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dvcgirl
03-16-2008, 07:46 PM
JPMorgan just purchased Bear Stearns for **$2** a share. That stock opened around $60 on Friday, closed down about 50% to $30 or so and was purchased for 250 million dollars today. Absolutely incredible....

http://biz.yahoo.com/ap/080316/jpmorgan_bear_stearns.html

dvcgirl
03-16-2008, 07:56 PM
Just wanted to add that Bear was trading above $150 a share in May. I can't even begin to comprehend the amount of wealth completely wiped off the table in this deal.....

jeankeri
03-16-2008, 08:30 PM
Thanks for the link dvcgirl. When I see you've started a thread I know I'm going to learn something. This time, I kind of wish I didn't. :eek: What a mess- tomorrow's sure to be interesting...popcorn::

tinaluis
03-16-2008, 08:33 PM
Pretty scary stuff. :scared1: Tomorrow's going to be a roller coaster ride for sure. Hopefully, the Fed cutting by a quarter point will not be seen as an act of desperation and will help to stabilize things.

dvcgirl
03-16-2008, 08:43 PM
Well, all that I can say is don't panic. The markets are really hard to predict these day. It could be very ugly, or there could be a a feeling that the Fed will do *whatever* it takes to keep keep the markets functioning and not crashing. That could boost confidence and keep the markets from positively plunging.

There is a *lot* of cash on the sidelines looking for the bottom....if the market thinks that tomorrow may be that day, we could see a big swing to the upside. If only I had a crystal ball ;)

Personally, I just don't think that this is over. The Bear situation will scare an awful lot of wealthy people. Many will want to move more money into cash as many of their buddies lost a *fortune* if they owned Bear.

Even with the Fed and Treasury very involved, a chain reaction could get started that will be difficult to stop. We'll just have to wait and see.

I'm much more concerned about how far the government will go and the measures that they'll take to keep things under control. The impact on the dollar and inflation could be worse than the markets taking a significant dive. It's just too soon to know.....

DisneyMomJen
03-16-2008, 08:49 PM
I know people who work there. I am worried about them not only since there is a good chance that they will lose their jobs, but at least part of their 401k's have to be tied up in this companies stock which is pretty much worthless now. 30% of this stock is owned by the employees. I just can't imagine.

punkin
03-16-2008, 08:53 PM
Imagine...it really is as bad as all that, if not worse.

DisneyMomJen
03-16-2008, 08:57 PM
I agree

madge
03-16-2008, 09:01 PM
I wonder how this will all translate down to mortgage interest rates, bank account interest rates, etc.

Because I know that what I'm reading is important. I have to admit, I don't really understand the overall impact for my bank account, in Kentucky. It's a lot of information and I find myself overwhelmed when I try to understand what the articles say.

punkin
03-16-2008, 09:01 PM
Can you say "bank run" boys and girls?

dvcgirl
03-16-2008, 09:04 PM
Joe Lewis, the famous British currency trading billion quietly built a 7% stake in Bear as of Sept 2007. By Friday, he had lost 800 million dollars. Now he's lost much more.

As of Friday there was speculation that he was going to have to begin selling off other assets to meet margin calls he was getting.....now he'll get more margin calls.....as will many others like him, and so on, and so on.

And then there's speculation about the *other* investment banks and big banks that are also in trouble, and what *their* books must look like if Bear was valued at 3.5 billion on Friday and 256 million on Sunday.

This is how a crash begins....

Here's hoping that calmer heads prevail....

punkin
03-16-2008, 09:07 PM
I am still in shock. If I was against any sort of bailout before, I am not anymore. This country cannot run without credit.

dvcgirl
03-16-2008, 09:09 PM
I wonder how this will all translate down to mortgage interest rates, bank account interest rates, etc.

Because I know that what I'm reading is important. I have to admit, I don't really understand the overall impact for my bank account, in Kentucky. It's a lot of information and I find myself overwhelmed when I try to understand what the articles say.

There's so much fear out there right now, I think initially mortgage rates will hover where they are or go up, despite what the Fed does.

This is going to take awhile to settle down. We're witnessing what happens when too little money gets far too leveraged and chases risky yield. This is the Great Credit Unwind.

There is going to be big government intervention coming....and soon. Much more than what we've seen.

snowbunny
03-16-2008, 09:23 PM
Can you say "bank run" boys and girls?

yes indeed...and I see Helicopter Ben has decided to print some more money, cough - I mean - lower interest rates again.

snowbunny
03-16-2008, 09:23 PM
There is going to be big government intervention coming....and soon. Much more than what we've seen.

No doubt....privatize the profits, socialize the losses....stick it to the taxpayer

POOHDRMR
03-16-2008, 09:36 PM
My cousin works there-I am praying for him and his family to be able to get through this okay.They are in the middle of having a house built and I know this will be a hard time for them.

punkin
03-16-2008, 09:39 PM
Am I understanding it correctly? Is the Fed actually financing the JP Morgan buyout?

PolyHereWeCome
03-16-2008, 09:50 PM
I know people who work there. I am worried about them not only since there is a good chance that they will lose their jobs, but at least part of their 401k's have to be tied up in this companies stock which is pretty much worthless now. 30% of this stock is owned by the employees. I just can't imagine. This was my 1st thought. Enron left its employees 401k plans with very little. Seems the innocent workers get really hard hit.

dvcgirl
03-16-2008, 09:53 PM
Am I understanding it correctly? Is the Fed actually financing the JP Morgan buyout?

Yes, that is how I'm reading it. The Fed is playing backstop right now for Wall Street....let's hope they can hold things together this week. The question is, for how many other banks can they take on this role?

How far does the dollar fall this week?

Nikkei is down 515 now

Dow futures down 225.

Tomorrow is going to be a really, really interesting day.

punkin
03-16-2008, 09:56 PM
OK, it seems that Bear Stearns is one of the big players in the repo and derivatives markets and had the Fed not arranged this "buyout" the entire market was in danger of collapsing.

dvcgirl
03-16-2008, 10:02 PM
OK, it seems that Bear Stearns is one of the big players in the repo and derivatives markets and had the Fed not arranged this "buyout" the entire market was in danger of collapsing.

That's right. And things could still spiral down.

Another interesting note....Bear Stearns was founded in 1923 and survived the Great Depression.

Gonna be tough to find any way to put a positive spin on the events of today.

Disneycrazymom
03-16-2008, 10:06 PM
This is very serious. What action would be the most wise one for the "average" person? Do we wait it out? Would it be wise to pull some (I am in NO WAY suggesting all) money out of the bank for an emergency cash fund? Just thinking about it as we ran through our cash this weekend! That is a whole 'nother budget thread!

corndog
03-16-2008, 10:07 PM
All this because of the arrogant and short-sighted run-up of rates by the Fed.

At least they've begun to unravel some of the damage they've done. Though much of it will be irreparable. What a shame.

dvcgirl
03-16-2008, 10:20 PM
All this because of the arrogant and short-sighted run-up of rates by the Fed.

At least they've begun to unravel some of the damage they've done. Though much of it will be irreparable. What a shame.

No, it couldn't be that the Fed *lowered* the rate all the way down to 1.0% pumping the economy up with easy credit for all with practically zero regulation. No, that probably doesn't have anything to do with what's happening.

They'll probably go another full point on Tuesday. Can't wait til inflation gets into the double digits and then we can watch as they have emergency meetings to *raise* rates.

punkin
03-16-2008, 10:23 PM
They'll probably go another full point on Tuesday. Can't wait til inflation gets into the double digits and then we can watch as they have emergency meetings to *raise* rates.

Inflation is not the bogeyman right now. The Fed is trying to stave off the complete collapse of the US financial markets. They will do whatever they can to prop them up and inflation be damned.

corndog
03-16-2008, 10:28 PM
No, it couldn't be that the Fed *lowered* the rate all the way down to 1.0% pumping the economy up with easy credit for all with practically zero regulation. No, that probably doesn't have anything to do with what's happening.

They'll probably go another full point on Tuesday. Can't wait til inflation gets into the double digits and then we can watch as they have emergency meetings to *raise* rates.

Inflation ceased to be a concern when people quit keeping their money in mattresses or in a can buried out back.

punkin
03-16-2008, 10:30 PM
All this because of the arrogant and short-sighted run-up of rates by the Fed.

At least they've begun to unravel some of the damage they've done. Though much of it will be irreparable. What a shame.

Inflation ceased to be a concern when people quit keeping their money in mattresses or in a can buried out back.

:confused3 :sad2:

You have got to be kidding.

dvcgirl
03-16-2008, 10:30 PM
Inflation is not the bogeyman right now. The Fed is trying to stave off the complete collapse of the US financial markets. They will do whatever they can to prop them up and inflation be damned.

Oh, I know inflation is the *last* thing that the Fed and Treasury are worried about on this fine evening. They're worried about bank runs and markets crashing. However, the remedies that will be put forth will unleash some nasty side-effects for all of us down the road.

Make no mistake about it though....no sooner will they get rates down to the bitter bottom when they'll be forced to start raising them....not because the economy is overheating, but because inflation will be out of control.

callaghan0416
03-16-2008, 10:36 PM
Things are not good. The Fed did this to help stabalize the markets and we can see that they are not reacting well. Everyone is waiting for the other shoe to drop or the next bank run. Bear Sterns trading floor is not trading tomorrow.

So, who shorted Bear Sterns on Friday???????

callie

punkin
03-16-2008, 10:38 PM
Things are not good. The Fed did this to help stabalize the markets and we can see that they are not reacting well. Everyone is waiting for the other shoe to drop or the next bank run. Bear Sterns trading floor is not trading tomorrow.

So, who shorted Bear Sterns on Friday???????

callie

Where did you hear that they stopped trading?

callaghan0416
03-16-2008, 10:41 PM
From a trader at Bear, they just got the call.

callie

punkin
03-16-2008, 10:42 PM
Equities or bonds? Oh ****!!!

callaghan0416
03-16-2008, 10:56 PM
Don't have all the details, traders are very skittish... wonder why?



callie

newtodcl
03-16-2008, 11:00 PM
The facts?

Between the end of November 2006 and the end of March this year, former Bear Stearns boss -- and current executive committee chairman -- Greenberg sold 179,277 shares at an average price of about $161, raising a total of $28.8 million.

Today the value of those shares has collapsed by $7.7 million to just $21.1 million.

After deducting his stock option costs, Greenberg made $17.7 million in profits before tax. Had he waited till now to sell the shares, he would have made just $10 million.

Nice work if you can get it, as they say.

Greenberg was not alone. Between December last year and the end of March, the now-ousted co-president Warren Spector dumped 116,255 shares at an average price of $164, raising a total of $19.1 million.

The value of those shares today: just $13.7 million.

After option expenses, Spector made $16.4 million. That's $5.4 million more than he would have made if he had waited.

Last December chairman and CEO James Cayne cashed out 46,415 shares at around $165, raising $7.6 million

Value today? Two million dollars less.

And Samuel Molinaro, the chief financial officer who just got promoted to chief operating officer thanks to the company's financial crisis, saved himself more than $400,000 by selling shares last December for $1.5 million instead of waiting until now.

It is, perhaps, a shame that Bear Stearns' two disastrous hedge funds didn't prove as nimble and astute in their trading as the guys at the top. Instead, they were caught holding junk mortgage paper as default rates soared.

Stock sales weren't the only way top executives at Bear Stearns pocketed a fortune even as they sailed the Titanic straight at the iceberg. Company filings reveal that Bear Stearns also awarded a staggering $140 million in bonuses to top executives last year.

And by good fortune, just over half of those bonuses were paid in cash rather than in the company's fast-shrinking shares. :mad:

crusoe2
03-16-2008, 11:08 PM
I'm not at all knowledgable about the stock market so I'm hoping that one of you could fill me in. What is the significance of Bear Stearns not being traded tomorrow? Sorry if that's a really dumb question but I gathered from punkin's reaction that it is really bad news. I am also wondering the same thing as the previous poster who asked what all of us average folks should do to protect ourselves right now. We don't have any investments except DH's 401k. He just changed jobs and, since it only has (or had?:confused3 ) about $8000 in it, we were going to cash it out and use the money to pay off a credit card that is eating us up in interest. Btw, thanks to those of you who post about and explain this stuff. I've learned quite a bit by reading your posts.

Frankiesmom
03-16-2008, 11:27 PM
All of this makes me so nervous; it makes me want to pull all our $ out of the bank! I hope that the market can hold on; as we do have some money- not alot- but enough that all of this will definetly have me watching tv pretty much all day tomorrow.

Disneycrazymom
03-16-2008, 11:30 PM
Anyone know why the news isn't talking about this?

neatokimmo
03-16-2008, 11:35 PM
Hmmm, will be interesting to see how much this crashes other stocks. I unfortunately have a margin account right now that I am going to pay off with a HELOC so I won't be paying as much interest. Since the HELOC is a 15 year one, I guess I don't need to worry about the bulk of my retirement account until 2023 http://ruinsmiley.tripod.com/Themesmileys_files/pukeface.gif

aloha_lilo
03-16-2008, 11:36 PM
Anyone know why the news isn't talking about this?

It looks like the major cable news outlets are running repeats...either there isn't anyone at the news stations to run the story (I kinda get the impression that they operate on a skeleton crew at night to save money due to the repeats) or they are waiting till tomorrow to make an even bigger production of it.

I am so scared right now...:scared: :scared: :scared:

Frankiesmom
03-16-2008, 11:39 PM
Good luck tomorrow everyone! I fear we're going to need it. And I really think I'll be removing all our $ from the bank- I'm just going to leave enough to cover my written checks and I'm going to take the rest.

neatokimmo
03-16-2008, 11:47 PM
I don't understand why you'd pull your $$ out of your checking account? I am not the sort to freak out, but maybe I am not not taking all seriously enough.

I see it crashing the market, the feds cutting int again to raise it back a little, then 3-5 years for things to recover to the numbers before Citi crashed the market. What do you all think?

Free4Life11
03-16-2008, 11:47 PM
Actually I saw some expert on Friday or Saturday saying these investment banks have very little correlation with banks we use for our everyday checking and savings.

I don't plan to pull any money out...what good will that do? I can't pay my bills with cash and I've got so little as it is LOL!

Frankiesmom
03-16-2008, 11:54 PM
I can pay my bills with cash if I have too- the post office sells money orders.?I just think I would feel better that I am only going to leave enough in there to cover my checks; the rest will be in my safe. Sure will make me sleep alot better.

MoniqueU
03-17-2008, 12:00 AM
Anyone know why the news isn't talking about this?

I have been watching the news all day and they are mostly talking about Obamas preacher dude and the Spitzer mess, even though I think this is a bigger story I guess it isn't scandalous enough.

I have learned more off this thread about the subject then I have heard on the news all day.

Grand Canyon
03-17-2008, 02:08 AM
Any guess what Oil and gold are going to do tomorrow?:confused3
I see the value of the dollar falling fast. The fed has run up $265b budget deficit in the last 5 months. Where is the money to bail out Wall Street going to come from?
I have been reading the new all weekend and it has seemed surreal. I was thinking that I did not understand what was going on. Thank you all for restoring my sense of sanity. The DIS Boards is so much more to me that a place to talk about Disney. Do you think anyone at WDW management realizes how much all this might effect visitation?
We are closely watching gas prices here, and holding our breath that the visitors keep coming. So far we have good numbers. I know I am talking of parochial interest when many of you have bigger issues on the horizon. My hart goes out to you.:grouphug: Good luck to you all.

cats mom
03-17-2008, 02:22 AM
I'm really surprised at the lack of attention this is receiving too.

I just watched our local late night news and while they briefly mentioned the sale, they failed to note the 30 billion dollar insurance policy the fed is providing to prop up the deal.
:scared1:

They glossed right over the story to get to what they must consider more important news... freeway closures and sports scores.
:confused3

abdullahkurdi
03-17-2008, 02:57 AM
Pretty scary stuff.:cool1:

AndyLL
03-17-2008, 03:46 AM
All this because of the arrogant and short-sighted run-up of rates by the Fed.

At least they've begun to unravel some of the damage they've done. Though much of it will be irreparable. What a shame.

You are joking are you not?

Or are you the one that 'claimed' cutting tax rates increases revenue?

The Feds need to quit using the prime rate to solve the economy... they've keep it suppressed way to much the last few years.

Chase credit card holders... expect your rates to go up again.

ANdy

runagun
03-17-2008, 04:25 AM
Gross negligence by our Government to spend our money for a private company. Give our money to people that are already rich. Why don't we bail out all those people that are forclosing on there houses? I will never understand for republicans that are suppose to be so "You make your bed that you lay in". For them to be stepping in and helping in this. Let the freaking thing fail, It would be a warning to all the other banks that rip people off.

I'm really surprised at the lack of attention this is receiving too.

I just watched our local late night news and while they briefly mentioned the sale, they failed to note the 30 billion dollar insurance policy the fed is providing to prop up the deal.
:scared1:

They glossed right over the story to get to what they must consider more important news... freeway closures and sports scores.
:confused3

happygirl
03-17-2008, 06:43 AM
I don't understand why people are taking there money out of banks, aren't most accounts insured for atleast 10,000 by the FDIC??

by the way JP Morgan is going they think the stock market is going to crash and crash hard

punkin
03-17-2008, 06:46 AM
This has NOTHING to do with depository institutions. The FDIC insures deposits up to $100K at least. DO NOT PANIC!!!

dvcgirl
03-17-2008, 07:23 AM
Well, the futures are surely down this morning, but not as bad as last night. Nobody crashed overnight in Asia, but they were down about 5%.

Lehman is down significantly in futures. Let's see if there's a run there.....

DisneyMomJen
03-17-2008, 07:27 AM
Where did you hear that they stopped trading?

Bear

kbkids
03-17-2008, 07:38 AM
I do not understand this stuff at all, but just curious what to do with DH's 401K. It's in one of those funds that the broker runs for you - you just pick, high risk, medium risk, low risk. You can also invest in company stock, bonds, etc. Right now, we've got 20% in company stock, and the rest in medium risk. Any opinions on what we should be doing with it? There's enough there that this makes me nervous.

corndog
03-17-2008, 07:41 AM
You are joking are you not?

I am 100% serious. While agree the Fed should not be involved in setting the price for money, period, their justification for the rate run up was absurd. It was basically -- "there's too much prosperity. we have to stop it."

Or are you the one that 'claimed' cutting tax rates increases revenue?

I happy to continue that discussion on the taxes thread. http://www.disboards.com/showthread.php?p=23804940#post23804940&highlight=

All I'll say here further on the subject is that you posted numbers that said revenue increase, adjusted for inflation, 2.5% after the tax cuts, then 10.6% the following year, with a 7.9% the year after that.

That's not a "claim." That, my friend, is data.

punkin
03-17-2008, 07:44 AM
Bear stopped trading because NO other company had any faith to trade with them. All trading stopped on their end.

Bear needed to be taken over by a strong bank this weekend before the Asian markets opened last night. If they were not taken over, there was great fear of what would happen with the markets, worse than whatever is going on now.

No. A Previous Poster said that the Bear trading floor was shut down completely. That is something different. I understand the reasons Bear went under, but it seems from the PP's post that traders were told not to come in this morning. I had not heard that and was trying to find out details.

callaghan0416
03-17-2008, 08:01 AM
No. A Previous Poster said that the Bear trading floor was shut down completely. That is something different. I understand the reasons Bear went under, but it seems from the PP's post that traders were told not to come in this morning. I had not heard that and was trying to find out details.

YAAH that was me, sorry. You know the street and rumors and I bit hook, line and sinker, just as bad as them. Phone was crazy last night. Again, sorry abot that.

callie

Frankiesmom
03-17-2008, 08:12 AM
So are they trading today? And yes, I know we're insured thru the FDIC. And maybe you're right- don't panic? But, my grandpa lived thru the depression and he said 1 day they all had money and the next day- none! So, for the sake of argument- the worst happens- and we have no cash- how long till we get a "check" from the FDIC? I won't take all my $ from the bank; but I'll take a decent amount- just in case. We all have kids to feed; and waiting for a check from the FDIC- no thanks- better to be prepared!

Lucky4me
03-17-2008, 08:17 AM
I you have less than 100 grand in your bank account, DONT WORRY ABOUT IT. It's FDIC insured. They'll print some more money if they run out. :lol:

To whoever was thinking about taking out their 8,000 401k to pay a credit card? DON'T! Leave it where it is, forget about it and find another way to pay off the card. It sounds like you are young and have a long time before retirement. It's not much money, you can withstand this bump in the road.
This is what we would do, take it for what it's worth. I am not a financial expert by any stretch.

Lucky4me
03-17-2008, 08:31 AM
So are they trading today? And yes, I know we're insured thru the FDIC. And maybe you're right- don't panic? But, my grandpa lived thru the depression and he said 1 day they all had money and the next day- none! So, for the sake of argument- the worst happens- and we have no cash- how long till we get a "check" from the FDIC? I won't take all my $ from the bank; but I'll take a decent amount- just in case. We all have kids to feed; and waiting for a check from the FDIC- no thanks- better to be prepared!

There is nothing wrong with having a little safety net money hidden somewhere. We have some in a fire proof safe. It's been there for 13 years and will hopefully be there another 20 until we move. A safety deposit box at the bank is a good idea if you're uncomfortable having cash in your home. DH and I were raised with the thought to never put all our eggs in one basket. It's just good common sense.

NY Disney fan
03-17-2008, 08:45 AM
Latest from the NY Times:

March 17, 2008

Shares Slide on Fed Move and Bear Deal
By KEITH BRADSHER and MARTIN FACKLER

European and Asian stocks fell Monday in response to renewed worries about the financial strength of the world’s banking system after the bargain-basement sale of Bear Stearns to JPMorgan Chase.

Stock markets across Europe fell 2 to 3 percent soon after opening on Monday, following drops on major Asian stock markets of 3 to 5 percent. Tokyo’s benchmark index hit a three-year low before it rebounded slightly; Chinese and Indian stock markets tumbled even more sharply.

In the United States, stock futures plunged overnight, indicating that the markets would open to heavy losses. Futures in the Dow Jones industrial average were down more than 200 points.

The euro rose again against the dollar and investors rushed to the relative safety of United States Treasuries. The dollar fell to a 13-year low against the yen, and oil hit a new record, near $112 in Asia.

The Bank of England moved to help bolster the liquidity of the financial markets and bring down interbank lending rates by offering $10 billion in three-day loans.

Investors across Europe and Asia tried to figure out who might invest more capital to shore up Western financial institutions caught with heavy losses on their holdings of mortgage-backed securities. Chinese state-run institutions, with some of the largest cash holdings, appeared to be on the sidelines, watching as the prices of financial shares plunged, while Citic announced that it would not proceed with a previously announced deal to acquire a $2 billion stake in Bear Stearns.

Tokyo’s benchmark Nikkei 225 index lost 3.7 percent to close at 11,787.51 points, after declining as much as 5 percent during the day.

By midday in Europe, the CAC 40 in France dropped 2.5 percent while the FTSE 100 index in Britain had fallen 2.2 percent. The Dow Jones Euro Stoxx 50 fell 3.0 percent, led down by the German DAX, down 3.3 percent.

The declines in Tokyo came even as the Japanese central bank, the Bank of Japan, moved to shore up financial markets by injecting $4.1 billion into short-term money markets. Asian stocks have also been hurt by the weakness of the dollar, which erodes the value in local currencies of overseas profits and forces big exporters like Toyota and Sony to raise prices in foreign markets.

Stock markets in Asia’s two emerging giants, China and India, suffered the biggest losses on Monday. The Shanghai A share market was down 3.6 percent in late trading, the Hang Seng Index in Hong Kong was down 5.2 percent and the Shenzhen A share market was down 6.4 percent. Investors in the China region were troubled not only by the ongoing financial troubles in the United States but also by a weekend of news reports of unrest in Tibet and adjacent Chinese provinces.

“Local investor sentiment is not good — the Hong Kong market is really caught in the middle between happenings in China and the United States,” said Ricky Chan, a stockbroker at Phoenix Capital Securities Ltd. in Hong Kong. With the Shanghai market declining, he said, “plus with the turmoil in Tibet, the local market is quite nervous at this point in time.”

In the United States on Sunday the Federal Reserve made a sweeping move, lowering its rate for borrowing by one-quarter of a percentage point, to 3.25 percent, as well as aiding the purchase of Bear Stearns by JPMorgan Chase for $2 per share. The acquisition underscored the severity of the credit crisis in the United States and the weakness of the American economy.

Yet pockets of optimism remained among investors and stockbrokers that the broader health of Asian economies, especially China’s, would allow the region to escape some of the worst effects of the economic slowdown in the United States — although few now expect the region to emerge unscathed.

“I expect a big rebound in the next two weeks because the market has been oversold, driven by market sentiment — the fundamentals in the Hong Kong stock market are still O.K.,” said Peter Lai, a stockbroker at DBS Vickers in Hong Kong.

In India, the Sensex 30 index in Bombay plunged 5.1 percent by early afternoon. The index had climbed 47 percent last year on an often speculative boom fueled to a considerable extent by foreign investment.

But India also imports nearly all of its oil, and now faces rising costs with crude oil close to $110 a barrel; this has contributed to a weakening of industrial production, up just 5.3 percent in January from the same month a year ago, and rising wholesale prices, up 5.11 percent for the week ending March 1.

Officials for the China Investment Corporation, China’s $200 billion sovereign wealth fund for domestic and overseas stock purchases, declined to comment on whether American financial companies had any appeal in the current credit market difficulties. Analysts were skeptical that the Chinese would step in while markets remain in turmoil.

“I would think the Chinese will be very careful,” said Hong Liang, a Goldman Sachs economist who specializes in China.

Investments by China’s sovereign wealth fund, the China Investment Corporation, and by Chinese state-owned entities have had a dismal track record so far in the financial sector.

The China Investment Corporation’s maiden investment as it was being organized last spring was a $3 billion nonvoting stake in the initial public offering of the Blackstone Group, the American private equity company. Acquired for only a 4.5 percent discount to the initial offering price of $31, or $29.605, the investment has already lost nearly half its value as the stock has plunged, closing at $15.78 on Friday.

The Blackstone investment has been an embarrassment for the Chinese government because its price was widely reported at the time of the deal — in contrast with bond purchases by China’s central bank for the country’s foreign-exchange reserves, which are managed with the strictest secrecy.

DisneyMomJen
03-17-2008, 09:21 AM
No. A Previous Poster said that the Bear trading floor was shut down completely. That is something different. I understand the reasons Bear went under, but it seems from the PP's post that traders were told not to come in this morning. I had not heard that and was trying to find out details.

Ok

dvcgirl
03-17-2008, 09:38 AM
Well, President W. just said that the capital markets are functioning. So, I guess we can all stop worrying now......LOL!

breezy1077
03-17-2008, 09:40 AM
I keep saying call your congressmen and put a stop to the mortgage witchhunt! This isn't the first and it won't be the last. There's been such a hit to the mortgage industry that everyone now needs to sit back and let the dust settle. Instead they keep kicking the industry when it's down and the ripple effect is going to hurt everone. Everyone! The housing market affects so many other financial sectors. So, again...

Call your congressmen!!!!!!!!!!!!

Toby'sFriend
03-17-2008, 09:50 AM
there is no reason to run to your local bank and withdraw all your money.

Of course keep a small amount of cash at your house for emergencies. But the money in your bank will be there, if they all run out the Federal Government will just print up a bunch more.

The biggest risk to your cash is inflation -- as in it would start costing you $100+ to fill up your car with gasoline and the price of bread will go up over $5 a loaf. If that happens and I am by no means saying I think it will, your dollar will be just as worthless whether you are keeping it at home or in the bank.

As for the current happenings, I think everybody is just sitting around wondering right now how deep all the other Investment banks are immersed in this mess.

shelly3girls
03-17-2008, 10:18 AM
Gross negligence by our Government to spend our money for a private company. Give our money to people that are already rich. Why don't we bail out all those people that are forclosing on there houses? I will never understand for republicans that are suppose to be so "You make your bed that you lay in". For them to be stepping in and helping in this. Let the freaking thing fail, It would be a warning to all the other banks that rip people off.

This is not the government giving money to the rich. They are backing positions put on by Bear Sterns that are necessary to prevent an even bigger disaster in US fixed income markets. If someone did not step in to do this there would be major consequences all through the US economy.

mickeyfan2
03-17-2008, 03:54 PM
Bear Stern was not only heavily involved in the sub prime mortgages but they were also heavily involved in the dutch auctions too. The dutch auction problem materialize a few weeks ago.

breezy1077
03-17-2008, 04:07 PM
I am 100% serious. While agree the Fed should not be involved in setting the price for money, period, their justification for the rate run up was absurd. It was basically -- "there's too much prosperity. we have to stop it."



I happy to continue that discussion on the taxes thread. http://www.disboards.com/showthread.php?p=23804940#post23804940&highlight=

All I'll say here further on the subject is that you posted numbers that said revenue increase, adjusted for inflation, 2.5% after the tax cuts, then 10.6% the following year, with a 7.9% the year after that.

That's not a "claim." That, my friend, is data.

Go corndog!!!!:thumbsup2

breezy1077
03-17-2008, 04:20 PM
If we could turn back time...

-The Gov't would have kept their noses out of the mortgage industry

- Rates would have naturally increased driving out the morons who had no right working in our industry to begin with

-property values would have peaked then began to gradually decline then level out

-forclosure rates would be better than they are right now and better than they're going to be (as I've said before - even at what everyone deemed high -roughly 3% means that 97% of loans were performing fine - an A+ in my book)

-we would not be dealing with the financial mess we're dealing with now

Lesson learned? The gov't should not legislate what they know nothing about (trust me most of them don't understand the mortgage industry at all but they think they can save it?:eek: )

JuneChickie
03-17-2008, 09:18 PM
I thought maybe with all this the past couple of weeks , that the interest rates on homes would have come down , but instead they have stayed the
same , and today they went up a half point more.

Huh

corndog
03-18-2008, 07:06 AM
I see they're talking about a full one point rate cut today! That would be tremendous!

In 48 hours we go from the sky is falling to the sky's the limit!

punkin
03-18-2008, 07:27 AM
Guess what, no matter what rate cuts the Fed makes, it will NOT help housing. The mortgage interest rate is now completely disconnected from the funds rate and that's even assuming you can find a lender willing to underwrite anything more risky than a traditions, 20% down mortgage with at least 3 months mortgage payments in the bank.

Bear was bailed out because they were a major market player in the repo market and if they went down, they would have taken the rest of that market with them. The housing/mortgage market is a completely different animal.

madge
03-18-2008, 07:35 AM
Guess what, no matter what rate cuts the Fed makes, it will NOT help housing. The mortgage interest rate is now completely disconnected from the funds rate and that's even assuming you can find a lender willing to underwrite anything more risky than a traditions, 20% down mortgage with at least 3 months mortgage payments in the bank.

Bear was bailed out because they were a major market player in the repo market and if they went down, they would have taken the rest of that market with them. The housing/mortgage market is a completely different animal.

housing is tied to the bond market, right?

maybe not the bond market, but a bond market?

:::hoping I've learned SOMETHING in this mess:::

punkin
03-18-2008, 07:37 AM
housing is tied to the bond market, right?

maybe not the bond market, but a bond market?

:::hoping I've learned SOMETHING in this mess:::

Yes. 30 year mortgages are priced off the 10 yr. bond. The Fed cannot control the 10 year. They can only affect the short end.

WendyZ
03-18-2008, 08:02 AM
OK...some questions from a VERY novice investor.
So Bear Sterns was a "BIG" player in the game...what exactly is sub prime mortgages and dutch auctions? They failed b/c both sub prime mortgages and dutch auctions went south at the same time, so to speak??? They were just to big to let go under b/c that would send a shock wave of panic to everyone else....is that correct? Or is some of their down fall due to the top guys selling out and running so to speak (again)....it always seems the guys at the top never seem to fall when the company does.
Now...tell me where I am right and wrong. I find the finance industry very interesting wish I would of went to college for it when I was younger, although it might be a good thing I don't fully understand this.;) just kidding!

breezy1077
03-18-2008, 10:07 AM
The fed rate cuts or hikes are on short-term not long term, but they do affect mortgage rates eventually. I can't stand when people call in after a fed rate cut and ask if their interest rate on their pending loan went down. More often than not, the feds rate cut actually sends investor bank rates up not down.

corndog
03-18-2008, 10:40 AM
The fed rate cuts or hikes are on short-term not long term, but they do affect mortgage rates eventually. I can't stand when people call in after a fed rate cut and ask if their interest rate on their pending loan went down. More often than not, the feds rate cut actually sends investor bank rates up not down.

I was able to get my 5.0%, 20-year fixed the day after the recent 3/4 point cut. They bottomed out that morning.

breezy1077
03-18-2008, 01:31 PM
I was able to get my 5.0%, 20-year fixed the day after the recent 3/4 point cut. They bottomed out that morning.

Awesome! :thumbsup2 Just a trend not a rule, sounds like you got a deal. trust me, if I could predict rates - I'd be a rich woman!:)

corndog
03-18-2008, 03:03 PM
Awesome! :thumbsup2 Just a trend not a rule, sounds like you got a deal. trust me, if I could predict rates - I'd be a rich woman!:)

PM me when you can beat that! We can do business.

Well, we didn't get the full one point cut, but the 3/4 point cut is progress. I must admit it's a little humorous to read some of the posts on here from Sunday about how the JPM/BSS deal meant the end of the free world, and then to compare that with today's market, less than 48 hours later.