Bush wants OK to spend $700.000.000.000

Bailout proposal sent to Congress seeks authorization to spend as much as $700 billion to buy troubled mortgage-related assets.

NEW YORK (CNNMoney.com) — President Bush has asked Congress for the authority to spend as much as $700 billion to purchase troubled mortgage assets and contain the financial crisis.

The legislative proposal – the centerpiece of what would be the most sweeping economic intervention by the government since the Great Depression – was sent by the White House overnight to lawmakers.

Read moreBush wants OK to spend $700.000.000.000

The Real Reason for the Global Financial Crisis…the Story No One’s Talking About

Part I of a three-part series looking at how so-called “credit default swap” derivatives could ignite a worldwide capital markets meltdown.

Are you shell-shocked? Are you wondering what’s really going on in the market? The truth is probably more frightening than even your worst fears. And yet, you won’t hear about it anywhere else because “they” can’t tell you. “They” are the U.S. Federal Reserve and the U.S. Treasury Department, and they can’t tell you what’s really going on because there’s nothing they can do about it, except what they’ve been trying to do – add liquidity.

At the exchange rate yesterday (Wednesday), 35 trillion British Pounds was equivalent to U.S. $62 trillion (hence, the 35 trillion Pound gorilla). According to the International Swaps and Derivatives Association, $62 trillion is the notional value of credit default swaps (CDS) out there, somewhere, in the market.

Read moreThe Real Reason for the Global Financial Crisis…the Story No One’s Talking About

US: Conservative congressmen urge Bush to cut off aid to Wall Street

Frustrated by the US government’s rescue of AIG, Fannie Mae and Freddie Mac, a group of 100 conservative congressmen today urged the Bush administration to stop keeping Wall Street afloat.

In a letter to the treasury secretary and Federal Reserve chairman, members of the conservative Republican Study Committee (RSC) lamented the abandonment of free-market principles.

Rescuing failing financial firms has “set a dangerous and unmistakable precedent for the federal government both to be looked to and relied upon to save private sector companies from the consequences of their poor economic decisions,” the RSC members wrote.

Read moreUS: Conservative congressmen urge Bush to cut off aid to Wall Street

Ron Paul on the Global Financial Crisis 9/18/08

Added: Sept. 18, 2008

Source: YouTube

Money Market Funds Enter a World of Risk

Money market funds have been among the few places that investors could put their cash and sleep peacefully.

At the moment, that is not necessarily true.

On Tuesday, the Reserve Primary Fund, a giant money market fund whose parent helped invent that investment, said its customers would lose money. Instead of each share being worth a dollar for every dollar invested, it said its customers’ shares were worth only 97 cents. In Wall Street parlance, it “broke the buck,” a rare occurrence.

So far, it appears that no other money market funds have fallen below a dollar a share. And other money market managers have hastened to reassure investors that their money is safe. But the Primary Fund’s announcement did raise this question: What, in today’s world, is truly safe?

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Roubini: USA transforming into USSRA

Nouriel Roubini

An economic analyst says by buying out investment giants, the USA had transformed into the USSRA (the United Socialist State Republic of America).

“This transformation of the USA into a country where there is socialism for the rich, the well connected and Wall Street (i.e. where profits are privatized and losses are socialized) continues today with the nationalization of AIG,” Nouriel Roubini said.

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Wall Street crisis deepens and Banks rush to do deals

NEW YORK (Reuters) – Manic and increasingly desperate dealmaking gripped Wall Street on Wednesday as U.S. stocks plummeted to three-year lows amid new signs of distress in the global financial industry.

Morgan Stanley was discussing a merger with regional banking powerhouse Wachovia, the New York Times reported. CEO John Mack got a phone call from Wachovia on Wednesday but is also pursuing other options, the paper said.

“In this market, anything’s possible. It seems like the market wants the investment banking model to disappear,” said Danielle Schembri, bond analyst covering brokers at BNP Paribas in New York.

Washington Mutual , the country’s largest savings bank, put itself up for sale, sources said, confirming a New York Times report. Potential suitors include Citigroup, JPMorgan, Wells Fargo and HSBC, they added.

Read moreWall Street crisis deepens and Banks rush to do deals

Fed to give AIG $85 billion loan and take 80% stake

A man behind the door at an American International Group building in New York’s financial district on Tuesday. (Lucas Jackson/Reuters)

In an extraordinary turn, the Federal Reserve agreed Tuesday night to take a nearly 80 percent stake in the troubled giant insurance company, the American International Group, in exchange for an $85 billion loan.

The Federal Reserve and Goldman Sachs and JPMorgan Chase had been trying to arrange a $75 billion loan for the company to stave off the financial crisis caused by complex debt securities and credit default swaps. The Federal Reserve stepped in after it became clear Tuesday afternoon that the banking consortium would not be able to complete the deal.

Without the help, AIG was expected to be forced to file for bankruptcy protection.

Read moreFed to give AIG $85 billion loan and take 80% stake

AIG has under 24 hours to raise $80bn and avoid collapse

A man walks through a revolving door at an American International Group (AIG) building in New York’s financial district September 16, 2008. REUTERS/Lucas Jackson

The world’s largest insurance company has less than 24 hours to raise $80bn (£45bn) or face collapse, a leading US politician has warned.

The dire diagnosis for American International Group (AIG), made by New York State Governor David Paterson, came amid another day of continued turbulence on the global stock markets.

Read moreAIG has under 24 hours to raise $80bn and avoid collapse

U.S. Stocks Advance on Expectations Fed Will Rescue AIG

I ‘expect’ a ‘Great Depression’ in the not too distant future.

Sept. 16 (Bloomberg)U.S. stocks rose, helping the Standard & Poor’s 500 Index rebound from its steepest drop in seven years, as expectations grew the Federal Reserve may rescue American International Group Inc. from collapse.

Benchmark indexes crossed between gains and losses more than 25 times, and AIG pared most of a 74 percent decline, as investors weighed the fate of the largest U.S. insurer after credit-market losses forced Lehman Brothers Holdings Inc. into bankruptcy. Merrill Lynch & Co. led a 6.2 percent rally in the S&P 500 Financial Index a day after the measure of banks, brokerages and insurers plunged the most since at least 1989.

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Goldman profit plunges 70 pct amid market slump

Goldman Sachs Group CEO Lloyd Blankfein

NEW YORK (Reuters) – Goldman Sachs Group Inc (GS.N) said quarterly profit plunged 70 percent as the worst market slump in decades led to weaker-than-expected revenues, knocking the stock to its lowest level in nearly three years.

Still, the larger of the two major U.S. investment banks still standing, beat profit expectations on Tuesday, even as it recorded $1.1 billion in write-downs and losses from its principal investments. It was the biggest earnings decline since Goldman went public in 1999.

Read moreGoldman profit plunges 70 pct amid market slump

Wall Street’s Next Big Problem

WHEN I drove to the Beverly Hills offices of Drexel Burnham Lambert on Feb. 13, 1990, the last thing I expected to hear was that the investment bank where I worked was going under. Yet early that morning, we were told that the company was filing for bankruptcy. I was, to put it mildly, blown away. At the time, Drexel had $3.5 billion in assets and was the biggest underwriter of junk bonds.

It all seemed like a very big deal at the time. But what’s happening this week makes me pine for the good old days.

Read moreWall Street’s Next Big Problem

AIG falls 42% in cash scramble

Nation’s largest insurer races to raise capital after being hit by credit raters.

NEW YORK (CNNMoney.com) — Shares of American International Group tumbled Tuesday as the company scrambled to raise as much as $75 billion to keep itself afloat.

The pressure on the nation’s largest insurer reached fevered pitch on Monday night as the troubled insurer was hit by a series of credit rating downgrades.

The cuts could prove deadly to AIG (AIG, Fortune 500), forcing it to post more than $13 billion in additional collateral.Shares were down 42% in early morning trading, after falling more than 70% in early morning trading and losing 61% of their value the day before.

Read moreAIG falls 42% in cash scramble