BREAKING NEWS! Mega Merger on Wall Street just announced!!!
In a surprise move, a slew of Wall Street firms brought together by the Fed and the US Treasury Department originally to discuss bailing out Lehman Brothers, decided to merge with each other instead.
The new entity, which Wall Street sources said was to be called CitiLehmanUnitedBearStearnsJPMorganGoldmanSachsAIGMerrillWaMu - FannieFreddieUnionCountrywideKravitz, will trade on the Exchanges under the shortened acronym, CLUSTERF*CK.
"I am pleased that a result of our discussions this weekend has been the formation of one, new, combined and formidable world class investment bank," said US Treasury Secretary Hank Paulson
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Analysts said the new mega-investment bank would have a net asset value, after writedowns, of $2.48.
Comments
Chaos on Wall Street
Special Session breaks down
I got a bad feeling
I just heard that these asshats created new mathematical models where they had 40 dollars in loan for 1 dollar in deposits, claiming this was going from history.
Now I'm good at math. I'm sure I can come up with a mathematical model which will show you the laws of supply and demand will simply diverge and I can surely create a mathematical model which shows one can create fictional money, not a problem, and be fine.
O boy, tomorrow's gonna be fun ....
n/t
Dr. Doom
is talking about a run on investment firms. I think we may see the biggest one day stock market drop in history.
I don't think the stock market will crash
Although the financial sector may get vaporized.
There is no reason for Sears or JCPenney or Pep Boys or Starbucks or Apple to crash. Remember my diary from a couple of months ago entitled "Neutron Bomb over Wall Street"? Well, that neutron bomb just exploded.
A New Mathematical Risk Model - FUBAR
FUBAR is a new mathematical model, based on vector calculus and non-linear differential equations, along with vector spaces as in way out of the stratosphere....which shows very clearly one can blow smoke and still have their head up their ass.
Book not available yet
But the title says we must read it and review it.
Bailout Nation! How Easy Money Corrupted Wall Street and Shook the World Economy.
The dollar is tanking too.
Yahoo finance, their front page looks like spin city. Oh, they have come up with a plan to reassure the markets.
Interim rule
Credit slips (see middle column) has jumped on something I thought was funky also, a hastily Fed issued interim rule:
observation
Has anyone noticed of such a major crisis that during this entire general election season, it's all barely been mentioned? Isn't that pathetic? We might hear a few token phrases, that's about it.
I've noticed
The candidates are going to ignore it as long as possible. The first one that proposes anything will be attacked.
Freeze on Foreclosures
You're right. Hillary took it on and was viciously attacked, but I found that impressive that she did talk about it.
That remark is more telling than you might think
The politicians aren't talking about this "major crisis" exactly because so far it has been contained to Wall Street, and hasn't significantly impacted Main Street.
The GOP talks about "drill, drill" because $4/gallon gas impacts Main Street. The Dems are talking about a "second stimulus package" because inflation in the face of stagnating wages impacts Main Street.
If every single Wall Street investment house went belly up by tomorrow (which actually might not be that much of a hyperbole, come to think of it ...), would Main Street care? So long as their IRAs and mutual funds were safe, probably not.
foreclosures
That's on main street and neither of them have barely mentioned it. Then....401ks.
First Stimulus Didn't Work - Follow Keynes 1933 Advice to FDR
Keynes told FDR in 1933 to borrow and expand the deficit to 12 percent of GDP. The 1934 spending was $3.4Fillion in a $39Billion Economy - the extra spending was $1.7Billion - a 50 per cent increase in the budget but 4 percent of GDP.
We probably need a similar size stimulus now to stop the meltdown. Any thoughts on the size of the stimulus?
FDR wrote about Keynes in a letter that 'I didn't understand one thing that man said.'
Burton Leed