Hurricane Ike was only a category 2. If this storm had been a category 4 or 5, our oil refining industry probably would have been severely crippled or even destroyed. Oil is our Achilles heel and Mother Nature can smite us upon that heel anytime she feels like it and America will be devastated. This has just happened by Hurricane Ike. Because of the current financial situation, calling for billions of dollars for repairing damage, caused by Ike and the demise of several financial institutions, America may come up short on financing future green projects to lower our oil use in the U.S. This will be due to tight credit demands and money being hoarded by the banks until they see if any other financial institutions have to shut down.
Merrill Lynch is no more. Bank of America Corp. said it is snapping up Merrill Lynch Co. Inc. in a $50 billion all-stock transaction. Who can forget Merrill Lynch’s commercials on television talking about investing your money, as the great ML raging bull ran across the country. Yet Merrill Lynch, like other financial institutes, could not ignore the ‘greed factor’ involved in the sub-prime mortgage rip off. Its payback time and payback is hell. Americans would hope this financial nightmare is coming to an end, but there is still billions of dollars financial institutions will have to write off. Is this the tip of the iceberg? How many thousands of jobs will be lost at Merrill Lynch and how many millionaires woke up today and were millionaires no more?
Picture Credit: Shelpler (America searching for answers in a dead bull)
NEW YORK (Reuters) – Bank of America Corp’s $50 billion acquisition of Merrill Lynch & Co Inc. marks the end of a storied name in American finance, but also creates the nation’s biggest bank by far. Read the rest of the story: LINK
How is your retirement plan looking? Do you feel like the person in the above picture looking from the hind end of a bankrupt bull?
For those of you who are not completely aware of the U.S. financial situation, America needs to wake up. It may be too late. The really bad part about the whole financial situation is, regardless of what happens, you and I, the taxpayers, are getting screwed by the Federal Government. We are going to pay for all the bail outs that are taking place including the massive bail out of Freddie Mac and Fannie Mae!
Where’s is the federal government? I thought our government would know how to take care of these problems? Amazing, the feds helped cause the problem. Our do-nothing Congress has failed again to take care of business. The real answer is that the government is not interested in taking care of business because they care more about being elected than solving tough hard problems. Some of the main problems that are being over looked by our Congress are government regulation, accountability, corruption and greed.
The Raging Bull is dead! Picture Credit: Spaulson
Financial Institutions go from Green to Red or Even Dead!
NEW YORK (AP) “When Wall Street woke up Monday morning, two more of its storied firms had vanished. Lehman Brothers, burdened by $60 billion in soured real-estate holdings, said it is filing for Chapter 11 bankruptcy after attempts to rescue the 158-year-old firm failed.”and Merill Lynch is being purchased by Bank of America.
Picture Credit: Pixelateit
Sept. 15 (Bloomberg) — “Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the sub-prime mortgage crisis it helped create in the biggest bankruptcy filing in history.” Read the rest of the Story.
Lehman Brothers Holdings Inc. (LEH) filed for Chapter 11 bankruptcy Monday in New York, listing debts of $613 billion and naming as unsecured creditors owed hundreds of millions of dollars banks from Tokyo, Hong Kong, New York, Singapore and Taipei, among others. (Note unsecured creditors owed hundred of millions of dollars from foreign banks). Again, as with Merrill Lynch, thousands of jobs are going to be lost because of the Lehman Brother’s fiasco.
Lehman Brothers largest bankruptcy in the history of U.S.
Lehman Brother’s CEO, Richard Fuld, is being blamed according to this article. The demise of the independent Wall Street institutions came as shock waves from the 14-month-old credit crisis roiled the U.S. financial system six months after the collapse of Bear Stearns.
Read this article. It is a must read for understanding to what went on with Lehman Brothers during the financial fallout on Monday. How the Master’s of the Universe Ran Amok and Cost us the Universe: LINK (Excerpt from article): Lehman embarked on massively leveraged property acquisitions and expansion. Equity trading soared. And the bank plunged heavily into sub-prime lending. Indeed, just ahead of the market collapse, Lehman underwrote more mortgage-backed securities than any other firm. By the end, 62-year-old Fuld was Lehman’s biggest individual stockholder. Despite the crash, he stands to leave with about $65 million, based on Lehman’s Friday morning stock price of $3.73. This tally includes 8.6 million unrestricted shares worth some $32.1 million as of Friday morning – though they had been worth $582 million last November before the credit crunch hurricane struck.
Read this article: Another must read: UK may have had a hand in the demise of Lehman Brothers. Great video and information. LINK Is the U.S heading toward Socialism or State Capitalism? Unlike mortgage giants Fannie Mae and Freddie Mac, broker dealers are not crucial pillars of the US housing market. Lehman is an optimal candidate for ritual sacrifice. While the appearances of free market discipline have been upheld, the reality of the weekend events is a further lurch towards socialism, or state capitalism if you prefer.
In an exclusive interview with CNBC.com, Wilbur Ross, chairman and CEO of WL Ross & Co., says he sees possibly as many as a thousand bank closures in the coming months. And this will create opportunities for investors. Check out this Link.
Greenspan says U.S. in once in a century financial crisis in the following article.
AIG, General Electric and GMAC all having financial woes: The following article is about A.I.G. (American International Group) the insurance giant has asked for a bridge loan of $40 million from the Federal Reserve to keep its doors open another 2-3 days as of September 15, 2008. A.I.G.’s extraordinary move of reaching out to the Fed for help may spur other non-investment banks to try a similar move. Companies ranging from General Electric to GMAC have been hurting badly and would desperately need the liquidity that the Fed would provide.
Comments on what caused this financial crisis, another point of view: (it didn’ happen over night): The failure of Fannie Mae and Freddie Mac, setting in motion the biggest government bailout/takeover in U.S. history, brings a grim sense of fulfillment to competent economists. After all, what did people expect, that water would flow uphill forever? An Important LINK to read!
What about the future for the U.S.?
With the current financial crisis taking place, the big question we need to ask is: What happens next time a major financial crisis occurs? What about all the workers that will loose jobs? Fewer workers, less tax revenues and our do-nothing Congress will raise taxes if they can. Also, states, cities and towns tax revenues are way off due to economic conditions and they will continue to raise property taxes every year to meet budget demands. The next big financial area the Congress will have to face is Social Security. Why? The baby boomers are reaching retirement age and will be drawing out money from the broke SS FUND faster than the American taxpayer can pay SS TAXES to cover the outgo. Another crisis is looming on the horizon?
There has to be accountability for greed, wasteful spending and corruption. This is the only way our financial systems a can survive. We do not need anymore government regulations. The buck has to stop with the U.S. Congress and an example needs to start with the House and Senate. What about Social Security and Medicare when they reach the point there are not enough funds to support these government agencies? Stop and think. The time is coming in the near future and will the government wait to act when these agencies start into bankruptcy? If our do nothing Congress is true to form, we are all in for serious trouble in the near future.