End of Wall Street: Goldman and Morgan to be normal banks

[BSD]

The end of Wall Street as it was previously known.

A bit back we had 5 independent investment banks there, now none remain.

Dealbreaker - A Wall Street Tabloid - Business News Headlines and Financial Gossip - Goldman And Morgan To Be Banks

 

[Bladerunner]

And this is what Goldman had to say.

"Apparently the current state of the market merely pushed them in a direction they were already going"




Andy

 

[BSD]

Indeed.

That had me laughing too.

What's that with anyone who has at least half a brain that's still functioning, umm, halfway decently, being able to explain anything at all afterwards, or put any spin on anything after the fact.

LOL!

 

[Bladerunner]

From marketwatch writer

U.S. stock futures slip as asset plan debated

"What Treasury hasn't said is the price that will be paid, noted Paul Mortimer-Lee, an analyst at BNP Paribas. If Treasury pays market prices, there's no particular incentive for banks to sell to it; and if the government pays above-market value, then it's a taxpayer subsidy of dodgy assets, he noted.
Other questions remain over whether banks that sell those assets will be subject to stricter rules or be forced to find more capital, or whether there will be any sharing of gains or losses."


"Democrats are pushing for additional aid to homeowners and restrictions on executive pay."

They still get paid


Andy

 

[Bladerunner]

last one

"Treasury says it is planning to buy up to $700 billion of assets"



Asset

From Wikipedia, the free encyclopedia
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This article is about the business definition. For other uses, see Asset (disambiguation).
In business and accounting, assets are everything owned by a person or company (all tangible and intangible property) that can be converted into cash [1]. Since this includes intangible valuables such as stocks and accounts and notes receivable, whose cash value is not clear until they are sold, assets can also be defined as a probable future economic benefit obtained or controlled by a person or company as a result of a past transaction or event.




Latter

Andy

 

[JTrader]

I've been to Wall Street I have. I remember it being lined with expensive tailors shops. I tried a pair of Nikes on in one of them. Don't recall seeing any NYSE building though. But i didn't know owt about it then!!

 

[BSD]

;-)

"History repeating

THE PAST:

"The saga of American wealth creation, both for the nation and for its enterprising capitalists, reached its apotheosis during the Gilded Age, a period roughly delimited by the end of Civil War and the beginning of World War I. The Gilded Age ended sometimes in the first third of the 20th century, Some cite the 15th of April 1912, the night when the ocean liner Titanic sank. Others mention World War I or the stock market crash of October 24, 1929. All these events certainly had an impact on the factors which put an end to the Age of Moguls in America. The Titanic disaster taught mankind that there were still limits to where it could go. World War I started a process in which the power of the federal government was increased against the power of the tycoons, a process which would be furthered by the depression which followed the stock market crash of 1929. But what really put an end to the Gilded Age or the age of the moguls, was the introduction of income and estate taxes during the Wilson administration. Corporate and income taxes rendered wealth accumulation slower and more difficult, whereas the estate taxes prevented the perpetuation of wealth in the hands of the founding families."

THE PRESENT:

" How Did We Get Here This Time? That's pretty easy to answer, too. His name is Phil Gramm. A few days after the Supreme Court made George W. Bush president in 2000, Gramm stuck something called the Commodity Futures Modernization Act into the budget bill. Nobody knew that the Texas senator was slipping America a 262 page poison pill. The Gramm Guts America Act was designed to keep regulators from controlling new financial tools described as credit "swaps." These are instruments like sub-prime mortgages bundled up and sold as securities. Under the Gramm law, neither the SEC nor the Commodities Futures Trading Commission (CFTC) were able to examine financial institutions like hedge funds or investment banks to guarantee they had the assets necessary to cover losses they were guaranteeing. This isn't small beer we are talking about here. The market for these fancy financial instruments they don't expect us little people to understand is estimated at $60 trillion annually, which amounts to almost four times the entire US stock market.

And Senator Phil Gramm wanted it completely unregulated. So did Alan Greenspan, who supported the legislation and is now running around to the talk shows jabbering about the horror of it all. Before the highly paid lobbyists were done slinging their gold card guts about the halls of congress, every one from hedge funds to banks were playing with fire for fun and profit."

THE FUTURE:

"In fact, it really does look as if the foundations of US Capitalism have shattered.

"Nothing will be like it was before," said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. "The world as we know it is going down."

Many are drawing comparisons with the Great Depression, the national trauma that has been the benchmark for everything since. "I think it has the chance to be the worst period of time since 1929," financing legend Donald Trump told CNN. And the Wall Street Journal seconds that opinion, giving one story the title: "Worst Crisis Since '30s, With No End Yet in Sight."

The only thing that is certain is that the era of the unbridled free-market economy in the US has passed -- at least for now. The near nationalization of AIG, America's largest insurance company, with an $85 billion cash infusion -- a bill footed by taxpayers -- was a staggering move. The sum is three times as high as the guarantee provided by the Federal Reserve when Bear Stearns was sold to JPMorgan Chase in March.

The most breathtaking aspect about this week's crisis, though, is that the life raft -- which Washington had only previously used to bail out the mortgage giants Fannie Mae and Freddie Mac -- is being handed out by a government whose party usually fights against any form of government intervention. The policy is anchored in its party platform.

"I fear the government has passed the point of no return," financial historian Ron Chernow told the New York Times. "We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams."

VIOLETPLANET: History Repeating: America In The Gilded Age: Past, Present & The Commodity Futures Act...

===================================

BBC
2003

Buffett warns on investment 'time bomb'

Derivatives are financial weapons of mass destruction
Warren Buffett
The rapidly growing trade in derivatives poses a "mega-catastrophic risk" for the economy and most shares are still "too expensive", legendary investor Warren Buffett has warned.

The world's second-richest man made the comments in his famous and plain-spoken "annual letter to shareholders", excerpts of which have been published by Fortune magazine.

The derivatives market has exploded in recent years, with investment banks selling billions of dollars worth of these investments to clients as a way to off-load or manage market risk.

But Mr Buffett argues that such highly complex financial instruments are time bombs and "financial weapons of mass destruction" that could harm not only their buyers and sellers, but the whole economic system.

Continued:
BBC NEWS | Business | Buffett warns on investment 'time bomb'