I usually have a lot to say. I just know when to keep it to myself.
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AIG, facing liquidity crisis, seeks Fed lifeline
By Lilla Zuill
54 minutes ago
NEW YORK (Reuters) - Insurer American International Group Inc (AIG.N), working to stave off rating downgrades and shore up the capital of its holding company, has made an unprecedented approach to the Federal Reserve seeking $40 billion in short-term financing, the New York Times said.
Chief Executive Robert Willumstad reached out to the Fed late on Sunday, according to reports in the Times, the Wall Street Journal and business news channel CNBC.
AIG's scramble to secure a Fed lifeline came late into one of the worst-ever days on Wall Street, with Lehman Bros (LEH.N) on the verge of collapse, and Bank of America (BAC.N) moving to takeover Merrill Lynch & Co (MER.N).
The Fed normally oversees monetary policy and supervision of banks, but CNBC said AIG was seeking the funds as a temporary measure and planned to repay the Fed with the proceeds from asset sales.
Rating agencies have threatened to downgrade AIG's ratings by Monday morning, said the New York Times.
AIG officials did not immediately respond to requests for comment.
The company, until recently the world's biggest insurer by market capitalization, has been attempting to hammer out an emergency strategic plan after its shares fell nearly 50 percent last week on fears it faced a liquidity crisis.
AIG has been negotiating with various parties including officials from the New York Insurance Department and private equity firms as it seeks ways to free up capital, raise new capital and protect policyholders.
Regulators including New York Insurance Superintendent Eric Dinallo have been holed up at AIG's New York offices over the past two days trying to hammer out a plan.
"We are working to craft a solution to protect the company and policyholders," said a person from the New York Insurance Department, who asked not to be named.
Former AIG CEO Maurice "Hank" Greenberg, who ran the company for nearly four decades, was not involved in any of the discussions, said his spokesman, Glen Rochkind.
"He repeatedly offered to assist in any way he could," added Rochkind.
CASH CRUNCH
AIG, hit by $18 billion in losses over the past three quarters from guarantees it wrote on mortgage derivatives, has had to act quickly after Standard & Poor's said on Friday it may downgrade AIG's ratings.
Ratings downgrades could force AIG to post up to $14.5 billion more in collateral, according to a regulatory filing last month.
Downgrades could also be detrimental to AIG's insurance business, since some policies carry clauses that nullify a contract in the event of downgrades below a certain level.
Over the weekend, the insurer has been working on a three-part plan involving asset sales, shifting regulated capital from the insurance operations to the holding company, and working with private equity investors, said a person familiar with the negotiations.
The New York Times said AIG's plans to shift capital had to be put on ice because of the time and complexity involved, and that private equity firms withdrew interest over the company's precarious financial health.
Parties in capital-raising talks with AIG included buyout firms Kohlberg Kravis Roberts & Co (KKR.UL) and J.C. Flowers & Co, another person familiar with the talks said.
An AIG spokesman earlier confirmed the company was evaluating a wide range of options, including asset sales.
Media reports have said that one of the companies on the block was AIG's highly profitable aircraft leasing arm, but the spokesman declined to confirm this was the case.
In late June, AIG said the unit, International Lease Finance Corp, would remain part of AIG.
AIG was founded in China 89 years ago. In the years since, largely under Greenberg's watch, it grew into one of the world's largest insurers, spanning 130 countries and territories and serving 74 million customers.
Greenberg stepped down in 2005, in the midst of an accounting scandal. His successor, Martin Sullivan, was replaced by Willumstad in June after investors grew disgruntled over its three quarters of losses.
Greenberg owns or controls about 12 percent of AIG's stock, making him the largest shareholder.
(Reporting by Lilla Zuill; Editing by Ted Kerr
http://news.yahoo.com/s/nm/20080915/bs_nm/aig_dc
AIG, facing liquidity crisis, seeks Fed lifeline
By Lilla Zuill
54 minutes ago
NEW YORK (Reuters) - Insurer American International Group Inc (AIG.N), working to stave off rating downgrades and shore up the capital of its holding company, has made an unprecedented approach to the Federal Reserve seeking $40 billion in short-term financing, the New York Times said.
Chief Executive Robert Willumstad reached out to the Fed late on Sunday, according to reports in the Times, the Wall Street Journal and business news channel CNBC.
AIG's scramble to secure a Fed lifeline came late into one of the worst-ever days on Wall Street, with Lehman Bros (LEH.N) on the verge of collapse, and Bank of America (BAC.N) moving to takeover Merrill Lynch & Co (MER.N).
The Fed normally oversees monetary policy and supervision of banks, but CNBC said AIG was seeking the funds as a temporary measure and planned to repay the Fed with the proceeds from asset sales.
Rating agencies have threatened to downgrade AIG's ratings by Monday morning, said the New York Times.
AIG officials did not immediately respond to requests for comment.
The company, until recently the world's biggest insurer by market capitalization, has been attempting to hammer out an emergency strategic plan after its shares fell nearly 50 percent last week on fears it faced a liquidity crisis.
AIG has been negotiating with various parties including officials from the New York Insurance Department and private equity firms as it seeks ways to free up capital, raise new capital and protect policyholders.
Regulators including New York Insurance Superintendent Eric Dinallo have been holed up at AIG's New York offices over the past two days trying to hammer out a plan.
"We are working to craft a solution to protect the company and policyholders," said a person from the New York Insurance Department, who asked not to be named.
Former AIG CEO Maurice "Hank" Greenberg, who ran the company for nearly four decades, was not involved in any of the discussions, said his spokesman, Glen Rochkind.
"He repeatedly offered to assist in any way he could," added Rochkind.
CASH CRUNCH
AIG, hit by $18 billion in losses over the past three quarters from guarantees it wrote on mortgage derivatives, has had to act quickly after Standard & Poor's said on Friday it may downgrade AIG's ratings.
Ratings downgrades could force AIG to post up to $14.5 billion more in collateral, according to a regulatory filing last month.
Downgrades could also be detrimental to AIG's insurance business, since some policies carry clauses that nullify a contract in the event of downgrades below a certain level.
Over the weekend, the insurer has been working on a three-part plan involving asset sales, shifting regulated capital from the insurance operations to the holding company, and working with private equity investors, said a person familiar with the negotiations.
The New York Times said AIG's plans to shift capital had to be put on ice because of the time and complexity involved, and that private equity firms withdrew interest over the company's precarious financial health.
Parties in capital-raising talks with AIG included buyout firms Kohlberg Kravis Roberts & Co (KKR.UL) and J.C. Flowers & Co, another person familiar with the talks said.
An AIG spokesman earlier confirmed the company was evaluating a wide range of options, including asset sales.
Media reports have said that one of the companies on the block was AIG's highly profitable aircraft leasing arm, but the spokesman declined to confirm this was the case.
In late June, AIG said the unit, International Lease Finance Corp, would remain part of AIG.
AIG was founded in China 89 years ago. In the years since, largely under Greenberg's watch, it grew into one of the world's largest insurers, spanning 130 countries and territories and serving 74 million customers.
Greenberg stepped down in 2005, in the midst of an accounting scandal. His successor, Martin Sullivan, was replaced by Willumstad in June after investors grew disgruntled over its three quarters of losses.
Greenberg owns or controls about 12 percent of AIG's stock, making him the largest shareholder.
(Reporting by Lilla Zuill; Editing by Ted Kerr
http://news.yahoo.com/s/nm/20080915/bs_nm/aig_dc
10 of the WORLDS BIGGEST BANKS are creating a 70 billion
dollar borrowing facililty.- hot off the press
Does anyone have an issue with this like I do?
http://biz.yahoo.com/rb/080914/lehman_banks_facility.html?.v=1
Goldman Sachs has earnings on Tuesday. ....sigh
Bank of America buying Merrill- 70% premium on Fri Close
Bank of America buying Merrill
http://biz.yahoo.com/ap/080914/merrill_bank_of_america.html
A lot of folks were thinking the same thoughts
as you. I for one have been keeping busy
until the markets get a little more bull-friendly.
I realize now we're looking at next spring for
an overhaul- on perception, confidence, spending
as well as the actual numbers that prove the
ebb and flow of tough times coming to an end.
Conference/Events Calendar for the week of September 15th-19th: :
Events of interest for the week of, September 15th - 19th, include: Monday: ATVI Analyst Meeting; HPQ Enterprise-Focused Securities Analyst Meeting; RVBD Vision Day; WNS Analyst Meeting; BAC, A, GNW, NFLX, SEE, BRCD, QCOM, V at Bank of America Securities Annual Investment Conf; VIAP, NVLT, CML, DSTI, UTK at Merriman Curhan Ford, & Co. Investor Summit...
Tuesday: MNKD Analyst Day; AIQ Investor Day; ATR 2008 Analyst Day; CSCO to Host Financial Analyst Conf; DOW, CYT, NCX, ASH, ECL at Credit Suisse Chemical Conf; FGXI, GCO, HIBB, OXM, PERY at BB&T Capital Markets Consumer Softlines 1x1 Conf; FGXI, GCO, HIBB, OXM, PERY, SCVL at BB&T Capital Markets Consumer Softlines 1x1 Conf; HNT, EOG, ESI, PG, GPRO, KSS at Bank of America Securities Annual Investment Conf; ICO, WLT, NCOC, USAP, CRS at Davenport & Company, LLC Metals & Mining Conf; MWV, IP, PCL, WY, CSAR at UBS Global Paper & Forest Products Conf; NCC, WABC, ZION, COBZ, WFCT at RBC Capital Markets Financial Institutions Conf; OPTR at CanaccordAdams Anti-Infectives Conf; PRE, RNR, VR, AHL at Fox-Pitt, Kelton Inc. Bermuda in Boston Conf; SBLK, GLF, NM, EGLE, GNK at Jefferies & Co. Shipping, Logistics & Offshore Services Conf; TOT 2008 Mid-Year Review in New York; Fed Policy Announcement...
Wednesday: BRCD Analyst Meeting; ABAX, GCO, RRD, AFCE, HLIT at CL King and Associates Best Ideas Conf; BMO, ANL, CLP, CSA, EGP, PKY at BMO Capital Markets North American Real Estate Conf; BPFH, SOV, CINF, FMR, HCC at RBC Capital Markets Financial Institutions Conf; BPO, XIN, KIM at Merrill Lynch Global Real Estate Conf; CCK, AGO, COP, PTV, CXO at Bank of America Securities Annual Investment Conf; POT, DD, AGU, CF, TRA, PX, APD at Credit Suisse Chemical Conf; PRGN, TDW, KEX, TBSI, SSW, SFL at Jefferies & Co. Shipping, Logistics & Offshore Services Conf; VRS at UBS Global Paper & Forest Products Conf; WIN, Q, EQ, ATVI, FRP, AMT at Goldman Sachs Communacopia Conf...
Thursday: VLTR Analyst Meeting; CBI, DY, EME, FIX, KBR at D.A. Davidson & Co. 7th Annual Engineering & Construction Conf; CCRN at Longbow Research Multi-Industry One-on-One Conf; DAL, UAUA, NWA, AMR, CAL at Calyon Securities Airline Conf; EMN, FOE, WLK, IPHS, OLN, MON at Credit Suisse Chemical Conf; MFB, ICFI, USG, PWAV, SRDX at CL King and Associates Best Ideas Conf; OKE, OKS at UBS Master Limited Partnership Conf; PSA at Merrill Lynch Global Real Estate Conf; RMG, LVLT, MCO, GLUU, SNI at Goldman Sachs Communacopia Conf...
Friday: JEC, WLDN, FLR, AZZ at D.A. Davidson & Co. 7th Annual Engineering & Construction Conf; OKE, OKS at UBS Master Limited Partnership Conf.
Banks Fear Next Move by Shorts - NYTimes
In May, David Einhorn, one of the most vocal short sellers on Wall Street, made no secret he was betting against Lehman Brothers. Now, some investors are afraid that fund managers like him will take advantage of the climate of fear stirred up by the troubles of Lehman to single out other weak financial firms whose declining share prices would bring them rich rewards.
At emergency meetings over the weekend, the heads of major financial institutions urged Timothy F. Geithner, the president of the New York Fed, and Treasury Secretary Henry M. Paulson Jr., to consider having the Securities and Exchange Commission reinstate a temporary rule to limit the risky but potentially lucrative practice of betting on a firm’s falling share price, according to two people who were briefed on, but did not attend, the meetings.
They are concerned that short sellers might fix their gaze on other big financial institutions. But Wall Street may be breathing easier after one company frequently mentioned, Merrill Lynch, began advanced talks on Sunday to sell itself, and another, the insurance giant American International Group, moved toward a restructuring in an effort to strengthen its financial position.
In July, the S.E.C. briefly halted a practice known as naked short selling after speculators placed large bets that shares of Fannie Mae and Freddie Mac, the troubled mortgage giants, would decline. That also made it harder, though not impossible, to short the stocks of 19 financial institutions, including brokerage firms like Lehman Brothers and Morgan Stanley.
The investment tactic of betting a stock will slide is not new, of course. But it has become particularly controversial in the last year, when Wall Street firms started to be singled out as the credit crisis turned the financial sector upside down.
Short sellers and their free market supporters say they have done nothing wrong. If anything, they say, they have merely spotted problems at financial institutions ahead of everyone else, making them a useful early warning system for the rest of the market. Critics believe they have contributed to the speed of the decline of any number of financial shares.
Short-selling against financial institutions has proved particularly lucrative for hedge funds. Mr. Einhorn’s accusations included a complaint that Lehman had been failing to properly account for its marks on troublesome holdings.
Lehman’s shares were already under pressure when he took the microphone at a large industry gathering in May to lay out his case against the investment bank. The firm, he told the crowd, had used “accounting ingenuity” to avoid large write-downs and remained tainted by bad commercial real estate investments.
Mr. Einhorn stood to profit by convincing people of his view: He had been betting against Lehman’s stock — it stood at around $40 when he spoke — since July 2007, when it traded for around $70.
While Lehman’s shares have declined as investors lost confidence in its ability to repair its balance sheet, in the four months after Mr. Einhorn’s remarks, short-selling played a role in the erosion. A rapid plunge in the shares to below $4 last week created the conditions that brought the 158-year old firm to its knees on Sunday.
For all his boldness, Mr. Einhorn is aware of the havoc that bank failures can create. “We would not win if Lehman went down and took the whole financial system with it,” Mr. Einhorn said in an interview in June. “An actual collapse of Lehman — that would not be a good thing.”
Other hedge fund managers recognize the dangers and the harm that is befalling bank employees who have been paid in their companies’ stocks. “My children, their playmates’ fathers work at Lehman,” said one manager who is short Lehman and asked to remain anonymous, citing the fragility of the situation. “Obviously I had nothing to do with what happened, and the idea that I profited, and they got clobbered, and I’ve got to see them on Monday is awkward. I feel badly for them.”
Mr. Einhorn was never shy with his criticism of Lehman. He pointed to the bank’s investments in two real estate companies, Archstone and Sun Cal, and said Lehman had not marked its mortgage assets down enough. “Lehman is one of the deniers,” he said in the June interview.
To many, Mr. Einhorn simply saw the writing on the wall early. And, hedge fund managers say, Lehman executives failed to realize how much credibility Mr. Einhorn has in the investor community. Lehman might have fared better if it had raised capital or taken write-offs far earlier, as Mr. Einhorn suggested.
But to some in the world of finance, Mr. Einhorn and investors like him are dangerous.
“It is really like taking a baseball bat to someone who is down,” said Jim Hardesty, president of Hardesty Capital Management in Baltimore. “A bunch of these guys with very large bats are circling around certain companies and banging them over and over again. It is unsportsmanlike conduct.”
“My worst nightmare would be waking up one day and listening to David Einhorn talk about our company and wanting to short myself,” said Larry Robbins, chief executive of the hedge fund Glenview Capital, as he started his own speech at the May conference, the third event that included Mr. Einhorn’s criticisms of Lehman.
Hedge fund managers who focus on shorting companies stand out in the industry in an otherwise terrible trading year. Hedge funds are down more than 4 percent but short-focused hedge funds are up 9.76 percent, said Hedge Fund Research.
By coincidence, Mr. Einhorn’s fund, Greenlight Capital, is down 4.3 percent this year through Aug. 22, according to HSBC (he also invests in stocks, as well as shorting them).
His is a so-called long-short fund, which means he invests $2 buying shares in companies for every $1 he places shorting other companies. One company he took a positive view on was New Century, one of the first mortgage lenders to file for bankruptcy.
Mr. Einhorn said in June that he receives far more criticism for his short positions than he does for the positive bets he makes, which he also sometimes discusses publicly. And, he said, executives at companies are biased in the views they provide because they own so many shares of their companies’ stocks.
Mr. Einhorn declined to comment for this article and a spokesman would not say if he was still short Lehman’s stock or on what day he sold his position.
Eric Dash contributed reporting.
http://www.nytimes.com/2008/09/15/business/15short.html?ref=business
Lehman Expected to File for Bankruptcy Protection
Published: September 14, 2008
In one the most extraordinary days in Wall Street’s history, Merrill Lynch is near an 11th-hour deal with Bank of America to avert a deepening financial crisis while another storied securities firm, Lehman Brothers, hurtled toward liquidation, according to people briefed on the deal.
DealBook: Lehman Expected to File for Bankruptcy Protection (September 14, 2008)
The dramatic turn of events was prompted by the cataclysm of losses that has shaken the American financial industry over the last 14 months.
The moves came after a weekend of frantic negotiations between federal officials and Wall Street executives over how to avert a downward spiral in the markets. Questions still remain about how the market will react and whether other firms may still falter like A.I.G., the large insurer, and Washington Mutual, both of whose stocks fell precipitously last week.
Coming just a week after the government took control of mortgage lenders Fannie Mae and Freddie Mac, the magnitude of the industry’s reshaping is staggering: two of the most powerful firms on Wall Street, Merrill Lynch and Lehman, will disappear.
The weekend’s once unthinkable outcome came after a series of emergency meetings at the Federal Reserve building in downtown Manhattan in which the fate of Lehman hung in the balance. In the meeting Federal Reserve officials and the leaders of major financial institutions were trying to complete a plan to rescue the stricken investment bank.
But as the weekend unfolded, Barclays and Bank of America, which had both considered buying all or part of Lehman, decided that they could not reach a deal without financial support from the federal government or other banks.
As a result, people briefed on the matter said late Sunday that Lehman Brothers would file for bankruptcy protection, in the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago.
Lehman will seek to place its parent company, Lehman Brothers Holdings, into bankruptcy protection, as its subsidiaries remain solvent while the parent firm liquidates, these people said. A consortium of banks will provide a financial backstop to help provide an orderly winding down of the 158-year-old investment bank. And the Federal Reserve has agreed to accept lower-quality assets in return for loans from the government.
Lehman has retained the law firm Weil, Gotshal & Manges. The firm’s restructuring head, Harvey Miller, also spearheaded Drexel’s bankruptcy filing in February 1990.
As efforts to acquire Lehman faltered, Bank of America turned to Merrill Lynch and offered at least $38.25 billion in stock for that investment bank, people briefed on the negotiations said. The deal, valued at $25 to $30 a share, could be announced as soon as Sunday night, these people said. Merrill shares closed at $17.05 on Friday.
Merrill’s chief executive, John A. Thain, and Kenneth D. Lewis, Bank of America’s chief executive, initiated talks on Saturday, prompted by the reality that a Lehman bankruptcy would ripple through Wall Street and further cripple Merrill Lynch, people briefed on the negotiations said.
Merrill’s 15,000 brokers will be combined with Bank of America’s smaller group of wealth advisers. The entity will be run by Robert McCann, the head of Merrill’s global wealth management business.
Mr. Fleming, Merrill’s president, will be president of the combined bank’s corporate and investment bank while Thomas Montag, a former Goldman executive who started at Merrill in August, will head all the merged company’s all risk, trading and institutional sales.
The leading proposal to rescue Lehman had been to divide the bank into two entities, a “good bank” and a “bad bank.” Under that last scenario, Barclays would have bought the parts of Lehman that have been performing well, while a group of 10 to 15 Wall Street companies would agree to absorb losses from the bank’s troubled assets, according to two people briefed on the proposal. Taxpayer money would not be included in such a deal, they said.
But that plan fell apart on Sunday, all but assuring that Lehman would be forced to liquidate.
The overarching goal of the weekend talks had been prevent a quick liquidation of Lehman, a bank that is so big and so interconnected with others that its abrupt failure would send shock waves through the financial world. Of deep concern is what impact a Lehman failure would have on other securities firms, insurance companies and banks, which have come under mounting pressure in the markets.
Even as Lehman and Merrill played out, the insurance company, the American International Group, was planning a major reorganization and a sale of its aircraft leasing business and other units to stabilize its finances, a person briefed on the company’s strategy said on Sunday.
A.I.G. became one of the focuses at an emergency gathering of Wall Street executives over the weekend, and was trying to arrange a capital infusion in the face of possible credit downgrades.
It was unclear whether A.I.G. would succeed in its capital search, but a person briefed on the discussions said it was seeking more than $40 billion even as it tried to sell assets to shore up its financial footing.
Among the businesses likely to be sold is A.I.G.’s aircraft leasing business, the International Lease Finance Corporation. Founded in 1973, the business has nearly 1,000 planes in its fleet.
Investors, afraid that A.I.G. would have to absorb further write-downs in its already damaged mortgage securities and collateralized debt obligations, have driven down the company’s shares in recent days. The stock closed Friday at $12.14 a share, a decline of 46 percent for the week.
Eric Dash, Louise Story and Michael de la Merced contributed reporting.
http://www.nytimes.com/2008/09/15/business/15lehman.html?_r=1&partner=rssuserland&emc=rss&pagewanted=all&oref=slogin
Lehman Expected to File for Bankruptcy Protection
Published: September 14, 2008
In one the most extraordinary days in Wall Street’s history, Merrill Lynch is near an 11th-hour deal with Bank of America to avert a deepening financial crisis while another storied securities firm, Lehman Brothers, hurtled toward liquidation, according to people briefed on the deal.
DealBook: Lehman Expected to File for Bankruptcy Protection (September 14, 2008)
The dramatic turn of events was prompted by the cataclysm of losses that has shaken the American financial industry over the last 14 months.
The moves came after a weekend of frantic negotiations between federal officials and Wall Street executives over how to avert a downward spiral in the markets. Questions still remain about how the market will react and whether other firms may still falter like A.I.G., the large insurer, and Washington Mutual, both of whose stocks fell precipitously last week.
Coming just a week after the government took control of mortgage lenders Fannie Mae and Freddie Mac, the magnitude of the industry’s reshaping is staggering: two of the most powerful firms on Wall Street, Merrill Lynch and Lehman, will disappear.
The weekend’s once unthinkable outcome came after a series of emergency meetings at the Federal Reserve building in downtown Manhattan in which the fate of Lehman hung in the balance. In the meeting Federal Reserve officials and the leaders of major financial institutions were trying to complete a plan to rescue the stricken investment bank.
But as the weekend unfolded, Barclays and Bank of America, which had both considered buying all or part of Lehman, decided that they could not reach a deal without financial support from the federal government or other banks.
As a result, people briefed on the matter said late Sunday that Lehman Brothers would file for bankruptcy protection, in the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago.
Lehman will seek to place its parent company, Lehman Brothers Holdings, into bankruptcy protection, as its subsidiaries remain solvent while the parent firm liquidates, these people said. A consortium of banks will provide a financial backstop to help provide an orderly winding down of the 158-year-old investment bank. And the Federal Reserve has agreed to accept lower-quality assets in return for loans from the government.
Lehman has retained the law firm Weil, Gotshal & Manges. The firm’s restructuring head, Harvey Miller, also spearheaded Drexel’s bankruptcy filing in February 1990.
As efforts to acquire Lehman faltered, Bank of America turned to Merrill Lynch and offered at least $38.25 billion in stock for that investment bank, people briefed on the negotiations said. The deal, valued at $25 to $30 a share, could be announced as soon as Sunday night, these people said. Merrill shares closed at $17.05 on Friday.
Merrill’s chief executive, John A. Thain, and Kenneth D. Lewis, Bank of America’s chief executive, initiated talks on Saturday, prompted by the reality that a Lehman bankruptcy would ripple through Wall Street and further cripple Merrill Lynch, people briefed on the negotiations said.
Merrill’s 15,000 brokers will be combined with Bank of America’s smaller group of wealth advisers. The entity will be run by Robert McCann, the head of Merrill’s global wealth management business.
Mr. Fleming, Merrill’s president, will be president of the combined bank’s corporate and investment bank while Thomas Montag, a former Goldman executive who started at Merrill in August, will head all the merged company’s all risk, trading and institutional sales.
The leading proposal to rescue Lehman had been to divide the bank into two entities, a “good bank” and a “bad bank.” Under that last scenario, Barclays would have bought the parts of Lehman that have been performing well, while a group of 10 to 15 Wall Street companies would agree to absorb losses from the bank’s troubled assets, according to two people briefed on the proposal. Taxpayer money would not be included in such a deal, they said.
But that plan fell apart on Sunday, all but assuring that Lehman would be forced to liquidate.
The overarching goal of the weekend talks had been prevent a quick liquidation of Lehman, a bank that is so big and so interconnected with others that its abrupt failure would send shock waves through the financial world. Of deep concern is what impact a Lehman failure would have on other securities firms, insurance companies and banks, which have come under mounting pressure in the markets.
Even as Lehman and Merrill played out, the insurance company, the American International Group, was planning a major reorganization and a sale of its aircraft leasing business and other units to stabilize its finances, a person briefed on the company’s strategy said on Sunday.
A.I.G. became one of the focuses at an emergency gathering of Wall Street executives over the weekend, and was trying to arrange a capital infusion in the face of possible credit downgrades.
It was unclear whether A.I.G. would succeed in its capital search, but a person briefed on the discussions said it was seeking more than $40 billion even as it tried to sell assets to shore up its financial footing.
Among the businesses likely to be sold is A.I.G.’s aircraft leasing business, the International Lease Finance Corporation. Founded in 1973, the business has nearly 1,000 planes in its fleet.
Investors, afraid that A.I.G. would have to absorb further write-downs in its already damaged mortgage securities and collateralized debt obligations, have driven down the company’s shares in recent days. The stock closed Friday at $12.14 a share, a decline of 46 percent for the week.
Eric Dash, Louise Story and Michael de la Merced contributed reporting.
http://www.nytimes.com/2008/09/15/business/15lehman.html?_r=1&partner=rssuserland&emc=rss&pagewanted=all&oref=slogin
Hey guys. Hope our Texan Cats are ok this morning. Keep safe.
By the way, I will be on a new board
upon my return that is only NYSE if anyone is
interested....
http://investorshub.advfn.com/boards/board.aspx?board_id=13189
Moderated by JT Options and Mudturtle...nice big board folks.
Hey Cats,
I'll be back on more after Labor Day. Hope all is fancy
for you in this roller coater tide of solars (um, yeah- I sold another round of SOLF off a little early this past Friday)- DOH
but am eager to see it's run continue a bit (after more of a pull tomorrow, imho- friday selling...etc) thru Tuesday
night. Their earnings are due Wednesday- and the hype is
a great wave to ride. Watch the sympathy stocks move if SOLF
has decent numbers and beats the mark again this time around.
Point most important in earnings plays (IMHO)... if the company
not only BEATS but RAISES guidance (serfdom taught
me that when we were doing infinitistocks plays). Otherwise it's flat.
If they RAISE watch out for CSIQ, JASO, STP.
Talk to you again soon!!
Thanks for the invitation and welcome here, seems to fit my taste.
Back to my summer vacation here- and I'll be looking forward
to joining you more after Labor Day.
Thanks again!
Bridge
Yeah, my manicurist gets irritated too.
Well then, how many
fingers do you
seeeeeee?
whoa, you can see me?
Tiki, hey- probably one of the better summers in recent years.
It really gets a little easier as these kids get older.
Lots of beach time, park time, and summer-night-wine time for me. :) Working a bit in between on some various projects and
trading some earnings plays since spring.
Hope yours is as easy-as-a-summer-breeze as well! :)
Scovillez, did you forget what you wanted to say? haha
"Sorry to the board for getting off on this tangent"- no apologies - was an interesting read for those of us who can pop in now and again over the summer break. :)
Happy Summer,
Bridge
booooyyyya! looking good! 80+
I'm curious about the halt as well. Wonder if it's going to resume after the call or simply until premarket tomorrow.
Visa Inc.'s (V) fiscal third-quarter net income rose 41% on higher payment volumes and processed transactions as the credit-card transaction processing giant also reaffirmed its three-year outlook for annual revenue and earnings growth.
"Despite a challenging economic environment in the United States and a softening in traditional credit card spending, the strength of Visa's debit business drove solid growth in the region," Chief Executive Joe Saunders said, adding that double-digit increases in payments volume and transactions are "further proof of the resiliency of our network business model."
Shares were halted in after-hours trading after closing the regular session up 3.3% at $78.45.
For the quarter ended June 30 - its second as a public company - Visa reported net income of $422 million, or 51 cents a share, compared with $299 million, or $1.44 a share, a year earlier.
Excluding items, including litigation, restructuring and purchase amortization, the company posted earnings of 59 cents a share.
Revenue rose 18% to $1.61 billion on strong contributions from service fees, data processing fees and international transaction fees.
Analysts polled by Thomson Reuters, on average, expected 48 cents a share on revenue of $1.55 billion.
Payment volume, or spending on Visa cards, rose 19% to $652 billion, while transaction volume rose 22%. The company said the number of Visa-branded cards rose 14% worldwide to 1.6 billion.
The company reaffirmed its April goal of 11% to 15% annual revenue growth for the next three years and annual per-share earnings growth of 20% or greater. For 2009, the first year growth comparisons are available, analysts expect per-share earnings to grow 25% to $2.55 on revenue up 14% to $7 billion.
Within two months of its $19.65 billion initial public offering, the largest in U.S. history, Visa shares had more than doubled and remain about 78% above their IPO price. Part of the reason for its success is that the company makes money off processing transactions, rather than actual consumer spending.
While Visa and primary competitor MasterCard Inc. (MA) are often mistaken for credit-card issuers, they, in fact, specialize in processing credit-card payments for banks and have no exposure to credit-card loans. As more payments are processed electronically around the world, the businesses of both companies stand to grow significantly.
However, there could be obstacles ahead. The company faces a potential price war with MasterCard, which could lead to the defection of large clients, and future litigation expense. Visa deposited $3 billion of the money it raised in its IPO into an escrow account to cover settlements that result from a tangle of lawsuits related to interchange fees and to anticompetitive allegations by Discover Financial Services (DFS) and American Express Co. (AXP).
According to documents unsealed last month, Discover is seeking $6 billion in damages in a 2004 lawsuit against Visa and MasterCard over anti-competitive rules that Discover claims limited its growth by precluding member banks from issuing credit and debit cards over the Discover network.
-By Lauren Pollock, Dow Jones Newswires; 201-938-5964; lauren.pollock@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=RpBLwY2%2BwBMpPkHqa4Duuw%3D%3D. You can use this link on the day this article is published and the following day.
VISA 3Q Total Volume Up 22% To $1 Trillion >V
17 minutes ago - Dow Jones News
VISA Payment Volume Up 19% Over Prior Year To $652B>V
19 minutes ago - Dow Jones News
V 3Q Earnings Alert: Thomson Reuters 48c
19 minutes ago - Dow Jones News
VISA Raises Long-term Outlook For Adjusted Operating Margins>V
19 minutes ago - Dow Jones News
VISA Cl A 3Q Rev $1.61B >V
19 minutes ago - Dow Jones News
VISA Cl A 3Q Non-GAAP EPS 59c >V
20 minutes ago - Dow Jones News
Latest News Headlines for Visa Inc
Visa: Softening In Traditional Credit Card Spending >V
13 minutes ago - Dow Jones News
VISA Backs FY10 Rev Growth Of 11%-15% >V
13 minutes ago - Dow Jones News
VISA Backs FY10 Non-GAAP EPS Growth At Least 20% >V
13 minutes ago - Dow Jones News
VISA 3Q Processed Transactions Up 13% To 9.5B >V
16 minutes ago - Dow Jones News
VISA 3Q Oper Expenses Up 5% To $965M >V
16 minutes ago - Dow Jones News
VISA 3Q Total Payment Transactions Up 15% Over Prior Yr To 10.7B
17 minutes ago - Dow Jones News
VISA 3Q Total Cards Carrying Brands Rose 14% Worldwide To 1.6B Over Prior Yr>V
17 minutes ago - Dow Jones News
nevermind- ihubs fantastic admin helpers told me how to fix the error. :)
Ok, added them- but somehow there are spaces.
I think I need a tutorial on adjusting ibox info....grrrrr
Ihub/Stock trading acronyms- BK ( bankruptcy ) and LOI (letter of intent)
noteworthy: Either of the above usually imply (respectively) a decrease in share price is coming - and a reason to dump that pinky.
LOI's are "intent" and not anything worthy more than a rumor- imho- to pump a sp.
Hey Phil, could you please direct me to instructions on performing a screen shot? tia
All is awesome, thanks! (knock on wood)
....those were great! Thanks for the tea, see you
again next 4th :)
nice grub
Wow! How are the fireworks out there tonight??? What a town
to be in. If I had one place I could be for the 4th- It'd
be right where you are!
lol, sometimes. :) Happy 4th of July!!
Will do this eve :)
ADCT: ADC Reports Strong Operating Results for Second Fiscal Quarter 2008 And Raises 2008 Annual Guidance
Wednesday June 4, 4:01 pm ET
-- Net Sales of $403 Million Up 16% from 2Q07 and 19% from 1Q08
-- Gross Margin improved to 36.3% in 2Q08 from 34.5% in 2Q07, Excluding 2Q08 Purchase Accounting Adjustment
-- $0.14 GAAP EPS In 2Q08, Which Includes Certain Expenses Totaling $0.25 EPS
-- 2008 Annual Sales Guidance Raised to $1.520-$1.540 Billion, Up 15%-16% from 2007
-- Exceeds Performance Expectations Six Consecutive Quarters
http://biz.yahoo.com/bw/080604/20080604006145.html?.v=1
ADCT (Link back-chart) ADC Reports Strong Operating Results for Second Fiscal Quarter 2008 And Raises 2008 Annual Guidance
Wednesday June 4, 4:01 pm ET
-- Net Sales of $403 Million Up 16% from 2Q07 and 19% from 1Q08
-- Gross Margin improved to 36.3% in 2Q08 from 34.5% in 2Q07, Excluding 2Q08 Purchase Accounting Adjustment
-- $0.14 GAAP EPS In 2Q08, Which Includes Certain Expenses Totaling $0.25 EPS
-- 2008 Annual Sales Guidance Raised to $1.520-$1.540 Billion, Up 15%-16% from 2007
-- Exceeds Performance Expectations Six Consecutive Quarters
http://biz.yahoo.com/bw/080604/20080604006145.html?.v=1
This week: ADCT 15.74 (chart)- earnings due wed after bell. Recently upgraded
by our friends at JP Morgan, Jefferies & Co and Hold Deutsche Securities...
Does this qualify for outstanding earnings? I don't know nor care too much. However, with it's beat-the-numbers history...I know I'll be playing the (hopefully) swing into Wednesday- as will many other traders for a quick play....soooooooooo.
Enjoy the ride. Keep your finger on the button or set your stop loss if planning on holding until after the bell on Wed.
glty- *b
Welcome to the throne, Clarity !
GAPPER : ESL (earnings after bell today- let's see if I can get 2 in a row so I can wear it thru the weekend!! HAHAHAHA-)
I'll check back later! Thanks again for the head bling-bling!
ESL: $58.21 On 2/28/2008, ESL reported 1st quarter 2008 earnings of $0.76 per share. This result beat the +$0.60 consensus of the 8 analysts covering the company and beat last year's 1st quarter results by 55.1%. The next earnings announcement is expected on 05/29/2008.
A big thanks for the tiara! Weeeeeeeeeeee!