Monday, September 23, 2013

Today in the Financial Crisis, Tuesday September 23, 2008: Solar Wind Hits 50 Year Low

Credit was drying up as even the giants were having trouble getting bank loans or rolling commercial paper.
(GE was within a week of insolvency but we didn't know that)
Oh, and just for grins and giggles, the sun was acting very screwy.

From the Los Angeles Times:
BofA won't boost loans to McDonald's
AIG investors might fight takeover
Rescue plan sparks fallout
Race is on to bail out bailout plan
The Dow Jones Industrial Average was down another 161.52 on top of the 372.75 it had dropped on Monday.

What we were posting:
4:53 a.m.
WaMu bidders push for government-assisted sale. And: Are the Canadians Coming? (WM)
5:08 a.m. 
MEDIA ADVISORY : M08-176 NASA To Discuss Conditions On And Surrounding The Sun
NASA will hold a media teleconference Tuesday, Sept. 23, at 12:30 p.m. EDT, to discuss data from the joint NASA and European Space Agency Ulysses mission that reveals the sun's solar wind is at a 50-year low....
8:16 a.m. 
On Leverage, Investment Banks and Incompetence
"Don't kick a guy when he's down?
Shit, that's the best time."

-a trader to your correspondent, some years ago.

As this story from the New York Sun pointedly states:
...The SEC allowed five firms — the three that have collapsed plus Goldman Sachs and Morgan Stanley — to more than double the leverage they were allowed to keep on their balance sheets and remove discounts that had been applied to the assets they had been required to keep to protect them from defaults....
The most leveraged, Bear Stearns failed first. The second most leveraged was Lehman.
On last weekend's McLaughlin Group, Mort Zuckerman identified* the leverage of the investment banks as half the problem (see below).

From Infectious Greed:
What is truly disgraceful is that investment banks could only manage returns on equity of 15-25% with a balance sheet that was often leveraged to the sky.
-- Niels Jensen and Jan Wilhelmsen, of Absolute Return Partners
Another view of the average Wall Streeter: wonder so many marginal people make money on the street - it is like the special olympics out there.
- anonymous commenter at DealBreaker
12:12 p.m. 
Lula, Fernandez May Mock U.S. Market Turmoil at UN
``I nationalize strategic companies and get criticized, but when Bush does it, it's OK,'' Chavez said on weekly television program Sept. 21. ``Bush is turning socialist. How are you, comrade Bush?''...MORE 
12:44 p.m. 
Should we rebuild Galveston?
2:07 p.m. 
"We're From the Government and We're Here to Help"