AI
Friday, September 12, 2008 1:01:22 PM
Financial Meltdown
First came the near-collapse of Bear Stearns. Then, Fannie Mae and Freddie Mac caved in.
In both cases, the government came to the rescue.
Now, another venerable Wall Street investment banking firm, Lehman Brothers, is on the edge, and the nation's biggest savings and loan, Washington Mutual, is under pressure.
http://www.chicagotribune.com/business/yourmoney/chi-fri-gail-0912-sep12,0,6906786.column
With the Freddie and Fannie situations, the government simply moved in and "showed they would bankrupt preferred and common shareholders," Bianco said. "Would you buy common or preferred shares if you knew this?"
That's why Bianco thinks a wide array of financial companies won't be able to raise capital on their own, and why conditions of many companies will "sink further" in the weeks ahead.
Short on Fire #msg-30822769
First came the near-collapse of Bear Stearns. Then, Fannie Mae and Freddie Mac caved in.
In both cases, the government came to the rescue.
Now, another venerable Wall Street investment banking firm, Lehman Brothers, is on the edge, and the nation's biggest savings and loan, Washington Mutual, is under pressure.
http://www.chicagotribune.com/business/yourmoney/chi-fri-gail-0912-sep12,0,6906786.column
With the Freddie and Fannie situations, the government simply moved in and "showed they would bankrupt preferred and common shareholders," Bianco said. "Would you buy common or preferred shares if you knew this?"
That's why Bianco thinks a wide array of financial companies won't be able to raise capital on their own, and why conditions of many companies will "sink further" in the weeks ahead.
Short on Fire #msg-30822769 
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