European, Asian markets bounce back this morning

A woman walks past a display showing stock index in Hong Kong Monday, Oct. 13, 2008. Hong Kong's key index surged more than 9.7 percent as Asian markets rebounded after last week's dramatic sell-off. The Hang Seng Index was up 1515.29 points, or 9.7 percent, at 16312.16. Associated Press © 2008

Cartoon Commentary: US Stock Market

The World's Response: Credit Crunch

After the worst day ever for the Irish stock exchange, on Tuesday, Ireland guaranteed all the debt and deposits of all domestic banks for two years, citing "a serious disturbance in the economy caused by the recent turmoil in the international financial markets."

Also on Tuesday India's central bank took the rarely comforting step of declaring that one of the nation's largest banks ICICI, had sufficient "liquidity to cover liabilities to its depositors." Meanwhile, the governments of Iceland, Norway and Sweden all jumped in to bail out local banks.

Also this week: A Chinese insurance company reeled from losses on its stake in Fortis, a bank bailed out by the Belgian, Dutch and Luxembourg governments on Monday. On Tuesday, the Belgian government also came to the rescue of another big European bank, Dexia.

On Monday trading on Brazil's stock market had to be halted after stock prices plunged following the rejection of the bailout plan by the U.S. House of Representatives. On Tuesday, the Russian stock market also halted trading for two hours, and the government announced $50 billion worth of loans to Russian banks and corporations to help pay off foreign debts.

— Full Salon.com article

Country First GOP?

Thanks, Barney Frank! — GIVE 'EM HELL!


Whine, Whine, Whine.. that is all those Republicans do. Either lead, follow or get out of the way! Obama is coming your way!

Asia stocks fall after US failure

Japan's benchmark Nikkei stock index has fallen almost 5% in early trading, hours after a US financial rescue plan failed to gain Congressional backing.

The US House of Representatives on Monday rejected a $700bn (£380bn) plan aimed at bailing out Wall Street.

The Dow Jones index fell 7% and suffered its biggest ever one-day points fall, ending 778 down.

President George W Bush is to make a statement on the deadlock over the bail-out plan early on Tuesday morning.

A White House spokesman said that the president was "very disappointed" by the vote's result.

Congress will not meet again until Thursday, with another vote unlikely before the weekend, the BBC's Jonathan Beale in Washington says.

— Full BBC Story

PR: Wachovia Announces Bank Subsidiary Divestitures to Citigroup

From the Wachovia Website:

September 29, 2008
Wachovia Corporation to become a focused leader in retail brokerage and asset management.

CHARLOTTE, NC—Wachovia today announced intentions to sell its retail bank, corporate and investment bank and wealth management businesses to Citigroup. Wachovia Corporation will remain a public company with two main operating subsidiaries: Wachovia Securities, the nation's third largest brokerage firm, and Evergreen Asset Management, a leading provider of asset management services.

"During recent weeks, the financial landscape has changed significantly and presented us with unprecedented challenges," said Robert K. Steel, CEO and President of Wachovia. "Today's announcement is the best alternative for the company, enabling a resolution on the Golden West portfolio."

Under terms of the transaction, Citigroup will pay $2.1 billion to Wachovia and assume the senior and subordinated debt of Wachovia Corporation.

The transaction is expected to close before year-end. It has been approved by directors of both companies and is subject to shareholder approval of Wachovia and the appropriate regulatory approvals.

Customers of both companies should continue banking as usual, and feel confident that their deposits are secure. Also, employees and vendors should continue to operate business as usual.

At this time, there are no changes to Wachovia's board of directors and two Wachovia directors will join Citigroup's board.

Wachovia Corp. will remain headquartered in Charlotte, NC. Wachovia Securities will continue to be headquartered in St. Louis, MO. Citigroup will headquarter the retail bank in Charlotte and the investment bank in New York.

Wachovia's investment bankers were Goldman Sachs, Perella Weinberg Partners and Wachovia Securities, and its legal advisors are Sullivan & Cromwell and Simpson Thacher & Bartlett.

---

About Wachovia
Wachovia Corporation (NYSE:WB) is one of the nation's largest diversified financial services companies, with assets of $812.4 billion and market capitalization of $33.5 billion at June 30, 2008. Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers through 3,300 retail financial centers in 21 states from Connecticut to Florida and west to Texas and California, and nationwide retail brokerage, mortgage lending and auto finance businesses. Globally, clients are served in selected corporate and institutional sectors and through more than 40 international offices. Our retail brokerage operations under the Wachovia Securities brand name manage more than $1.1 trillion in client assets through 14,600 financial advisors in 1,500 offices nationwide. Online banking is available at wachovia.com; online brokerage products and services at wachoviasec.com; and investment products and services at evergreeninvestments.com.

Wachovia Update

Citigroup is near a deal for Wachovia, a move that would concentrate power within the nation’s banking industry in the hands of a few giant lenders, The New York Times’s Eric Dash and Andrew Ross Sorkin reported Monday morning.

Citigroup executives are meeting to complete the deal Monday morning, these people said, cautioning that the talks could unravel. Wells Fargo, which had also been in talks with Wachovia, could also revive its bid.

Although the Federal Reserve and Treasury Department were pushing for a sale, the government was resisting pressure to provide financial guarantees to the buyer, which both Citigroup and Wells Fargo had sought.

A sale to Citigroup would further concentrate Americans’ bank deposits in the hands of just three banks: Bank of America, JPMorgan Chase and Citigroup would control more than 30 percent of the industry’s deposits.

— NYTimes Story

From Secretary Paulson

My bank is in trouble!

Wachovia Corp. is in trouble. It purchased a bank that had questionable lending practices in 2006 and is now paying the price.

At least two major banks were reportedly in talks Sunday to buy Wachovia Corp., the latest U.S. bank to be the focus of investor anxiety over mounting losses tied to toxic assets.

The New York Times reported on its Web site that Citigroup Inc. and Wells Fargo & Co. are bidding in a possible emergency takeover of Charlotte, N.C.-based Wachovia.

The Wall Street Journal also listed Spain's Banco Santander SA as a possible bidder.

Wachovia spokeswoman Christy Phillips-Brown declined to comment on the reports, as did Citigroup spokeswoman Christina Pretto. Wells Fargo spokesmen could not be immediately reached for comment.

Wachovia's shares fell 27 percent in regular-session trading on Friday, and shed another 15 percent in after-hours dealings to end the week at $8.50, as investor worries heightened.

Wachovia's current problems stem largely from its acquisition of mortgage lender Golden West Financial Corp. in 2006 for roughly $25 billion at the height of the nation's housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West's specialty, which let borrowers skip some payments

But like many other banks, Wachovia stands to benefit from the passage of the government's proposed $700 billion rescue plan — the details of which were emerging from Washington on Sunday.

This summer, Wachovia reported a $9.11 billion loss for the second quarter, announced plans to cut 11,350 jobs — mostly in its mortgage business — and slashed its dividend. Wachovia also boosted its provision for loan losses to $5.57 billion during the second quarter, up from $179 million in the year-ago period.

Earlier this month, Wachovia said it is on track to reduce securities and outstanding loans on its balance sheet by $20 billion this year, which will free up $1.5 billion in capital.

Additionally, Wachovia still expects to reduce expenses by $2 billion by the end of 2009.

However, the second-half expense benefit will be more than offset by $525 million to $650 million in severance and benefit costs related to previously announced job cuts, Wachovia said.

— AP Story via Yahoo! Business news

A really large number?

Bailout in chaos, feds seize WaMu

WASHINGTON (Reuters) - A rescue for the U.S. financial system unraveled on Thursday amid accusations Republican presidential candidate John McCain scuppered the deal, and Washington Mutual was closed by U.S. authorities and its assets sold in America's biggest ever bank failure.

As negotiations over an unprecedented $700 billion bailout to restore credit markets degenerated into chaos, the largest U.S. savings and loan bank was taken over by authorities and its deposits auctioned off. U.S. stock futures fell by more than 1 percent.

The third-largest U.S. bank JPMorgan Chase & Co said it bought the deposits of Washington Mutual Inc, which has seen its stock price virtually wiped out because of massive amounts of bad mortgages. The government said there would be no impact on WaMu's depositors and customers. JPMorgan said it would be business as usual on Friday morning.

Had a bailout deal been reached in Congress, it may have helped the savings and loan, founded in Seattle in 1889. Efforts to find a suitor to buy WaMu faltered in recent days over concerns about whether the government would reach a deal to buy its toxic mortgages.

— Full Story

South Florida Home Crunch

As home values decrease in South Florida, the following story appears in The Miami Herald

A campaign is under way to provide badly needed money to people cheated by rogue mortgage brokers.

The Florida Association of Mortgage Brokers and AARP are pushing for the revival of a special fund that was quietly killed by regulators a decade ago, saying it could help thousands of people who have lost their homes and savings.

''We should never have gotten rid of it,'' said Ritch Workman, president of the FAMB. "We are going to fight to bring it back.''

Workman and AARP spokesman Dave Bruns said their groups will press to reinstate the Mortgage Brokerage Guaranty Fund, which paid up to $20,000 to individual victims before it was shut down in the 1990s.

Though recent federal legislation requires states to provide some protection, there's no requirement to create a victims fund.

The effort to resurrect the program comes as Florida leaders prepare for sweeping changes in state law that governs the mortgage industry, including tougher restrictions on people who apply for broker licenses and stiffer penalties for those who commit fraud and other crimes.

Just last week, a state Cabinet report blasted the state's oversight of the mortgage industry, saying Florida regulators allowed hundreds of people with criminal histories to peddle loans, failed to alert police agencies to rogue mortgage operations, and ignored citizen complaints.

With Florida steeped in the nation's highest level of mortgage fraud, several lawmakers overseeing the home loan industry said they'll support legislation that brings the kinds of protection now being pushed by the two statewide groups.

— Full Story

Japanese May Buy Part Of Lehmans

Japanese bank Nomura is in talks to take over Lehman Brothers' European operations.

The move centres on the investment and private equities arms of the collapsed US investment bank.

It comes as Nomura said it had reached a deal to buy the company's Asian operations.

Meanwhile, Barclays has completed its purchase of the US arm of Lehman Brothers.

— Full Story

Will the bailout work?

With Congress set to adjourn next week for the election season, time is short to work out the details of the plan and get it passed.

Congressional leaders, including many key Democrats, had already been considering such a rescue plan, and they indicated quick acceptance of the proposals.

On the sidelines, however, there is deep scepticism on both left and right - with conservative Republicans objecting to any more bail-outs, and many Democrats asking why we should help Wall Street rather than the four million people whose homes are being foreclosed, or repocessed.

And the presidential candidates, who are being left on the sidelines in the negotiations, are also reluctant participants in the process.

Both realise that a sizeable bail-out that commits the Federal government to significant new spending will severely limit their plans - either to cut taxes or to introduce a new health care plan - in the year after the election.

One model being talked about is the Reconstruction Finance Corporation introduced in the 1930s during the Depression. But it should be remembered that in 1933, President-elect Franklin Roosevelt refused to agree a bi-partisan deal with President Hoover to stave off the collapse of the entire US banking system, which shut down completely on the eve of his inauguration.

— Full BBC Story

You Tube and Black Monday

I haven't heard anyone call it "Black Monday" ... YET, however, I checked my stock portfolio and see sound investments slowly sinking, but nothing has gone down the drain. Texas is still looking for FEMA who keeps saying that it is only a couple of hours away and news this morning of school systems paying parents to come to the school to talk about their children's education while paying the students to do well on their tests have me VERY concerned. All this and more bombarding the air waves creates a very sad day here in the Good old U S of A.

So, I'm taking a YouTube break while all this bad news sinks in and letting you in on the ride.

Next of this rollercoaster ride: One of my favorite segments of that political comedy show on HBO, Real Time with Bill Maher. The New Rules segment at the end of every show not only makes me laugh, but makes me think. This YouTube video is no exception. It may be from last season, but it still rings true today, so I'm putting it here.

So, until later today, or more than likely early tomorrow, when I post again ... remember to just keep smiling; people will wonder what you are up to.

New Rules: THE MOVIE Part I

As Oil Prices Dip ...

OPEC has told its members to strictly limit their production to agreed quotas as Brent crude dipped below $100 a barrel for the first time since April.

After talks in Vienna, Opec president Chakib Khelil said the measures to curb over-production amounted to a cut of 520,000 barrels a day within 40 days.

— Full Story

We've got to find other ways to power our lives. This controlled yo-yo by OPEC is not in our interest.