Home > Jay Bookman > Archives > 2008 > September > 14 > Entry
DEL.ICIO.USCat 4 hurricane heads for Wall Street
The Atlanta Journal-Constitution
The next 24 hours are going to be very interesting in the financial markets, to say the least. Lehman Bros., the nation’s fourth largest investment bank, is going down the tubes. The federal government is refusing — appropriately — to bail it out, and major private financial institutions have reportedly balked at trying to save it, afraid of being dragged down into the whirlpool themselves.
Alan Greenspan sounds downright grim:
“First of all, let’s recognize that this [the financial crisis] is a once-in-a-half-century, probably once-in-a-century type of event…,” Greenspan says. “There’s no question that this is in the process of outstripping anything I’ve seen, and it still is not resolved and it still has a way to go.
“I can’t believe we could have a once-in-a-century type of financial crisis without a significant impact on the real economy globally, and I think that indeed is what is in the process of occurring,” Greenspan said.
The AP reports that “Lehman’s collapse would have an incalculable impact on the financial markets, and would likely have a domino effect, with Merrill Lynch and the American International Group (AIG) widely cited as firms most at risk.”
Bloomberg News reports that “the government is probably concerned that panic may spread to other financial institutions, Ladenburg Thalmann & Co. analyst Richard Bove said. American International Group Inc., the largest U.S. insurer, and Seattle-based lender Washington Mutual Inc. each plummeted in New York trading last week on speculation about their financial health.
In London, SkyNews — a Rupert Murdoch outfit, so take it with a grain of salt — posts a headline reading “Bank Collapse Catastrophe Warning: The possible collapse of one of world’s biggest investment banks could be “catastrophic” and lead to the “implosion” of the banking sector, Sky sources say.”
Comments
By Gwinnett Liberal
September 14, 2008 6:46 PM | Link to this
I’ll bet if you ask McCain about this, he’ll say something about being a POW… .
He’s getting to be a lot like Guliani - a noun, a verb, and the Hanoi Hilton.
By AJC/DNC Management
September 14, 2008 7:03 PM | Link to this
Aahhh, yes, it is Christmas Eve at thee Kookman household and Jay is sitting beneath thee tree with cookies and milk in hand.
By the way, how many times in one election cycle can the libs say “could” and “maybe.”
Somebody call Guiness, I believe we have a record here.
By AJC/DNC Management
September 14, 2008 7:09 PM | Link to this
And as far as thee impending Doom and Gloom goes, allow me to borrow a phrase from King Solomon, and it is also a good cure for thee depression the libs are suffering from, This too shall pass.
Like on November 4th with the demise of King Dimwit and the entire dhimmocrat party, when cautious investors pull the hidden cash back out from under thee mattress.
And they get the party started.
By lisa w
September 14, 2008 7:36 PM | Link to this
So what if the speculators collapse.
I don’t own anything-buy organic seeds and start planting if you want food next year.
By TW
September 14, 2008 7:42 PM | Link to this
Don’t worry about it, ‘w’ went to Yale…and he has ‘resolve’…no worries…
By Taxpayer
September 14, 2008 8:00 PM | Link to this
Jay,
I think we have forgotten about the Great Depression. I hope we don’t have to re-learn it the hard way but who really knows. So much of what happens depends on human behavior — unpredictable human behavior.
By Bud Wiser
September 14, 2008 8:02 PM | Link to this
“By Midori September 14, 2008 5:09 PM | Link to this ….I didn’t think it possible, but you become more disgusting in your lie-based reality as each day passes. Last time I looked, Bill Clinton wasn’t running for either President or Vice President…..”
Look in the mirror idiot every time you talk about George Bush in this years election, then read (if you can) what you wrote here.
You stupid liberals can’t even sort out your own ignorance, and want everyone to believe what you say is true just because you say it. Go suck your toes.
Obama/Biden ‘08 - making it easy to be stupid
By RW-(the original)
September 14, 2008 8:18 PM | Link to this
Jay B,
One of the few things you and I philosophically agree on, as long as you’re being honest instead of politically expedient, is that our government shouldn’t be in the business of bailing out failure.
A careful examination of these companies to see how much government “fixes” caused them to fail would be instructive though.
By Dusty
September 14, 2008 8:26 PM | Link to this
Well, Jay, at least you stopped running down Sarah Palin this time. One baby step forward.
Now we hear Cat 4 hurricane heads for Wall Street. One baby step backwards.
Happy Hour had to be a bust for you today, Bookman. All those teary eyed libs sitting around crying “The sky is falling!” Musta been like one of those AJC Bored Meetings.
By JAY BOOKMAN
September 14, 2008 8:37 PM | Link to this
RW, why do you reflexively try to attribute large-scale failure in private enterprise to government?
Somebody on this blog the other day mentioned Schumpeter and creative destruction — it’s a natural state of affairs in free markets. Yet you and others are insistent that it must be the fault of gov’t somehow, even if you don’t quite know how.
By RW-(the original)
September 14, 2008 8:47 PM | Link to this
Jay B,
The enterprises that seem to be failing are some of the most interfered with by government. When Joe’s Fish House fails I rarely consider government having anything to do with it.
Did you miss the part where I said it would be instructive to study whether or if government had a hand in the failure?
By getalife "whiners"
September 14, 2008 8:55 PM | Link to this
Wow, w told the truth.
Wall Street got drunk and we all know, you pay later after getting wasted.
What is the term for government bailing out corporate with borrowed money?
Fiscal insanity? Like listening to Greenspan, the architect of fiscal insanity.
So who had the audacity to predict this “Once In A Century Event”? Paul Krugman, a liberal.
I think I will listen to Krugman instead of Greenspan.
By Fast One
September 14, 2008 8:56 PM | Link to this
“Capital must protect itself in every way… Debts must be collected and loans and mortgages foreclosed as soon as possible. When through a process of law the common people have lost their homes, they will be more tractable and more easily governed by the strong arm of the law applied by the central power of leading financiers. People without homes will not quarrel with their leaders. This is well known among our principle men now engaged in forming an imperialism of capitalism to govern the world. By dividing the people we can get them to expend their energies in fighting over questions of no importance to us except as teachers of the common herd.” - JP Morgan
By AJC/DNC Management
September 14, 2008 9:01 PM | Link to this
I like this, the capitalists know exactly how to get you to sell your assets cheap, and sure enough, here are the liberals in a full blown panic.
Tomorrow will be a very productive day.
By Taxpayer
September 14, 2008 9:05 PM | Link to this
I just cannot imagine leveraging one’s assets to such extents without having some form of verifiable backstop to prevent unplanned de-leveraging. The AIGs, Moodys and others could not even come close to functioning as needed and yet no one amongst all the major banks and financial institutions could see this coming. Their autopilots were asleep at the wheels while their management was out, on the greens, trying to figure out how they were all going to spend their bonuses and stock options. Now, we the people will pay the price of their incompetence yet again.
By getalife "whiners"
September 14, 2008 9:26 PM | Link to this
Yeah, the headlines are up.
Bad day tomorrow.
By Mike
September 14, 2008 9:32 PM | Link to this
“By Gwinnett Liberal September 14, 2008 6:46 PM | Link to this I’ll bet if you ask McCain about this, he’ll say something about being a POW… .
He’s getting to be a lot like Guliani - a noun, a verb, and the Hanoi Hilton.”
Apparently you don’t bother to actually listen to anything the guy actually says. Instead you just bleat out liberal bumper sticker slogans to hide your own ignorance.
By Dusty
September 14, 2008 9:43 PM | Link to this
If anybody mentions Merrill Lynch again I am going to personally whack them on the head. That’s my “baby” so leave it alone.
Depression! Pftt!! Imperialism of captalism! Pftt! Divide the people!!pfttt!! teachers of the common herd!! Pfftt!! J P Morgan is dead and gone!!
Why don’t you economists go to bed and fix Wall Street tomorrow? It will still be here and by then Bookman will be saying “Bush did it!” Luckovich will be sketching another reckless cartoon of Bush burning bonds on Wall Street.
These people are SOOO predictable.
By JAY BOOKMAN
September 14, 2008 9:44 PM | Link to this
Right, Management.
Because Henry Paulson and all those guys on Wall Street WANT a panic selloff that will help bring down other financial firms.
Sometimes I seriously wonder about you… for a few seconds, before I go onto other things.
By AJC/DNC Management
September 14, 2008 9:48 PM | Link to this
Tomorrow I sell your 401K for a profit.
Wonder about that.
By Taxpayer
September 14, 2008 9:52 PM | Link to this
Merrill Lynch is a has been — Dust[y] in the Wind. That’s all it is, just Dust[y] in the wind.
By AJC/DNC Management
September 14, 2008 9:59 PM | Link to this
Check it out, tomorrow first thing there will be thee massive sell off.
That is when ADM will buy.
Shortly there after, you will see an uptick.
Guess what I will do then.
Say buh bye to your financial security.
Perhaps we will eat atop the Westin tomorrow.
By getalife "whiners"
September 14, 2008 10:05 PM | Link to this
Talk about bad timing.
This is would make a good ad on McLiar being out of touch and dead wrong again.
By Dusty
September 14, 2008 10:08 PM | Link to this
Dear Taxacologist,9:52
I’ll have you know that I have placed every form of verifiable backstop to prevent unplanned de-leveraging.
Not only that, I have raised the levees and added sandbags. And you thought I wasn’t ready!!
A pox on you! Merrill Lynch is MY BABY!!! (And Cynthia McCain says she will back me up if I need a little CHANGE!! So there!)
By getalife "whiners"
September 14, 2008 10:13 PM | Link to this
Dusty,
Actually, w warned this would happen.
“Wall Street got drunk”.
He also warned about the high price of oil.
“We are addicted to oil.”
Its painful to listen to his speeches but you have to if invested.
Looks like I picked the right time to get out and will wait for fiscal sanity to get back in.
Andy will help Wall Street all by himself.
Don’t ya know?
By getalife "whiners"
September 14, 2008 10:16 PM | Link to this
Dusty,
Its Bank of America’s baby now.
By Taxpayer
September 14, 2008 10:19 PM | Link to this
ADM and the financials! Has wall street decided to plow everything under and plant soy beans.
1) BAC buys Merrill Lynch and Merrill stock rallies
2)Lehman finishes it stock price drop to
3)AIG starts dumping equities in order to raise much needed capital. The stock price ends the day down another 5%.
4)The Fed steps in and starts taking distressed equities as collateral
5)The major indices drop between 1 and 2% for the day.
Hey, I could be right or I could be wrong. Then again, that’s what the markets are all about — gambling.
By sunshine and thunder
September 14, 2008 10:22 PM | Link to this
JAY
It must please you no end that all of this is happening on W’s watch. Do you also do back flips of joy when things go badly in Iraq?
We have had 6 years of rising employment, higher GDP growth, higher tax revenues and all after a tax cut.
The Community Reinvestment Act of 1977 forced financial institutions to find ways to fund sub par loans in order to prevent being held up by GOVERNMENT from doing business.
Hey, they figured out you could sell this stuff and the market was robust. You could sell it anytime so why not keep some of it on the books - nothing else earned the returns these things did.
What we’re seeing is the result of the Fed stepping in for years and years when financial excesses overcame the system. Remember the term “the Greenspan put”? It was very real.
Now, it seems, not even the Fed can broker the deal. This may be the last of the mega credit bubble that has risen and popped every few years or so. This was Greespan’s baby. Now Bernanke has to pick up the pieces and put the house of cards back together - hopefully with some cement.
By Taxpayer
September 14, 2008 10:27 PM | Link to this
That’s strange. I’ve never had a piece of a sentence dropped before. Anyway, I predicted Lehman would continue its drop to less than $1 as we wait for announcement of pending bankruptcy.
By getalife "whiners"
September 14, 2008 10:46 PM | Link to this
Hey, I found “the private”
Semper Fi.
By Dusty
September 14, 2008 10:47 PM | Link to this
getalife whiners @10:16
Hey, What’s Bank of America doing with my BABY? That’s kidnapping!!
I’ll have to go down tomorrow and get this all straightened out.
Can’t you ECONOMISTS do anything right??? Bush tried to tell you and you would not listen. Don’t blame Bernanke. He’s kinda cute. I can tell he’s not crooked.
By AJC/DNC Management
September 15, 2008 5:45 AM | Link to this
New Jersey is in play:
“I’m very comfortable being associated with McCain-Palin,” he says. “They doubled down on the reformist, anti-pork message. Sarah Palin killed the Bridge to Nowhere, Frank Lautenberg voted for it.” Even though Garden State taxpayers get back just 55 cents for every dollar they give Uncle Sam, Lautenberg is “as enthusiastic a proponent of pork as Ted Stevens and Bob Byrd,” according to Zimmer. “I don’t want to play the pork-barrel game better,” Zimmer says. “I want to shut it down.”
Because the Repugs are not hiding from themselves anymore.
By AJC/DNC Management
September 15, 2008 5:49 AM | Link to this
OF COURSE, DEMOCRATS and cultural lefties, since the Sarah phenomenon exploded on the national scene, have spent a good deal of time either on their fainting couches or beavering away passing on Sarah groin shots from the liberal blogosphere. The “Slime Sarah” movement is as active in Florida as it has been across the country. But it hasn’t gotten any more traction here than it has elsewhere.
November is going to be bad month for the Urinalists.
By AJC/DNC Management
September 15, 2008 5:52 AM | Link to this
WHEN OBAMA started slamming Palin, however, two anonymous Democratic strategists told Nedra Pickler of the Associated Press that this task should be assigned to Obama’s running mate, Sen. Joe Biden. But Biden, meanwhile, was busy telling a New Hampshire audience that “quite frankly [Hillary Clinton] might have been a better pick than me.”
By Gigi
September 15, 2008 6:03 AM | Link to this
I’m glad that the Republicans got caught with their hands in the cookie jar this time, because our current crisis has at its roots some very bad conservative economic policies which have been passed off as unquestionable financial law for too long, when in fact, a quick study of history could have shown these very ideas have failed us before.
Speaking of course about the ‘free market will police itself’, corporate welfare, deregulation of everything, privatization, drown it in the bathtub ethos.
Jay, what you have to understand about the Republicans who post is that they are acting more as dogs who have been trained by RW radio to repeat random gibberish on command than as free-thinking individuals. Don’t try to reason with them. They are essentially driven by emotion, not logic.
I’m reminded that music also devolved from complex but rather boring chants to more exciting but still complex symphonies to easy 3-chord hooks and catchy lyrics that cajole the listener into feeling happy or sad or angry.
If you want to reach some of these people, you have to play to those same easy emotions. Tell them how they should feel about a particular issue and then repeat your talking point as if it’s the chorus of Rhianna’s latest hit.
By AJC/DNC Management
September 15, 2008 6:58 AM | Link to this
Uh-oh:
WHILE campaigning in public for a speedy withdrawal of US troops from Iraq, Sen. Barack Obama has tried in private to persuade Iraqi leaders to delay an agreement on a draw-down of the American military presence.
“He asked why we were not prepared to delay an agreement until after the US elections and the formation of a new administration in Washington,” Zebari said in an interview.
Though Obama claims the US presence is “illegal,” he suddenly remembered that Americans troops were in Iraq within the legal framework of a UN mandate. His advice was that, rather than reach an accord with the “weakened Bush administration,” Iraq should seek an extension of the UN mandate.
By AJC/DNC Management
September 15, 2008 7:09 AM | Link to this
Recalling how he offered to publicly defend McCain against character attacks during the 2000 primary, Biden told a rally that his friend McCain nonetheless “was then and is now dead wrong … about what we should do as a nation.”
The crowd of 1,100 — a count verified by the police department — whooped and clapped.
I sure would like to see a tape of this supposed “whooping and clapping,” because if it is true and given the total lameness of what Hair Plug’s said, then this crowd was drunk.
By jimw1942
September 15, 2008 1:53 PM | Link to this
It is sort of odd that Alan Greenspan, who presided over the Fed for so long, expresses such a detached view of the situation. Perhaps his inattention and laisse faire approach to the economy was partly to blame for the culture of greed which led to the chaos in our financial system.
By Marshall
September 15, 2008 2:06 PM | Link to this
This from 09/13/08.
John McCain’s son, Andrew McCain, was the former director of a bank that was closed by the federal government yesterday, according to reports.
The FDIC closed the Silver State Bank of Nevada on Friday afternoon and is trying to arrange a takeover by Nevada State Bank of Las Vegas in time for Monday.
Andrew McCain “sat on the boards of Silver State Bank and of its parent, Silver State Bancorp, starting in February but resigned in July citing ‘personal reasons,’ according to the Associated Press. McCain left just over a month before Silver State went belly up.
The AP reports that Silver State’s failure was caused by “poor-quality loans primarily related to real estate development,” and that it will cost the FDIC (funded by American taxpayers) $450-550 million.
Bloggingstocks.com couldn’t help but refer to the Keating Five scandal in their coverage of the current story…“Andrew is following in his father’s footsteps. John McCain protected Charles Keating from government regulators because he had arranged a real estate deal for his second wife, Cindy. The failure of Keating’s S&L cost taxpayers $3.4 billion. Taxpayers got off relatively cheaply bailing out Andrew’s former colleagues.”