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US banking crisis
Topic Started: Sep 15 2008, 10:19 AM (1,410 Views)
myphotoshop
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like i always said " hobby can wait, your survival cannot wait "

been warning a friend since 2006 and yet he still choose d other way.
Edited by myphotoshop, Sep 17 2008, 09:43 PM.
"PHOTOSHOP" helping the ugly since 1988
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myphotoshop
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Sep 17 2008, 06:44 PM
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Its really hard for me to see it coming because everything happening around me has got nothing to show me that they are worrying about this Crisis thing ... :sweat:

My Insurance Agent is still going for Holidays all year round to enjoy life ...

My current Sushi Shop is expanding aggressively as ever all over Singapore & all the way to Vietnam ... Staffs are being traded to Taiwan & England for better prospects ...

My views on the Consumer Market seems to be 'Always' got new things for people to buy & these people really 'Buy' , these Big Company Names don't close down ...

Maybe all i see are so small , so little , i don't feel anything about it ... :faint:
not all bad times are all bad.

when everything is down, invest your money into good ones that has been made dirt cheap by the bad sentiment.

insurance agent ? they earned a lot from your policy.... if u had been one before.

Edited by myphotoshop, Sep 17 2008, 09:52 PM.
"PHOTOSHOP" helping the ugly since 1988
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myphotoshop
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Dow plunges over 300 points
Government bailout of AIG adds to fears about the stability of the financial markets. WaMu, Goldman and Morgan Stanley all tumble.


New YORK (CNNMoney.com) -- Stocks slumped Wednesday morning, with the Dow industrials tumbling more than 300 points, as the government's emergency rescue of AIG exacerbated fears about the stability of financial markets. The selloff comes in the wake of Lehman Brothers' bankruptcy and Merrill Lynch's sale to Bank of America.

Investors also focused on a report that showed construction of new homes fell to the lowest level in 17 years.

The Dow Jones industrial average (INDU) lost 333 points, or 3% about 2 hours into the session. The Standard & Poor's 500 (SPX) index lost 3.4% and the Nasdaq composite (COMP) lost 3.5%.

Small cap stocks were hit too, with the Russell 2000 (RUT) index sliding 3.3%.

Bonds rallied, lowering the corresponding yields, as investors sought the comparatively safe haven of government debt. The dollar tumbled versus the yen and euro. Oil prices gained and gold prices soared more than $55 an ounce.

"The whole thing is a mess," said Kelli Hill, Portfolio Manager at Ashfield Capital Partners. "When Bear Stearns collapsed, everyone thought that was the capitulation, but it wasn't. It's ongoing."

The fallout from the housing and credit market collapse "ripples through the entire financial industry and is stretching to other industries," she said. "The question everyone is asking is 'what's going to fix this?'"

Stocks rose Tuesday on bets that the Federal Reserve's decision to hold interest rates steady means the economic outlook has not deteriorated. Wall Street also benefited from diminishing fears about AIG's solvency amid reports that the government would step in to save the insurer.

Those reports were confirmed late Tuesday night, after the Federal Reserve said it was extending a two-year, $85 billion bridge loan to the troubled insurer in exchange for a stake in AIG that could reach 80%. AIG will have to pay back the loan in full by selling off some of its assets.

AIG had been on the verge of collapse as it scrambled to raise cash in the aftermath of the subprime mortgage collapse and subsequent credit crunch. AIG (AIG, Fortune 500) shares plunged 41% Wednesday morning. (Full story)

But rather than reassure investors, the deal seemed to add to the uncertainty surrounding financial markets, coming six months after the near-collapse and government rescue of Bear Stearns.

A variety of financial stocks tumbled in tandem, including Goldman Sachs (GS, Fortune 500), which fell 13% and Morgan Stanley (MS, Fortune 500), which lost 20% despite reporting better-than-expected third-quarter results late Tuesday.

The Philadelphia KBW Bank (BKX) index fell 6% and the Amex Securities Broker/Dealer (XBD) index fell 7%.

Barclay's and Lehman Brothers: Late Tuesday, Barclays said it will buy Lehman's North American investment banking and capital markets businesses for $250 million in cash, as well as Lehman's New York headquarters and two New Jersey data centers for $1.5 billion. (Full story)

Barclays (BCS) had walked away from a deal to buy the troubled company outright over the weekend. Bank of America (BAC, Fortune 500) also walked away from a possible merger, and wound up buying Merrill Lynch (MER, Fortune 500) in a $50 billion stock deal.

Unable to find a buyer, Lehman Brothers (LEH, Fortune 500) filed for the biggest bankruptcy in history on Monday.

Although the government helped in trying to facilitate a deal for Lehman Brothers, it was reportedly unwilling to finance any buyout, as opposed to what it did with Bear Stearns in March and AIG. The government's reluctance to step in contributed to the reluctance of other banks to strike a deal with the troubled company. (Full story)

The government reportedly helped AIG in order to prevent a bankruptcy that would have had broad implications for the U.S. and global markets. By comparison, the Lehman fallout was seen as more contained.

The government is also reportedly helping to facilitate a deal for the purchase of Washington Mutual (WM, Fortune 500), the mortgage lender that has also been hit hard in the housing market collapse. Any deal, however, would reportedly not include government financing. (Full story)

Lehman lost 60% Wednesday, while Barclays was little changed. Bank of America fell 6.6%, Merrill Lynch fell 9% and WaMu fell 6.5%.

Morgan Stanley: The financial services giant reported better-than-expected third-quarter sales and earnings after the close Tuesday, one day ahead of schedule. Morgan (MS, Fortune 500) shares fell 35% Wednesday, dragged down by the broader market selloff and amid rumors that it could be looking for a buyer.

Housing: Construction of new houses and apartments fell to their lowest level in 17 years last month, according to a government report Wednesday. (Full story)

Fuel prices: Oil prices rose, bouncing back after several down sessions, as investors eyed the developments on Wall Street. Prices had been higher ahead of the release of the government's mixed reading on weekly inventories. (Full story).

U.S. light crude oil for October delivery rose $1.92 to $93.07 after settling at a seven-month low on Tuesday.

Gas prices rose overnight, gaining for the 8th day in a row, according to a national survey of credit card activity.

Other markets: In global trade, European markets fell in the afternoon and Asian stocks ended lower with the exception of the Japanese Nikkei.

Treasury prices rallied as investors sought safety in government debt, lowering the yield on the benchmark 10-year note to 3.39% from 3.49% late Tuesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and the yen.

COMEX gold for December delivery rallied $55.70 to $836.20 an ounce. To top of page

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