Merrill Lynch shareholders suing, because they think that they did not get enough from Bank of America to buy them.
If BoA shareholders sued, they would have a case, because Merril shows every sign of being like Countrywide, where every few days/weeks, more unpleaseantness will be found as rocks are turned over.
BoA bought itself another money pit.
I approve of the right to litigate, but this is a stupid lawsuit.
The FRB: Press Release:
The Federal Reserve Board on Tuesday, with the full support of the Treasury Department, authorized the Federal Reserve Bank of New York to lend up to $85 billion to the American International Group (AIG) under section 13(3) of the Federal Reserve Act. The secured loan has terms and conditions designed to protect the interests of the U.S. government and taxpayers.
The Board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth, and materially weaker economic performance.
Fragility, huh? If this economy had any more of a glass jaw, it could shave with Windex®.
BTW, the following is a lie:
The interests of taxpayers are protected by key terms of the loan. The loan is collateralized by all the assets of AIG, and of its primary non-regulated subsidiaries. These assets include the stock of substantially all of the regulated subsidiaries. The loan is expected to be repaid from the proceeds of the sale of the firm’s assets. The U.S. government will receive a 79.9 percent equity interest in AIG and has the right to veto the payment of dividends to common and preferred shareholders.
The Fed is treating this as a liquidity problem but in fact, it’s an insolvency problem. There is not enough assets to pay back the Fed.
Female suicide bomber kills 20.
It’s likely to get worse as the Maliki government continues its assassination campaign against the Awakening councils
I waiting for monkeys to fly out of tuchas, because he just called Sarah Palin unqualified to be president
David Brooks?
You know that there is a problem, when I open with ratings downgrades.
We have S&P downgrading Washington Mutual to junk status, and even more significantly, AIG, the largest insurance company in the world has been downgraded by Fitch Ratings to A from AA-, and S&P and Moody’s downgraded them too, from to A- from AA- for S&P, and to to A2 from Aa3 for Moody’s.
This is ugly, and it is not surprising that the costs of corporate bond insurance has skyrocketed on what is called “counterparty risk” by the MBA types, and the belief that you are dealing with a bunch of lying bastards foo the rest of us.
It’s the same reason that the costs of overnight borrowing has gone up too, with the LIBOR more than doubling from 3.10625% to 6.43750%.
No one knows when the next shoe is going to drop, and even the additional $70 billion that the Fed dropped out of helicopters wasn’t much help.
It’s why we’re seeing Thornburg Mortgage struggle under a sudden onslaught of margin calls.
When Goldman Sachs earnings 70%, even though they hedged against the real estate crash, you know that no one is making money.
And at the end of all this the Fed decided to leave interest rates unchanged, which is not surprising, since they are already pushing on a string.
Meanwhile, the dollar is behaving like my cat when he gets outside in a rain squall, it really did not move, but you can see the conflict between fear driving people to dollars, and the fear of the US financial meltdown driving people away from the dollar.
We actually saw consumer prices fall, driven by falling energy prices (oil is now about $91.15/bbl on demand concerns from the financial meltdown)
Gasoline still went up, driven by the came hurricane refinery concerns that have driven prices over the past 4 or so days.
No, this is not a report from Declan “Draw By Crayon Libertarian” McCullagh, this is an actual claim from the McCain campaign:
Asked what work John McCain did as chairman of the Senate Commerce Committee that helped him understand the financial markets, the candidate’s top economic adviser wielded visual evidence: his BlackBerry.
“He did this,” Douglas Holtz-Eakin told reporters this morning, holding up his BlackBerry. “Telecommunications of the United States is a premier innovation in the past 15 years, comes right through the Commerce Committee. So you’re looking at the miracle John McCain helped create and that’s what he did.”
It would be less laughable if he had not become chair of the commerce committee until 1997, by which point, RIM had been in existence for seven years.
Some times you come across something about which you have nothing to add but an admonition to go and read it.
Thisinterview with Michael Hudson falls in this category.
So go and read it.
Here, the Rude one taking on Sarah Palin.
Very funny….rude…but very funny.
Ohio Secretary of State Jennifer Brunner, a Democrat who replaced the Uncle Tom Republican Ken Blackwell, has just moved against voter caging, “Brunner issued a release last week directing that 60-day notices sent by boards of election to voters that are returned as undeliverable cannot be used as the sole reason for canceling an Ohio resident’s voter registration.“
This is why having a Democrat as the chief election official in the state, and why Republicans try for these positions.
Republicans take a page out of Stalin’s book,* “Those who cast the votes, they decide nothing. Those who count the votes, they decide everything.”
*Actually, it’s not his book, it was the memoirs of his secretary, who quoted Stalin as saying this.
You can read the full report from Health Affairs, a medical journal, but the under rated Bob Herbert completely nails the issue when he says, “These are changes that will set in motion nothing less than the dismantling of the employer-based coverage that protects most American families.“
Read both.
Because he just called Roe v. Wade an unsupportable decision. He does day that it should remain as precedent, underthe principle of stare decisis, but that the decision is not based, “in either the text of the Constitution or its own precedents.”
First, this analysis is just plain wrong, the precedents of Griswold v. Connecticut and Eisenstadt v. Baird, which prohibited states banning contraception on the basis of privacy rights, and which he studiously, ignores is clearly on the path to Roe.
Second is that his embrace of stare decisis would invalidate rown v. Board of Education, the national minimum wage, and the National Labor Relations act.
For Barack Obama to continue to have him as an adviser, or to consider him as a member of the cabinet, or as senior Department of Justice appointment would be a betrayal of his supporters and the Democratic party.
H/T TalkLeft.
It looks like some states are making the restoration of voting rights for ex-convicts easier, though it would be nice if they were restored once no longer incarcerated.
One of the consequences of the “war on drugs” is that over 5 million people are denied the right to vote, but that’s a feature, Republicans don’t want n*gg*rs to vote.
Mr. Yglesias is a wise man:
Unlike the guy who runs Lehman Brothers, the guys who clean the bathrooms in the Lehman Brothers office have, as best one can tell, been doing an excellent job. And yet if the company going under results in everyone involved losing their jobs, the guy who runs Lehman will wind up being better off than the guys who clean the bathrooms. This is because in the United States of America, hard work is the way to get ahead.
Madame Guillotine is beginning to look remarkably attractive.
It appears that they are shuttering their carbon trading desk.
Anything that kicks carbon trading in the teeth is a good thing. It is bad, incredibly bad, policy.
The stated idea is, “Let’s let Wall Street apply the same practices ant techniques to a world threatening problem, the innovation unleashed will solve that problem.“
The real goal is, “If we create a market mechanism for this sh#@, then I can pull down major fees as an expert in this sh#@, my Ivy League classmates can get commissions whenever someone sells this sh#@, we can get more commissions whenever we repackage these things as sh#@ backed obligations, and I can get a Porsche.“
Market based solutions: Because baby needs a Porsche.
In addition to all the other problems with Boeing, it appears that their determination to screw their workers is now preventing the first flight of the 787.
I have no clue as to what Boeing was thinking when, in a year of record profits, it presented its employees what amounted to a pay cut…Actually I have no clue IF Boeing is thinking at all.
He is predicting that the current model for investment banks is unsustainable.
He thinks that independent brokerages are done, and will be purchased by some of the mega banks, including extensive foreign ownership and control.
It’s a good read, but the interview below is good too. My favorite quote is, “They’re all toast.”
We are now seeing reports that Pakistani troops are firing on US troops, and the Pakistani military is saying that they repelled a US border incursion.
This is why it was so disasterous to take our eye off the ball in Afghanistan. There was a limited window in which to act, and the window is at best rapidly closing at this time.
So now Bloomberg is suggesting that western flight from the Russian markets may drive russia to moderate its position on Georgia.
This is bovine scatology….the people who will flee are the foreign investment banks, and the people who will snap up stuff at depressed prices are Putin supporters, and they will make more money when the money reenters the Russian market, and the net result will be a movement of ownership from transnational corporations to Putin and his cronies.
This is a feature, not a bug.
Yep, we now have a report of what is quite literally a pain ray that causes no tissue damage.
How long before this comes home, and this “torture with evidence of torture” device finds it’s way into police interrogation rooms”
We now have a report that the SEC will be taking actions to restrict naked short selling. (primer on the practice here)
Of course, they are a bigger problem with small stocks, where someone can naked short shares in a micro cap, and drive the price down, because the stocks that they are selling dwarf the total volume of trading, but the SEC only noticed it when it affected the big guys.