McCain Flips on AIG Bailout

Would the real John McCain please stand up? At the beginning of this week he was against any bailouts for any companies on Wall Street and by mid week he is all for it. Prior to this week he wanted less regulation on Wall Street and now he is for over regulating Wall Street. Somebody please point out who the real John McCain is for me? ABC News has this great report that is up on You Tube for you to judge for yourself…

Video Link



I’m not sure but it looks to me like somebody erased the red R at the end of John McCain’s name and penciled in a blue D? On most city busses it says to “Watch Your Step” as you exit the bus, over at the McCain Straight Talk Express bus it must say “Tuck and Roll” because this bus has no scheduled principal stops.

After watching several broadcasts on financial news about the current crisis it is evident that the nations financial institutions are in a serious free fall. This is not the end of the financial crisis either according to most analysts but it is getting close to the end. Next stop WaMU! I'm thinking that the Anti Regulation Maverick of yesterday has some responsibility for this mess but you will never hear that out of his mouth. Tuck and roll…

Papamoka

The Next Great Depression?

Not since the days of the late 1920’s and early 1930’s has this nation seen such large financial institutions collapse as we are seeing currently on Wall Street. Lehman Brothers after 158 years in business is folding up its business table and calling it quits. This is not a good sign of a prosperous economy my friends. Is this the tell tale sign of the next Great Depression or just a bump in the road for the American economy?

Over at the New York Times and Deal Book they have this to say on the matter…

Lehman Expected to File for Bankruptcy Protection
September 14, 2008, 5:55 pm

According to people briefed on the matter, Lehman Brothers will file for bankruptcy protection on Sunday night, in the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago. (Should be 18 Months Ago)

Lehman will seek to place its parent company, Lehman Brothers Holdings, into bankruptcy protection, while its subsidiaries will remain solvent while the firm liquidates its holdings, 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.

But Lehman’s filing is unlikely to resemble those of other companies that seek bankruptcy protection. Because of the harsher treatment that federal bankruptcy law applies to financial-services firm, Lehman cannot hope to reorganize and survive as a going concern. It will instead liquidate its holdings.

It was not clear whether the government would appoint a trustee to supervise Lehman’s liquidation, or how big the financial backstop would be. - Deal Book/ NY Times

For some odd reason I can’t fathom why John McCain says that the fundamental economy is in great shape and sound? When you have huge financial companies like Lehman Brothers and Merrill Lynch out right going under, do you think it might be a tell tale sign of an economy in trouble? Maybe John McCain doesn’t read the newspapers or watch television from one of his seven to eleven houses? Bank of America may have saved Merrill Lynch in a last minute deal for $44 Billion but Lehman Brothers is a been there and shouldn't have done that legacy for the history books.

Even the Federal Reserve Board is taking unusual steps to fend off the worries in the markets. This is unheard of news.

Papamoka

Big Bank Buyout

There is a probable solution to our nations banking crisis that started out with all of those bad loans that then turned into millions of foreclosures. Keep in mind you have to think like a wheeler and dealer like billionaire’ Donald Trump or Warren Buffet to make this proposition work.

If Bear Sterns could be bought for $2 per share then I think it’s possible for this blogger to enter the high finance games of Wall Street. First off you have to read this piece over at Reuters…

Goldman, Lehman outlooks cut to "negative" by S&P
By Jonathan Stempel

NEW YORK (Reuters) - Goldman Sachs Group Inc's and Lehman Brothers Holdings Inc's credit rating outlooks were cut on Friday by Standard & Poor's, which said volatile markets could result in lower profit and revenue.

S&P revised its outlook to "negative" from "stable" on Goldman's "AA-minus" and Lehman's "A-plus" long-term credit ratings, suggesting a possible downgrade in one to two years.

(Snip)

Banks have suffered from lower earnings and share prices as the housing crisis, a slowing economy and worries about credit quality led investors to stop buying a wide range of riskier securities. This has cut into revenue from trading, arranging debt offerings, and advising on mergers.

Several banks have also been cutting jobs, and Bear Stearns Cos agreed last Sunday to a $2-per-share buyout by JPMorgan Chase & Co after a cash crisis.

S&P still has a negative outlook on Merrill Lynch & Co's "A-plus" credit rating, and expects to decide within 30 days whether to downgrade Morgan Stanley's "AA-minus" rating. The credit rating agency said net revenue in the industry may decline 20 percent to 30 percent this year. - Reuters

Keep in mind that my plan to buyout one of the nations largest investment banks will involve a little principal I like to call the meek shall inherit the earth. In this case I’m talking about all of us that have been victims to bad loans, poor decisions and foreclosure on our homes. Believe it or not we all hang out at the local diner sipping coffee and blaming Wall Street for our lot in life. For the sake of argument lets assume that there are ten million of us. It’s a big diner!

All we need to buyout Goldman Sach’s and Lehmans is fifty-one percent of the shares so right off the bat we have a 49% discount. All of the members of our little club have to contribute to the plan for this to work so here goes. Below is my top secret plan for us to finance our plan. Remember this is top secret so don’t tell anyone.

We’ve all gotten those flyers in the mail that you get $25 if you open a new savings account, we each open an account and pool the results. Then we look for all the banks offering free toasters and we open an account and sell the ill gotten toasters on Ebay for $50 each. (Really nice top of the line toasters with the assumption that there will be a bidding war for all ten million of them.) Again pooling all of the money. Seeing that we are all going to be high finance bankers we are going to need reliable transportation to get to Wall Street. We each buy a new car and pool the $1000 cash rebate. Before we give the dealer our old clunker of a car we each find $10 in spare change in it. We need a Green side to this buy out so everyone has to collect $100 worth of bottle and can deposits from the side of the road. Since we are going to be dealing with stocks and bonds we are all going to need new computers so we each buy a top of the line computer with a $400 rebate on the computer and a $100 rebate on all of the software.

This is the really creative part of the financing… We each sign up for that beta testing for tracking emails that Microsoft is undertaking. That should pay each of us $2000 and Bill Gates will thank each and everyone of us for helping him out. Next up, we each email back all of those crooked bankers in Africa that have $30,000,000.00 sitting in dead men’s checking accounts.

If my math is correct it looks like out little group of dead beat losers has to much money now. That’s a nice problem to have. It looks like we can take Goldman Sach’s and Lehman private at $4 per share. Oh, I almost forgot, we each have a $1 off coupon! With the change we have left over it looks like we can buy Canada and rent it back to them.

The Donald will be so proud of us…

Papamoka

Feel free to link to or borrow this post…

Cross posted at MichaelLinnJones.com

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