Taxpayers will also back $300 billion in shaky debt
Wall Street Journal Nov 24, 08 3:49 AM CST
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The US will bail out Citigroup with $20 billion in fresh capital and a guarantee to mop up $306 billion in toxic assets, the Wall Street Journal reports. The deal, announced late last night, marks a turning point in the financial crisis: In addition to injecting nearly $300 billion into the nation's financial institutions, the feds now seem willing to take on selected banks’ bad assets as well.
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Analysis
Either let US set limits, or make firms set aside cash: economist
New York Times Nov 4, 08 10:33 AM CST
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Regardless of who wins today’s election, one issue from this campaign will continue to burn hot with investors, Andrew Ross Sorkin writes in the New York Times. Both candidates have blamed executive pay for the financial collapse, as execs are rewarded for risk-taking while rarely penalized for failure. But a University of Chicago finance professor has suggested an approach that might just work.
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OPINION
Krugman: Russia et al. not immune after all to crisis' vicious cycle
New York Times Oct 27, 08 12:41 PM CDT
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Only a few weeks ago, it seemed the main fronts of the financial crisis were the Western banking system and mortgage market. But now the crisis has spread to emerging markets like Russia and Brazil. As Paul Krugman writes in the New York Times , the mantra of “decoupling”—that emerging economies could operate independent of the West—turns out to be a fiction.
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ANALYSIS
Washington Post Oct 10, 08 10:35 AM CDT
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As Wall Street banks collapse like a house of cards, American capitalism isn’t just failing in practice; the very idea of unregulated, free-functioning markets has received a serious blow, writes Anthony Faiola in the Washington Post . Once the symbols of American economic might, there's a real possibility that many US banks may find themselves partially government-owned as part of the bailout, altering America’s influence in pushing laissez-faire policies in controlled economies worldwide.
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A US-centric band aid can't quell global markets as confidence plunges
Washington Post Oct 7, 08 10:18 AM CDT
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As the financial crisis continues to grow, the $700 billion bailout passed by Congress last week may be too little too late, the Washington Post reports. The plan may not begin relieving banks of toxic assets for another month, and, meanwhile, the crisis has gone global, making $700 billion seem like a paltry amount.
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Analysis
As credit outlook deteriorates, most important word is 'trust'
New York Times Oct 1, 08 4:20 PM CDT
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Constant references to the Great Depression aren’t alarmist, but the analogy isn't perfect, either, writes David Leonhardt in the New York Times. "The basic mechanics of how the economy might fall into a severe recession look quite similar to those that caused the Depression," he explains. "In both cases, a credit crisis is at the center of the story."
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OPINION
American leadership
is 'scarcer than credit,' writes Brooks
New York Times Sep 30, 08 12:00 PM CDT
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When FDR became president, writes David Brooks, his first priority was to give Americans faith in their leadership, to show that someone was running the show. Now that the US is facing the greatest financial crisis since the Depression, today's political leaders "have failed utterly and catastrophically to project any sense of authority, to give the world any reason to believe that this country is being governed."
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Hong Kong post urged customers to take their money and run
Associated Press Sep 28, 08 8:31 AM CDT
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As worldwide worries mount about the US financial crisis, a Hong Kong blogger has been arrested after allegedly posting internet rumors that a local bank was in trouble, AP reports. He urged depositors to withdraw their funds, police said. He was arrested for computer use with criminal or dishonest intent. Last week hundreds of customers swarmed the Bank of East Asia's offices in Hong Kong and Singapore demanding their deposits after similar rumors.
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Panicked thousands rush to grab savings from Bank of East Asia
Financial Times (UK) Sep 25, 08 6:24 AM CDT
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Rumors that the Bank of East Asia was in trouble spread like wildfire through Hong Kong yesterday, causing a panicked mob to descend on the bank as thousands withdrew their life savings, the Financial Times reports. Police moved in to keep order as crowds demanded their money. BEA's tycoon chairman blamed "malicious rumors" for the panic and vowed to buy shares in the bank himself.
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OPINION
'Good, clean, old-fashioned banking' is coming back in US markets
New York Sep 22, 08 11:06 AM CDT
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A new era has arrived on Wall Street, with the big investment firms falling, James Cramer writes in New York , and traditional banks with large deposit bases looking like the smartest option all along. “We’ll see a more chaste culture emerge from all of this, on Wall Street, and perhaps beyond,” he writes. “Caution will be the new daring. Safe will be the new sexy.”
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Falling share price stokes worries of a bank run
New York Post Sep 17, 08 1:06 PM CDT
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Washington Mutual, America's largest savings and loan, may be the next big financial institution to fail, the New York Post reports. Fearing a run on the struggling bank, federal regulators placed calls yesterday gauging interest in a WaMu buyout to Wells Fargo, JP Morgan Chase, HSBC, and others, but no further negotiations have been scheduled.
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Western banks sold to Mutual of Omaha
Reuters Jul 26, 08 6:07 AM CDT
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The housing bust and credit crunch have toppled two more banks, Reuters reports. Federal regulators have taken over First National Bank of Nevada and California's First Heritage Bank and sold them to Mutual Bank of Omaha. The undercapitalized institutions were the sixth and seventh to go under in the US this year, and banking regulators warn more are likely to follow.
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Feds seized Ill.-based Superior in 2001, but it continued to write, sell off bad loans
Wall Street Journal Jul 21, 08 9:21 AM CDT
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An Illinois bank seized by regulators in 2001 continued to write risky subprime mortgages for months after it was put under the day-to-day supervision of the Federal Deposit Insurance Corporation, the Wall Street Journal reports. Many of the loans—some with interest rates above 12%—have been foreclosed; a Texas bank that bought a portfolio of the loans is suing the government.
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