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Bailout Failure Puts McCain on the Spot

Tue, 30 Sep 2008 00:00:00 EST

The surprise defeat of the $700 billion bailout plan before the House of Representatives will soon show what downside, if any, Senator McCain faces for his bold gambit last week declaring his campaign suspended as he briefly jumped into the thick of negotiations over the proposal.Lawmakers said yesterday it was uncertain whether the House would try for a second vote on the proposal in the coming days or return to the drawing board and come up with something new. The bailout plan was voted down...



Citigroup Rescues Wachovia's Bank Unit

Tue, 30 Sep 2008 00:00:00 EST

Citigroup Inc., the biggest American bank by assets, will pay about $2.16 billion for banking operations of Wachovia Corp. after shares of the North Carolina lender collapsed under the weight of overdue mortgages.While regulators said the Charlotte-based bank hadn't failed, Wachovia will lose its biggest unit and investors will get only about $1 a share for the bank, whose stock topped $59 in April 2006. All depositors will be protected, according to the Federal Deposit Insurance Corp., which...



After the Congressional Failure

Tue, 30 Sep 2008 00:00:00 EST

The Next Stop: The Federal ReserveWith Congress unable to pass the $700 billion bailout, it is likely that the next stop in the race to quell the market chaos will be the Federal Reserve. Expectations are rising that the Federal Open Market Committee could cut its benchmark lending rate at its October 29 meeting, while some are predicting it could institute an emergency rate-cut as soon as next week. Interest rate futures listed on the Chicago Board of Trade are pricing in a 50% chance that the...



Fed Pumps $630 Billion Into System

Tue, 30 Sep 2008 00:00:00 EST

The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England, and the Bank of...



Talent Flight Feared by City Firms

Mon, 29 Sep 2008 00:00:00 EST

With New York's top investment banks either converting into commercial banks or bankrupt, the city is poised to lose revenue and talent, industry analysts said.The prediction is that many of the highest-paid traders, analysts, and portfolio managers, frustrated with lower earnings potential at commercial banks the banks are permitted to use only about one-third the leverage of investment banks and so often post lower returns will leave to start their own hedge funds and investment vehicles...



Markets Tumble as Bailout Fails

Mon, 29 Sep 2008 10:03:26 EST

Wall Street's worst fears came to pass today, when the government's financial bailout plan failed in Congress and stocks plunged precipitously - hurtling the Dow Jones industrials down nearly 780 points in their largest one-day point drop ever. Credit markets, whose turmoil helped feed the stock market's angst, froze up further amid the growing belief that the country is headed into a spreading credit and economic crisis.Stunned traders on the floor of the New York Stock Exchange, their faces...



Oil Falls on Demand Outlook

Mon, 29 Sep 2008 11:41:09 EST

Oil prices tumbled more than $6 a barrel today, briefly slipping below the $100 level as traders bet that global demand for petroleum products will keep falling despite a planned $700 billion American financial bailout.A stronger dollar also weighed on crude prices as investors who bought oil and other commodities as a hedge against inflation sold their contracts.Light, sweet crude for November delivery fell as low as $99.80 a barrel in morning trading on the New York Mercantile Exchange before...



Bailout Could Spur a New Gold Rush

Fri, 26 Sep 2008 00:00:00 EST

A James Bond villain who would be overjoyed today if he hadn't met the fate of all 007 adversaries is Goldfinger. The words vary, but that's essentially the message from several market watchers who say they see sizable market risk in Uncle Sam's bailout a $700 billion rescue package they call heavily flawed, strongly indicating the prospects of further dollar weakness and higher inflation. That, in turn, could trigger a new gold rush.One money manager critical of the rescue package, Leonard...



Derivatives Pose New Wrinkle in Lehman Case

Thu, 25 Sep 2008 00:00:00 EST

Bankruptcy lawyers and law professors are preparing for a journey into uncharted territory as the credit default swaps market gets dragged into the Lehman Brothers bankruptcy proceeding."The courts have dealt with credit default swaps very infrequently, and certainly not at the scale they are now out there," a lawyer at Washington, D.C.-based Caplin & Drysdale, James Wehner, said. "We have a new law and a new financial phenomenon, so there is a lot of uncertainty."In recent weeks, regulators...



Why Wall Street Is Ready To Rise Again

Thu, 25 Sep 2008 00:00:00 EST

Happily, I can say with some confidence that we've reached the bottom of this particular Wall Street meltdown. Why? Because Warren Buffett told us so, and I'm easily influenced by people who have made billions of dollars.Mr. Buffett, for all his "I don't know which fork to choose" folksiness, is a hard-nosed investor and a veteran Wall Streeter. Having bought a 12% interest in Salomon Brothers in 1987, he took charge of the firm when it had a little dust-up with regulators and ultimately sold...



Bernanke, Paulson Face Tough Audience

Wed, 24 Sep 2008 00:00:00 EST

Key lawmakers are ignoring a warning by the Federal Reserve chairman, Ben Bernanke, that "absent a plan," the financial markets will worsen.Most members of the Senate's Banking Committee yesterday told Mr. Bernanke and Treasury Secretary Paulson, who had come to Congress seeking $700 billion in bailout money, either that they disapproved of a bailout in general, or that they were against the one the Bush administration was pitching.Some senators balked at the idea of making taxpayers nationwide...



Cox Says Congress Should Regulate Credit-Default Swaps

Wed, 24 Sep 2008 00:00:00 EST

The chairman of the Securities and Exchange Commission, Christopher Cox, said Congress should "immediately" grant authority to regulate credit-default swaps amid concern the bets are fueling the global financial crisis."Neither the SEC nor any regulator has authority over the CDS market, even to require minimal disclosure," Mr. Cox told the Senate Banking Committee yesterday at a hearing on the government's $700 billion financial rescue plan. Lawmakers should provide the authority "to enhance...



Citigroup To Buy Wachovia Banking Operations

Mon, 29 Sep 2008 08:28:45 EST

In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.Citigroup will absorb up to $42 billion of losses in the deal, with the FDIC covering any remaining losses, the government agency said today. Citigroup also will grant the FDIC $12 billion in preferred stock and warrants.The deal greatly expands Citigroup's retail outlets and leaves it among the American...



Rescue Plan May Not Rescue Wall Street

Mon, 29 Sep 2008 00:00:00 EST

News of the $700 billion rescue package intended to bail out the country's floundering financial system was greeted with both cheer and fear by Wall Street's fraternity of market-watchers. The cheer stems from a belief that the rescue plan is a much-needed confidence builder. The fear reflects the awareness that, Washington's life preserver notwithstanding, there is no overnight cure for the bevy of ills that have plagued markets since last October, stripping it of more than $3 trillion of...



Britain Plans To Take Over Biggest Lender

Mon, 29 Sep 2008 00:00:00 EST

Bradford & Bingley Plc, Britain's biggest lender to landlords, may be taken over by another bank or nationalized today under a British government-backed plan to protect $39 billion of customer deposits.The chancellor of the Exchequer, Alistair Darling, will announce details of the plan before 8 a.m. today, his office said late yesterday. Treasury officials worked through the night on a partial government takeover, acquisition by a rival bank or a break-up and purchase of assets by several...



Fortis Bank is Nationalized by Belgium, Netherlands, Luxembourg

Sun, 28 Sep 2008 17:35:44 EST

BRUSSELS, Belgium The Belgian prime minister says the troubled Dutch-Belgian banking and insurance giant Fortis NV will be partially nationalized.Prime Minister Yves Leterme says the deal was reached during talks today between E.U. and national banking officials and ministers from the Belgian, Dutch, and Luxembourg governments.The deal will see the three governments pour 11.2 billion euro ($16.4 billion) into the bank.Fortis will also be forced to sell off its stake in Dutch bank ABN Amro...



Report: Wachovia In Talks for Sale

Sun, 28 Sep 2008 21:58:44 EST

At least two major banks were reportedly in talks today to buy Wachovia Corp., the latest U.S. bank to be the focus of investor anxiety over mounting losses tied to toxic assets.The New York Times reported on its Web site that Citigroup Inc. and Wells Fargo & Co. are bidding in a possible emergency takeover of Wachovia, which is based in Charlotte, North Carolina.The Wall Street Journal also listed Spain's Banco Santander SA as a possible bidder. In London, meanwhile, British media reports said...



Government Ends Oversight for Wall Street Banks

Sat, 27 Sep 2008 13:24:16 EST

WASHINGTON The Securities and Exchange Commission said Friday it was ending a program of voluntary oversight for Wall Street investment banks that its chairman said clearly has not worked.It was the latest shift in the regulatory landscape stemming from the financial crisis that has gripped the markets and thrown Washington into fevered negotiations over a $700 billion bailout plan.SEC Chairman Christopher Cox announced the agency's decision to end the program under which SEC examiners...



Stocks Finish Slightly Higher

Fri, 26 Sep 2008 09:41:39 EST

Stocks have turned in a lopsided finish as investors nervously wait for more news on the government's financial bailout plan.The Dow Jones industrials rose 118 points to the 11,140 level, lifted by big national banks like Citigroup Inc. and Bank of America Corp. Although investors are very nervous about the financial sector, they were gravitating toward companies they believe are in more secure financial positions.Smaller banks and tech stocks led the day's selling, which came on very light...



WaMu Fails; JPMorgan To Buy Deposits

Fri, 26 Sep 2008 00:00:00 EST

JPMorgan Chase & Co., the third-biggest American bank by assets, agreed to acquire the deposits of Washington Mutual Inc. as the thrift was seized by regulators in the biggest bank failure in American history.JPMorgan will pay $1.9 billion, the Federal Deposit Insurance Corp. said in a statement yesterday. It won't acquire liabilities including claims by equity, subordinated, and senior debt holders, the FDIC said.WaMu, based in Seattle, collapsed after its credit rating was slashed to junk and...