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None of Washington Mutual, Inc.’s or Washington Mutual Bank’s unsecured debt is subject to ratings-based financial covenants that would result in acceleration or early maturity events or defaults. The company does not expect the impact of S&P’s actions on borrowings, collateral or margin requirements to be material.”
WaMu’s capital levels at quarter end are expected to remain significantly above the levels required of “well capitalized” institutions. The company’s outlook for expected credit losses is unchanged. Please see WaMu’s September 12 Form 8-K filing for more information.
In light of recent events, WaMu also noted in the financial services industry that it has de minimis trading exposure to Lehman Brothers Holdings and no trading exposure to AIG. The company has not experienced any significant trading losses related to counterparty defaults or disruptions and does not believe that ongoing market disruptions will result in any such losses. All derivative trading relationships enjoy the benefit of bilateral collateral arrangements designed to fully protect each party in the event of default. The company maintains derivative and repo lines with a wide range
Damn, es down another 15 points right now since overnight reopen. 1176 going to be tested.
Buzz
But they can't afford cars and homes when food and energy costs are so high. Expendable income has dimished. Remember, the upper 20% of earners in this country account for 50% of retail. When the other 80% stop spending on discretionary because all their discretionary funds are going to food and energy and other staples, there can be no economic rebound. That is the kunundrum the fed is facing. I think they pretty much have to cut rates, and we suffer through a few tough years.
Buzz
But when greenspan cut rates, oil was at 25.00 a barrel, inflation was running at less than 1% annually, and the unemployment rate was under 5%.
Buzz
what's that going to do to the dollar, inflation, and commodity prices? They have to cut, but it's not going to help. It's just going to fuck the consumer.
Buzz
Goldman Sachs Group Inc.'s spreads widened to 3 percent, from 2 percent Friday, while Morgan Stanley's increased to 4.5 percent from 2.5 percent.
By contrast, Washington Mutual's spreads stood at about 20 percent on Monday afternoon, and AIG spreads widened to about 13 percent, Blum said.
When the spread or difference in yields on the swap and a government bond of comparable maturity widen, debt holders believe there is a greater chance of default. Last week, the cost to insure the debt of Seattle-based Washington Mutual rose to a point where investors essentially acknowledged it was more likely than not the bank would default.
We got us a bonafide brown Monday. eom
it's called arbitrage
Fed taking equity? Fed now taking the risk? Fucking insane.
Buzz
doesn't matter:
Posted by: BuzzOnDaBeach Date: Tuesday, September 09, 2008 3:10:33 PM
In reply to: None Post # of 167161
I now believe dow will test 10K by end of oct. eom
Hey there, I had to have some big juevos to make a call like that.
hehehehehe
Buzz
I'll go out on a limb and say the markets will finish red today.
Buzz
Federal Reserve announces new efforts to shore up financial markets by expanding loan programs
WASHINGTON (AP) -- The Federal Reserve announced late Sunday several steps to cope with the worst credit crisis in decades, including broadening the types of assets that investment banks can put up to get emergency loans from the Fed.
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The action came as U.S. and foreign commercial banks were hashing out a plan to inoculate the global financial system against the possible failure of Lehman Brothers.
Federal Reserve Chairman Ben Bernanke announced the actions in a statement, saying they were being taken after a weekend of discussions with officials from the Treasury Department and the Securities and Exchange Commission and top executives of financial firms.
Those talks were aimed at seeing whether another financial institution would be willing to take over venerable investment bank Lehman Brothers and failing that, how other institutions could pool resources to protect the global financial system.
Bernanke said the discussions had been aimed at identifying "potential market vulnerabilities in the wake of an unwinding of a major financial institution and to consider appropriate official sector and private sector responses."
"The steps we are announcing today, along with significant commitments from the private sector, are intended to mitigate the potential risks and disruptions to markets," Bernanke said.
Besides expanding the types of collateral that can be used, Bernanke said the Fed would also increase the frequency of some of the auctions being used to get loans to banks from every other week to a weekly basis.
In a separate statement Treasury Secretary Henry Paulson said he supported the Fed's moves and said the actions taken should "strengthen and enhance our financial markets. These initiatives will be critical to facilitating liquid, smooth functioning markets and addressing potential concerns in the credit markets."
Paulson, who was involved in three days of talks at the New York Federal Reserve Bank, said he appreciated the efforts by other financial firms involved in the discussions to promote "orderliness and stability in our financial markets as we work through this extraordinary environment."
Christopher Cox, the chairman of the Securities and Exchange Commission, said in a statement that the SEC was working to make sure that the customers of Lehman's broker-dealer operations "will not be adversely affected by recent market events." Cox was also involved in the weekend talks that failed to find a buyer for Lehman Brothers.
The Fed's steps represented the latest in a series of actions the central bank has taken over the past year to try to protect the U.S. financial system from a credit crisis that erupted as a result of rising loses in subprime mortgage lending.
The central bank in August 2007 invited commercial banks to make use of its emergency loan program if they found themselves short of cash. Then last December, it expanded the program to auction off loans to cash-strapped banks, seeking to overcome a perceived stigma from banks getting direct assistance from the Fed.
Last March, it implemented the biggest expansion in the emergency loan program since the Great Depression by announcing that investment banks could obtain money from the Fed. That action came after the near-collapse of investment bank Bear Stearns, which was taken over with the help from a $29 billion Fed loan by JP Morgan Chase and Co.
Lehman says filing Chapter 11 bankruptcy
Monday September 15, 1:21 am ET
Storied Wall Street firm Lehman Brothers says filing Chapter 11 bankruptcy
NEW YORK (AP) -- Storied Wall Street firm Lehman Brothers Holdings Inc. says it intends to file for Chapter 11 bankruptcy.
The 158-year-old Lehman was crippled by $60 billion in soured real-estate holdings and unable to find an investment partner to throw it a lifeline.
Lehman said in a statement early Monday that none of its broker-dealer subsidiaries or other units would be included in the Chapter 11 filing in U.S. bankruptcy court in New York.
The investment bank said it is exploring the sale of its broker-dealer operations and is in "advanced discussions" to sell its investment management unit.
ES futs down now 45 pts. We may actually see a black monday tomorrow - or I'll wake up, they've rallied all night, and we open flat, lol. Don't think so.
Off to bed. Going to be a busy trading day in futs tomorrow.
Buzz
I don't think shareholders would approve this deal, and this reeks of fed intervention. Futures is ignoring the news and focusing on lehman - my guess is, this deal will never happen.
Buzz
Interesting MER post from yahoo
This deal makes no sense at all. MER on the verge of BK but BAC wants to pay top premium for it when in reality it didn't have to? A company that which has no end in sight of possible write-downs in toxic assets? I don't get it.
The only rationale for this kind of deal to happen is for the Fed intervening behind the scene to save sovereign funds invested in MER from evaporating due to "implicit" guarantee by the US Gov't when they did. I believe this is a time buying tactic orchestrated by Fed for disgruntled sovereign funds to unload MER at the price, and once unloaded BAC will walk away from the deal because they know their shareholders will never approve at such inflated price. Besides, how the hell would BAC finance $44 billions in this cash-strapped environment. I believe this is a market scheme ordered by the Fed to create a brief window of opportunity for disgruntled sovereign funds to pull their money out of MER intact after suffering a streak of devastating losses. I don't see BAC absorbing MER for $44b in the end. So this is the only rationale that makes sense to me.
prolly next to bk
How are those .68 buys on fre treating you? OOOOOPS< just looked, not well. Hope you took my advice and sold in the one teens. could see .0001 tomorrow.
Buzz
with futures down 40 points on the s and p 500 right now, although we may whipsaw at the open, if they stay this way, we're looking at a 400 point gap down in the dow.
Buzz
Matt is such a prude
weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee
outta da pokey
Hey mike,
go fuck yourself.
:) but smile when you do it
Buzz
ES currently down exactly 40 points from the 4:15 close on friday and you're worried about your friggin free trades.
Buzz
Thanks for stopping by and sharing your wisdom
ROFLMAO
Never mind, no bribes in your case. I think I remember you saying you have a tramp stamp. Violates one of my rules for sex:
1. No tramp stamps
2. No fat chicks
3. No chicks under 18 or over 40
Buzz
I may have to delete you for that post just on principle. I can be bribed with sex, however.
Buzz
cmkx all over again
i'm double entendre-ing.
And sizable deposits???
ur a woman, however, so all you care about is speedy withdrawls.
Buzz
Zeptepi is an Ancient Egyptian term. Mythologically, zeptepi refers to THE first time - the time when the world was created and the Gods walked the earth. This was a time of perfection, when all was well and everything worked as it should.
Because we believe in freedom of speech, unless specific board rules are violated.
ignore is the root word of ignorance
just ask brig
Buzz
News out MER buyout official 29 a share, but the futures market doesn't seem to care or like the price. Now down 40 pts on the ES. ouch.
Buzz
Hope so, I opened a back up account there and bofa to spread out from wamu.
As you and I discussed, I do love wamu. They are the best at customer service. Bofa sucks.
Buzz
At what point is BofA exceeding gov. size regulations? They appear on track to be the only viable bank in the US at this point.
Buzz
Black Monday? ES down 32 pts right now. That equates to dow opening down about 300 pts. Market doesn't like lehman news. Could be saying goodbye to dow 11k and s and p 1200 for quite a while.
Buzz
Since that gap has filled now in less than three days, it's no longer a breakaway gap, just a trading gap. Technically, it wasn't a breakaway in the first place since it wasn't breaking away from any chart pattern, which is the definition of a breakaway gap. All this according to gap theory.
High volume suggests a short covering snap back. Nothing more.
Buzz