In the previous ten days:
- Fannie Mae and Freddie Mac were placed into conservatorship on September 7, 2008
- Merrill Lynch agreed to be acquired by Bank of America to avoid a net cap shutdown on September 14, 2008
- Lehman Brothers filed their bankruptcy petition on September 15.
- AIG became a 79.9% subsidiary of the U.S. Treasury on September 16
The Next Shock to the Economy
Absolutely on the money.
Well, us and ONN .
But, as I've noted elsewhere regarding that week, it wasn't all fun and games:
The night before, Sunday Sept. 14, it was apparent that Lehman would fail.We had adopted as our theme song the Ramones "I Wanna Be Sedated".
I had been sleeping in the office since Thursday and getting an awful lot of emails from Washington Mutual depositors. I had to go home.
It would have been depressing if it hadn't been so nuts...
One of the younger folks thought this would be funny:
Oh yeah, one other thing. From September 20th, 2008:
American Taxpayer on the Hook for $1 Trillion of Banks Non-, Mis- and Malfeasance. Plus: Music to Hunt Bankers By
It appears there will be a decade long wealth transfer from savers to bankers. To reliquify the big banks balance sheets, the powers that be will let the banks borrow cheap from the Fed or at artificially low shorter term rates, then turn around and lend at higher rates to the Treasury. There is probably a carbon trading angle here too*. You just watch.The U.S. lost its triple A credit rating after the close on Friday August 5, 2011. We posted on it over the weekend with a helpful pre-market roundup on Monday the 8th:
It wasn't hard to add up how much the taxpayer would be stuck with, even I could do it:
...The big losers are the American taxpayers who may be on the hook for a Trillion dollars and who may see their government lose its AAA credit rating, with the increased borrowing costs that implies....
Roundup: What Will the Markets Do Weekend
In ascending order of lunacy:The DJIA only dropped 634.76 points (-5.55%) that Monday, not enough for the circuit breakers to kick in.
Markets: What to Expect Monday Morning
The decade of wealth transfer is up in four months,