Lehman Bros. files for Chapter 11

[Kestastrophe]

http://biz.yahoo.com/ap/080915/wall_street.html
WOW

And the sick part is the CEO had an opportunity to sell off at least parts of the company (and possibly its entirity) to private equity firms awhile ago. I wonder what the FED will do now with one of the largest investment banks in the US in bankruptcy

[AdmiralViscen]

Sarah Palin is gonna sort all this shit out, relax

[Bloodwake]

Sarah Palin is gonna sort all this shit out, relax

lolz

[ShogunOfFear]

The government shouldn't do anything.  Bad businesses are supposed to fail.

spoiler (click to show/hide)

Why didn't the feds bail out the Sega Dreamcast?

[close]

[The Fake Shemp]

SARAH PALIN WHERE R U?

[Kestastrophe]

Oil was down about $5 a barrel last I checked.

[Beardo]

bailouts

[Bocsius]

Oil was down about $5 a barrel last I checked.

It is nice how the cost of gas moved up in lockstep unison with the price of a barrel of oil, but now that oil has dropped about a third from its highs, the cost of a gallon of gasoline has only moved about 10% (in my area). This, of course, was before the Ike overreaction this past weekend.

Anyway, back on topic, I was lurking the thread last night on that other board and checking the news wires with morbid curiosity. If I was any smarter about finance, I would probably be scared to death.

[Kestastrophe]

bailouts

In general I agree, but the loss of liquidity from the loss of a AIG or Lehman type of firm, that has such a huge stake in the market presents alot of exposure to the rest of the market. Like Cohen said, is has the potential to be a meltdown of epic proportions. I was reading the Greenspan biography by Bob Woodward and it sounds like the FED did alot of this before, it was just done under the table or behind closed doors (i.e. guaranteeing the assets of a fledgling company without due diligence, just to preserve liquidity).

I kind of think that Fannie and Freddie were doomed from the start. They were inexplicitly guaranteed by the government, but still remained a publicly traded company. What incentive is their to please shareholders when the government has your back?

[Great Rumbler]

"Looks at all this money!! Hey, let's give out loans to people who won't be able to pay us back!"

*Later*

"Hey, what happened to all the money?!"

[siamesedreamer]

AIG (the world's largest insurance company) needs a $75 billion capital infusion to keep operating.

[Human Snorenado]

The fundamentals of the economy are sound!

[y2kev]

It's almost inconceivable to think about the sums of money being tossed around now. I thought it'd be funny if the internets staged a hostile takeover of Lehman for the lulz purposes (because the stock is embarrassing) but then I realized you'd still need 80 million dollars. 80 fucking million dollars.

To realize you are suddenly short 75 billion cause your balance sheet is a disaster is almost unbelievable. Almost.

[Kestastrophe]

AIG (the world's largest insurance company) needs a $75 billion capital infusion to keep operating.

Apparently the state of NY has offered AIG $20M, not sure of the specifics. Also read that the fed is orchestrating talks between Golmann and AIG

[y2kev]

AIG (the world's largest insurance company) needs a $75 billion capital infusion to keep operating.

Apparently the state of NY has offered AIG $20M, not sure of the specifics. Also read that the fed is orchestrating talks between Golmann and AIG

20 million? 

And where the hell is Goldmann getting money from now? They're next!

[Van Cruncheon]

ms. nanny state, why didn't you tell me this trickle-down business would taste like diarrhea?

that's the spirit of the free market shitting its pants, dear. remember when uncle ronny touched you in the bad place in the 80s? this is what happens when you keep going back to the woodshed!

[Van Cruncheon]

goldman-sachs and morgan stanley have much, much more diversified portfolios. they had profitable quarters, even as their stock took a hit fom the inevitable end-of-trading panic.

[Olivia Wilde Homo]

I wonder who is actually funding all these bailouts?

[Kestastrophe]

It must have been $20 billion, because the analysts on TV seemed to think that it was going to give AIG some time.

[Kestastrophe]

I wonder who is actually funding all these bailouts?

Well, in the case of the federal reserve bailouts, the fed has a portfolio of treasury bills and other securities that it draws resources from.

[Van Cruncheon]

experiment: taxpayers, dollar speculators, and, of course, china.

[y2kev]

goldman-sachs and morgan stanley have much, much more diversified portfolios. they had profitable quarters, even as their stock took a hit fom the inevitable end-of-trading panic.

Still, Roubini has been saying that they could be in the major trouble within the next six months and he's been pretty accurate so far. Maybe they have diversified portfolios and are able to sustain losses that Lehman couldn't, but I'd like to see a negotiation just with GS and AIG produce 75 billion. There have to be other banks (European banks?) involved.

[Olivia Wilde Homo]

I wonder who is actually funding all these bailouts?

Well, in the case of the federal reserve bailouts, the fed has a portfolio of treasury bills and other securities that it draws resources from.

I was wondering where they may be getting the securities from.  I thought they got all this from investment firms and financiers but with both crumbling, maybe they're getting it from elsewhere.

Also, what if China or any other nation decided to turn down the offer to loan the US money or buy their securities, bonds, etc.?

[Kestastrophe]

^China could also cash in all the t-bills that it has stockpiled.

[y2kev]

I wonder who is actually funding all these bailouts?

Well, in the case of the federal reserve bailouts, the fed has a portfolio of treasury bills and other securities that it draws resources from.

I was wondering where they may be getting the securities from.  I thought they got all this from investment firms and financiers but with both crumbling, maybe they're getting it from elsewhere.

Also, what if China or any other nation decided to turn down the offer to loan the US money or buy their securities, bonds, etc.?

If I understand correctly they just print money. The treasury will put out a shitton of securities to buy and the Fed will print money and buy them.

hello inflation?

^China could also cash in all the t-bills that it has stockpiled.

Do you mean treasury bonds? Aren't T-bills really liquid? Unless china was sitting on them just to lord it over us I don't really get it otherwise. The t-bills should be maturing every 4, 13, or 26 weeks.

[Human Snorenado]

I wonder who is actually funding all these bailouts?

Who cares, this economy is all imaginary anyway.

YOU WERE WARNED ABOUT GOING BACK TO THE GOLD STANDARD BUT WOULDN'T LISTEN!

[Van Cruncheon]

the next six months are gonna be inflation-riffic, 80s style. thanks, reagan! can we get an evilbore party together to defile his grave?

[huckleberry]

                                 

I can't wait for our next president.  You know....the one who admitted to knowing nothing about the economy.

[Van Cruncheon]

...and who was part and parcel of the s&l crisis of the 80s! omg, we've shortened the cycle of distinguished mentally-challenged american history!

[Rman]

WaMu just received a downgrade from S&P.  That's my bank.  I'll just ride this one through.

[MrAngryFace]

What a FUN day in the Stockz

[Oblivion]

I suppose as a contingency plan, Bush could always find the secret treasure via the hidden map on the back on the Constitution.

[Rman]

The good news is that New York City will probably slide back into the shithole it was as a result of this, providing our arts with a wellspring of creativity.

I wish.  Then my rent wouldn't be so high. 

[Rman]

I know, my friend.  Both are global financial centers.

[siamesedreamer]

The good news is that New York City will probably slide back into the shithole it was as a result of this, providing our arts with a wellspring of creativity.

I wish.  Then my rent wouldn't be so high. 

Just become a US Congressman.

[The Fake Shemp]

I suppose as a contingency plan, Bush could always find the secret treasure via the hidden map on the back on the Constitution.

"Oh shit, I ripped it!  Dick?! Dick?! Where'd you put my crazy glue!?"

[Rman]

The good news is that New York City will probably slide back into the shithole it was as a result of this, providing our arts with a wellspring of creativity.

I wish.  Then my rent wouldn't be so high. 

Just become a US Congressman.

LOL.  I know who exactly you are refering to.

[The Fake Shemp]

We should've used all the money spent on mercs and Halliburton and bought Harmonix to fund freedom themed music games.

[Tauntaun]

The good news is that New York City will probably slide back into the shithole it was as a result of this, providing our arts with a wellspring of creativity.

I wish.  Then my rent wouldn't be so high. 

I'm not kidding either.  New York and London are going to take it on their chins.

This should be good for my music career though yes? 

[Human Snorenado]

Yeah, looks like I picked the right time to become a stand-up comedian/author. 

[y2kev]

AIG going tomorrow or wednesday lol

[Fresh Prince]

Gold is going up!

The gold standard will get us through this mess.

[Rman]

speaking of the gold standard, is foc still banned?

[Rman]

Asian markets are tanking.  It looks were going down together, guys.

[MrAngryFace]

Pretty sure this is the LHCs doing

[Olivia Wilde Homo]

Is it wrong for me to wonder what would happen if US cities break down in anarchy as a result of this?

Not due to this alone but we're not through the recession yet.  A lot more is to come I'm sure.  Anything that has been purchased with credit will probably get impacted in some way, like cars, student loans, etc.

[MrAngryFace]

Its not wrong if youre a cable tv producer tasked with creating a new made-for-tv movie.

[The Fake Shemp]

YES!!!

ONE STEP CLOSER TO THE RUNNING MAN!

[Olivia Wilde Homo]

Its not wrong if youre a cable tv producer tasked with creating a new made-for-tv movie.

You don't think a little shake up is necessary?

[MrAngryFace]

If it happens it happens, but whether its necessary is arguable.

[Fresh Prince]

Even if there was a 'shake up' people would forget about it in 10-20 years anyway. Boom bust boom.

[Human Snorenado]

You sure are confused, Borys.  The shitty deregulatory policies of your beloved Republican party are what has given birth to this fucking mess.

[Eric P]

what's great is that before yesterday mccain was always for deregulation

now he's for "regulation reform"

which i think is code of some sort, but i'm too dumb to figure it out

[Eric P]

like "tort reform"

[Eric P]

and "campaign finance reform"

[Fresh Prince]

Borys is a Republican that hates rich people?

You know what will solve this problem? A war, preferably world.

[The Fake Shemp]

If only the Third Reich was still around.  Nazis are so easy-to-hate.  We don't have enemies like the Nazis anymore.  Maybe we could clone Hitler!

[Fresh Prince]

There'll be a way to blame Mahomoud Islamihazijabad in conjunction with the Russians. McCain\Palin all the way.

[Eric P]

we could hate the nazis because they represented everything we despised about ourselves!

they hated jews?  we did too!
they hated mudraces? we did too!
blond hair blue eyes the height of beauty? us too!
wanted to rule the world? us too!
hated the ascent of trash/inferior culture? us too!
hated communists and labor unions?  us too!
purported to be christian with christian ideals despite all evidence to the contrary?  us too!

[Fresh Prince]

Too bad Germans love Obama