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Washington Post
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Sep 17, 08 12:00 PM CDT
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With Wall Street in extremis, John McCain is backing away from a long history as an opponent of financial regulation, reports the Washington Post . The paper cites McCain's record in backing banking deregulation, including the 1999 legislation, sponsored by then-Sen. Phil Gramm, a McCain campaign adviser, that removed the Depression-era walls between banking, investment, and insurance companies.
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Time
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Sep 17, 08 7:40 AM CDT
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The Federal Reserve seemed to draw a hard line against bailouts with Lehman Bros., but just days later it stepped over that line to save AIG. Why? First, says Time : Size. Its implosion would have been "as close to an extinction-level event" as we've been since the Depression. But also: Fear. Whereas Lehman’s collapse was long expected, AIG blindsided the Fed and market participants alike. The business is so complex and mysterious, and its reach so broad, that no one was sure what its failure would mean.
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Bloomberg
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Sep 17, 08 4:49 AM CDT
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European stocks edged up today for the first time in three days on news of the US government's $85 billion bailout of insurance giant AIG—but an early rally in Asian markets faded, reports Bloomberg and the New York Times . Europe's Stoxx 600 climbed as much as 1.9% after trading opened. The FTSE 100 index in London and CAC-40 in Paris both climbed 1.2%. Trading was mixed in in Asia, rattled by continuing concerns about the US and a Chinese real estate meltdown.
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New York Times
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Sep 17, 08 2:40 AM CDT
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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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MSNBC
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Sep 16, 08 7:39 PM CDT
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The Federal Reserve is poised to rescue insurance giant AIG with an $85 billion loan, MSNBC reports. In return, the Fed will take an 80% stake in the company, which is one of the world's biggest insurers. The move is a reversal for the US government, but federal officials determined that AIG's failure would be "catastrophic" in the current financial climate, the Wall Street Journal notes. AIG's board approved the deal late today.
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Bloomberg
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Sep 16, 08 5:40 PM CDT
(Newser) -
Morgan Stanley reported a 3% percent drop in third-quarter earnings but easily beat Wall Street expectations, Bloomberg reports. The investment bank's profit fell to $1.43 billion, or $1.32 per share from $1.47 billion, or $1.38, a year ago. Analysts expected 78 cents a share. The relatively good news came at the end of another volatile day on Wall Street, and Morgan Stanley released the figures a day early to help calm investors. Rival Goldman Sachs reported a 70% drop in earnings this morning.
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Bloomberg
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Sep 16, 08 3:17 PM CDT
(Newser) -
As AIG's future became somewhat clearer, the wildly fluctuating markets settled into positive territory at the end of today's session. Rumors that the Fed will bail out the mega-insurer helped nearly erase a 74% decline, Bloomberg reports. The Dow closed up 141.51 at 11,059.02, the Nasdaq gained 22.45 to 2,202.36, and the S&P 500 rose 20.86 to 1,213.56.
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Wall Street Journal
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Sep 16, 08 1:38 PM CDT
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In its first unanimous interest rate decision in a year, the Federal Reserve voted today to leave its key interest rate unchanged at 2%. The decision reflects regulators' unwillingness to get even more involved in the developments roiling the financial markets, the Wall Street Journal reports. Stocks fell triple-digits on the news that an anticipated cut wouldn't materialize, but bounced back up in late afternoon trading.
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Wall Street Journal
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Sep 16, 08 12:02 PM CDT
(Newser) -
Wall Street’s troubles pose a challenge for both candidates, though because his party hasn’t held the White House for nearly 8 years, Barack Obama has a slight leg up, writes Gerald Seib in the Wall Street Journal . Neither ticket has a strong market background, with John McCain more a “national-security and character candidate” and Obama lacking the experience to be a definite source of reassurance.
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Bloomberg
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Sep 16, 08 8:37 AM CDT
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Amid the financial industry's meltdown, survivor Goldman Sachs reported that third-quarter profit plunged by 70%—the sharpest decline in its history as a public company, but still enough to beat estimates of $1.71 per share. The bank dipped 7% in New York trading, Bloomberg reports, after reporting an income decline of $1.81 per share to $845 million. Year-earlier income was $2.85 billion.
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Wall Street Journal
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Sep 16, 08 5:20 AM CDT
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Barclays is in talks to buy Lehman Brothers’ key assets in a shift that could save 10,000 jobs and some operations, the Wall Street Journal reports. A deal could be finalized today. No sale price has yet emerged for the possible transaction, which wouldn’t touch Lehman’s bad assets. UK-based Barclays pulled out of talks on Sunday to purchase Lehman, which declared bankruptcy yesterday.
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Reuters
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Sep 16, 08 4:36 AM CDT
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Amid the financial fallout, even Manhattan's wealthiest consumers are beginning to curb their spending, Reuters reports. Wall Street tremors and belt-tightening by the rich are bound to hit New York City especially hard, and will rock stores, restaurants—and even charities. "We still have not hit the bottom of the cycle," warned Mayor Mike Bloomberg. New York—and London—have long relied on the securities industry for taxes, jobs and lavish spending that support fashion and entertainment businesses.
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CNNMoney
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Sep 16, 08 3:45 AM CDT
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The downsizing of American International Group should spur its ejection from the Dow Jones 30, Paul R. La Monica writes in CNNMoney. The company's inclusion in the index means its troubles will hurt the market even more than the tribulations of Lehman, Fannie and Freddie—its shedding of divisions will remove the rationale that got the insurance giant included in the first place, La Monica adds.
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Wall Street Journal
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Sep 16, 08 3:25 AM CDT
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Asia's markets took a huge hit today amid fears of a US financ