banking system today, on top of another $70 billion yesterday. The Dow Jones industrials, which had been up about 30 points prior to the announcement, fell by more than 100 soon after it was released. By leaving rates unchanged, the Fed is signaling that it hopes the market will work through this current crisis instead of incurring systemic risk that would require economic policy to fix. "Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth," the statement read. Whether or not this turns out to be true is anyone's guess. Related Links Incentives for Inflation The Man Who Saved (or Got Suckered by) Wall Street Why the Fed Won't Raise Rates to Prick Bubbles Source: Portfolio.com: Top 5 | 16 Sep 2008 | 6:30 pm McTeer Doubts Fed Funds Rate Will Fall Below 2 PercentSource: Bloomberg - All Podcasts | 16 Sep 2008 | 6:17 pm Dodge's Challenger's 425 Horsepower Muscle Car, RevisitedSource: Bloomberg - All Podcasts | 16 Sep 2008 | 4:36 pm Drinking Wine From Machines at Time Warner Center's CloSource: Bloomberg - All Podcasts | 16 Sep 2008 | 4:35 pm FDA defends plastic linked with health risksWASHINGTON -- Federal regulators today defended their assessment that a chemical widely used in plastic baby bottles and in food packaging is safe, even as the first major study of health effects in people linked it with possible risks for heart disease and diabetes.Source: L.A. Times - Business | 16 Sep 2008 | 3:59 pm Central banks fail to lift marketsA slide in global financial markets continues for a second day in spite of the injection of billions of dollars of extra liquidity. Fears about the exposure of banks to the collapse of Lehman Brothers sends overnight bank borrowing costs soaringSource: FT.com - US homepage | 16 Sep 2008 | 3:25 pm Apple Shares Are Removed From Goldman's `Conviction Buy' ListSource: Bloomberg - All Podcasts | 16 Sep 2008 | 1:49 pm A.I.G. on the BrinkForget about Wall Street or some mortgage lender—American International Group is the mother of all financial crises. If this global colossus collapses, the reverberations will drown out all other failures. With a $1 trillion balance sheet, this is the Big One. Amid the crisis, A.I.G.'s insurance business has been solid, and the fate of those businesses will be largely determined by the state regulators that have power over them. Michael Lewitt in an op-ed in the New York Times outlined the doomsday scenario: “If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions. This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow.” The strains on the global financial system caused by the crisis at A.I.G. and the collapse of Lehman Brothers were evident early today. The cost of cash rose as overnight money-market rates spike up. The Federal Reserve Bank of New York, following moves by the European Central Bank and the Bank of England, pumped money into the system today to free up liquidity. In cutting the ratings on A.I.G., the agencies cited concerns that the continued deterioration in the housing market was having an impact on A.I.G.'s capital and liquidity position. Clock Ticks for A.I.G. World Turned Upside Down How Much Did Hank Greenberg Lose Today? Source: Portfolio.com: Top 5 | 16 Sep 2008 | 12:00 pm Salvaging the WreckageMore of Lehman Brothers, and more of its employees, may be able to remain in business than was the case at Bear Stearns. Barclays, which has run into its own trouble as this credit crisis has unfolded, had already raised capital from sovereign wealth funds which it planned to use on acquisitions. And by acquiring only Lehman's assets, and none of its liabilities, it could avoid shareholder criticism about its own bloated balance sheet. Barclays' tier 1 capital ratio trails behind its U.K. competitors and it has made it clear that selling some of its more toxic assets remains a priority. The Deal.com notes: "A Chapter 7 filing for the whole Lehman empire would have resulted in a trustee-supervised liquidation, with little ability to maneuver for better deals. Under Chapter 11, Lehman as debtor-in-possession can supervise its own sales." The End of Lehman Wall Street Huddles for Safety Parsing Bank of America: Crisis Is Our Friend Source: Portfolio.com: Top 5 | 16 Sep 2008 | 11:30 am
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