OPINION
The end of easy credit marks a new era, writes Pearlstein
Washington Post Sep 18, 08 10:06 AM CDT
(Newser)
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On paper, the losses from the credit crisis are probably "the greatest destruction of financial wealth that the world has ever seen," writes Steven Pearlstein. But the trillions that have disappeared aren't the biggest casualty of the last year. Rather, says the Washington Post columnist, we are undergoing a fundamental recalibration about credit—the era of cheap money is over.
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Dealer-less London sale smashes records
Forbes Sep 17, 08 4:50 PM CDT
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Damien Hirst sold 223 pieces of artwork for $199 million by the end of a two-day auction yesterday, shattering the record for most revenue in an auction of a single artist’s work, Forbes reports. The previous mark was held by Pablo Picasso, with 88 sold for $20 million in 1993. Hirst himself set a target of $116 million.
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MARKETS
SEC moves to restrict short selling
Wall Street Journal Sep 17, 08 3:41 PM CDT
(Newser)
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Stocks plummeted again today as insecurity about the financial system gripped the markets, the Wall Street Journal reports. The AIG bailout proved to be of little comfort to traders, who quickly began betting on the next big firm to fall. The Dow closed down 449.36 points to 10,609.66. The Nasdaq fell 109.05, closing at 2,098.85, and the S&P 500 lost 57.21 points, settling at 1,156.39.
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Falling share price stokes worries of a bank run
New York Post Sep 17, 08 1:06 PM CDT
(Newser)
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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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OPINION
Treasury and Fed need to start playing offense, says Leonhardt
New York Times Sep 17, 08 7:15 AM CDT
(Newser)
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If you'd told economists 18 months ago what lay ahead in the financial industry, predictions for the American economy would be dire. The fact that things aren't totally awful—we still haven't entered into a recession—is testament to the good defense of Hank Paulson and Ben Bernanke. What they aren't doing, writes David Leonhardt in the New York Times , is fixing the underlying problems that led to Lehman's failure and AIG's bailout.
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ANALYSIS
Seeks to overcome charges he's out of touch, can't see trouble
New York Times Sep 17, 08 5:35 AM CDT
(Newser)
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John McCain struck his latest discordant note on Monday when he described the economy's fundamentals as "strong" even as the financial system shuddered under hammer blows. McCain swiftly backpedaled, calling America's workers its fundamentals, but the issue highlights the candidate's struggle to overcome Democratic charges that he's out of touch on the economy, reports the New York Times.
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Agency would formalize what feds are already doing in money crisis
New York Times Sep 17, 08 2:40 AM CDT
(Newser)
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The idea of creating a federal agency to dispose of the toxic debt at the heart of the credit crisis is gaining traction in Washington, the New York Times reports. The proposed agency would resemble one set up in 1989 to resolve the savings and loan crisis—but in a controversial extension would also acquire assets not backed by federal deposit insurance.
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11th-hour meeting exhausted all possible rescue options for investment firm
Wall Street Journal Sep 15, 08 4:39 PM CDT
(Newser)
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As the dust settles on Wall Street, details of the final frantic negotiations on Lehman Brothers reveal that Henry Paulson’s opposition to a government bailout ultimately sealed the investment bank’s fate, the Journal reports. Paulson summoned an emergency meeting of 30 Wall Street executives Friday to definitively state that taxpayer rescue wasn’t coming, and urged them to work on saving Lehman.
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Insurance giant tries to stave off credit downgrade, aims to sell assets
New York Times Sep 15, 08 2:25 AM CDT
(Newser)
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In yet another Wall Street meltdown, floundering insurance giant American International Group has turned to the federal government in a bid to stave off a threatened credit-rating downgrade that could trigger the firm’s immediate collapse, reports the New York Times . AIG has requested a $40 billion bridge loan from the Federal Reserve and is trying to sell off its most valuable assets—including its domestic automotive business and its annuities unit.
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OPINION
Fed should ignore critics, hold its ground until markets rebound
American Sep 3, 08 5:55 PM CDT
(Newser)
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Critics claim the Federal Reserve has been too eager to cut interest rates, and that lax policy has exacerbated inflation. But the Fed should hold its ground, Desmond Lachman argues in the American , until the housing and credit markets are clearly on the rebound. The credit crunch has prompted banks to compensate with higher spreads and tighter lending standards, which should offset inflationary concerns.
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OPINION
As both companies plummet, combining them might make sense
New York Times Sep 2, 08 10:54 AM CDT
(Newser)
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With Fannie Mae and Freddie Mac struggling to stay afloat, arguments for a merger are gathering steam. “Sometimes size can be a strength,” writes Andrew Ross Sorkin in the New York Times . The companies spent $1.825 billion in total overhead in the first half of 2008 doing exactly the same thing; a merged entity could save some $1.2 billion a year.
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