Serious problems true and the possibility of worse to come but those bank failures you refer to occurred during an era where it was conventional wisdom to think that intervention wasn't necessary. Since then that's no longer the case and large financial crises have regularly seen government intervention if you look at such crises from a worldwide perspective. If banks can be saved, one will see the government trying to do so. That's why the government is coming in as the lender and buyer of last resort and is expected to print money to alleviate the liquidity problem. Projections are for worse to come and all the bad news hasn't been factored in yet. That said I don't know why you would say it feels worse than previous times. The 70s for example were pretty bad with gas shortages and high interest rates. The bust in Japan was large but it led to an anemic state not a complete collapse. I worry that the problem is being blown out of proportion. There is truth in FDR's words that there is nothing to fear but fear itself. The way this crisis is being covered was at first too apathetic but now maybe a little too dramatic. The big name bankruptcies and sharp stock market falls have given a serious jolt. But concern shouldn't turn into hysteria going by recent financial crisis examples. One problem is that leadership from Washington is lacking. No one believes Bush. His political capital has been spent and that is a contributing problem since psychology plays an important role in these kinds of situations.
The reason why I say it seems worse is because of the events that have unfolded. Here is a list of events: 1. Lehman folds - Lehman has lasted through many events in US history to include bear markets, multiple recessions, world wars, etc. 2. AIG in severe crisis - AIG was a large company and component of the DOW. 3. Several well known mid-large sized banks fold or in crisis such as IndyMay, Washington Mutual, Wachovia, etc. - These banks have been around for a great period of time and are well known. 4. FNM/FRE in crisis- Large government sponsored companies that have been around for some time in crisis mode. 5. Other non-financial companies in crisis mode with fear of bankruptcy and trading at life-time lows such as General Motors and Ford 6. Bear Stearns folds - Large well known investment bank that had lasted for many decades 7. Personal observations - Large well known car dealerships iny my area that had lasted for decades have closed their doors. Many small businesses that had been around for decades also closing their doors. Many people I know are out of work for the first time in their lives. Foreclosure signs popping up on houses in my area. 8. Unemployment numbers- Highest unemployment since 2002-2003 and appearing to grow higher. 9. Market Volatility- Highest recorded volatility ever. 10. State unemployment agencies state that they may go insolvent. etc etc etc I could go on and on with a fairly detailed list of events that either did not take place or did not take place to this magnitude during past recessions. I can conclude with a fair degree of certainty that we are in a deep long lasting recession or a depression and the numbers the government is providing are not demonstrating such. Im not saying there is a conspiracy, but my observations of the events are not coinciding with the government's numbers. Everyone is expecting a bounce to occur and government officials come out each day reassuring us that nothing is wrong. However, this is replaying out just like the last depression almost in lock-step. During the last depression, the Empire State Building was being constructed too. This time it will be the Freedom Tower...
How to capitalise the banks and save finance By George Soros http://www.ft.com/cms/s/0/55b32b9e-9888-11dd-ace3-000077b07658.htm I thought I woulds post this here as Soros mentions the need to immediately capitalize MS.
It would be a bloodbath," said one JP Morgan executive. Bloom is off the NY Rose. The only thing the government can do is to try and create a few highly capitalized banks. Guess I'll have to dust off my "Stone Soup" recipe.
MS is history. Mitsu deal is off. Jap and us markets way down. Original 9B for 21% = 90% at present market cap. Mitsu will not pay $25 per share - hari kari Owning greater than 25% under federal laws is controlling interest of MS. Renegotiating any deal would provide MS max $2B when they have already spent the 9B originally promised. No one will step in without the full faith of the US government covering all risks. When your spinning plates your going to have a few that break.
Well, I bought some MS Fri just before trading stopped (7:45ish). We shall see. Edit: To above poster. I don't know what you're watching, but markets are up sharply at 7:22PM EDT.
One of my favorite ways to prepare. We all get our chance. Just be sure it's a small portion: http://www.crowbusters.com/recipes.htm Aubrey McClendon will finish up the leftovers.