Monday, September 15, 2008

Grey Monday

Voltron says:

After Sunday's Fed hosted poker game, Bank of America bought Merrill Lynch and Lehman Brothers went bankrupt. Dow opened down around 300 points then bounced off of 11,100 a few times until plunging over 500 points for the day - the largest one day decline in six years.

Washington Mutual, the nations largest thrift, bonds are cut to junk (link) Possibility exists for a run of the bank. FDIC cannot cover all the deposits without raiding the US Treasury.

AIG, the nations largest insurance company, also had it's ratings cut and has received permission from New York State to raid $20 billion of it's own reserves. (link)

Meredith Whitney from Oppenheimer pulls out her crystal ball on CNBC (video) (summary)

Merrill Lynch downgraded several New York real estate investment trusts (link) Good news for SRS, but this is just the beginning.

The Federal Reserve is losing control of short term interest rates (link) an omen that preceded the crash of 1987. (link)

Financial entities are blowing up faster than I had expected and the situation is clearly beyond anyone's control but market prices still do not indicate capitulation. translation: we're not at the bottom yet.

1 comment:

Anonymous said...

Finance world is very crazy... i can't believe a big company as Lehman is dead !... poor capitalism...