Damien wrote:I knew that with a little extra effort he cold pull iy off. Congratulations George W. Bush!!!
Gallup:
BUSH NOW LEAST POPULAR PRESIDENT SINCE POLLING BEGAN
With the new Gallup poll, George W. Bush has passed Nixon and Truman, and become the least popular President of all-time. According to the Roper Center, here is the worst net approval / disapproval result for every President in the Gallup poll since it began public polling in the late 1930's:
President Approval Disapproval Margin
Bush 25 70 -45
Bush has both the highest overall disapproval, and the lowest overall net approval / disapproval in any Gallup poll taken, ever. Keep in mind that this is a poll that has been functioning for more than 71 years. Also, it should be noted that it is possible that President Taft, who only received 23% of the vote in his 1912 re-election campaign, was more unpopular than Bush, but there weren't public polls back then.
The whole thing makes you long after a parliamentary system of government. That we have been forced to put up with Bush despite his low disapproval for so long strikes me as a flaw in our electoral system.
Changing the rules in this country to allow for a "recall" on the national scale would open a big can of worms. It would completely disrupt the system in an unrecoverable way. What works in the UK doesn't necessarily work here. You have to remember that it would work both ways. Remember, it was Republicans who led the crusade to make it law to limit the Presidency to two terms. They were wrong, but we're stuck with that amendment. So not only do you not get three terms of Ronald Reagan, but you also don't get three terms of Bill Clinton. Similarly, if we were able to force out anyone who isn't popular, we could have chaos.
Polls being the basis for removal from office would be too arbitrary. A President can be unpopular for many reasons in a period of time. It may not even have anything to do with his job. This is because polls elicit emotional response more than a logical one. Also, a poll can take into account a segment of the population or lean towards one type of person more than another. I'm not saying that President Bush isn't unpopular with a majority, but I am saying that the measurment isn't an exact science. He could be at 25% today and be at 40% tomorrow if something dramatic changed the public mood.
Now maybe I'm wrong about this, but I thought I read somewhere that Truman had a 22% approval rating at one point late in his second term. No matter. He has since been heralded as a great leader, respected by both parties as an historic figure of note. I cannot help but feel that making a final judgment even before Bush has left office, and even for some time after he leaves, is based purely on emotional and not logical reasoning.
"Because here’s the thing about life: There’s no accounting for what fate will deal you. Some days when you need a hand. There are other days when we’re called to lend a hand." -- President Joe Biden, 01/20/2021
US to take stake in banks, first since Depression
By JEANNINE AVERSA, AP Economics Writer
WASHINGTON - The government will buy an ownership stake in a broad array of American banks for the first time since the Great Depression, Treasury Secretary Henry Paulson said late Friday, announcing the historic step after stock markets jolted still lower around the world despite all efforts to slow the selling stampede.
Separately, the U.S. and the globe's other industrial powers pledged to take "decisive action and use all available tools" to prevent a worldwide economic catastrophe.
"This is a period like none of us has ever seen before," declared Paulson at a rare Friday night news conference. He said the government program to purchase stock in private U.S. financial firms will be open to a broad array of institutions, including banks, in an effort to help them raise desperately needed money.
The administration received the authority to take such direct action in the $700 billion economic rescue bill that Congress passed and President Bush signed last week.
Earlier Friday, stock prices hurtled downward in the United States, Europe and Asia, even as President Bush tried to reassure Americans and the world that the U.S. and other governments were aggressively addressing what has become a near panic.
A sign of how bad things have gotten: A drop of 128 points in the Dow Jones industrials was greeted with sighs of relief after the index had plummeted much further on previous days. The week ended as the Dow's worst ever, with the index down an incredible 40.3 percent since its record close almost exactly one year earlier, on Oct. 9. 2007.
Investors suffered a paper loss of $2.4 trillion for the week, as measured by the Dow Jones Wilshire 5000 index, and for the past year the losses have totaled $8.4 trillion.
It was even worse overseas on Friday. Britain's FTSE index ended below the 4,000 level for the first time in five years; Germany's DAX fell 7 percent and France's CAC-40 finished down 7.7 percent. Japan's benchmark Nikkei 225 index fell 9.6 percent, also hitting a five-year low. For the week, the Nikkei lost nearly a quarter of its value. Russia's market never even opened.
Paulson announced the administration's new effort to prop up banks at the conclusion of discussions among finance officials of the Group of Seven major industrialized countries. That group endorsed the outlines of a sweeping program to combat the worst global credit crisis in decades.
Earlier this week, Britain had moved to pour cash into its troubled banks in exchange for stakes in them — a partial nationalization.
Paulson said the U.S. program would be designed to complement banks' own efforts to raise fresh capital from private sources. The government's stock purchases will be of nonvoting shares so it will not have power to run the companies.
Last month, when the U.S. Treasury Department allowed Lehman Brothers to fail, I wrote that Henry Paulson, the Treasury secretary, was playing financial Russian roulette. Sure enough, there was a bullet in that chamber: Lehman’s failure caused the world financial crisis, already severe, to get much, much worse.
The consequences of Lehman’s fall were apparent within days, yet key policy players have largely wasted the past four weeks. Now they’ve reached a moment of truth: They’d better do something soon — in fact, they’d better announce a coordinated rescue plan this weekend — or the world economy may well experience its worst slump since the Great Depression.
Let’s talk about where we are right now.
The current crisis started with a burst housing bubble, which led to widespread mortgage defaults, and hence to large losses at many financial institutions. That initial shock was compounded by secondary effects, as lack of capital forced banks to pull back, leading to further declines in the prices of assets, leading to more losses, and so on — a vicious circle of “deleveraging.” Pervasive loss of trust in banks, including on the part of other banks, reinforced the vicious circle.
The downward spiral accelerated post-Lehman. Money markets, already troubled, effectively shut down — one line currently making the rounds is that the only things anyone wants to buy right now are Treasury bills and bottled water.
The response to this downward spiral on the part of the world’s two great monetary powers — the United States, on one side, and the 15 nations that use the euro, on the other — has been woefully inadequate.
Europe, lacking a common government, has literally been unable to get its act together; each country has been making up its own policy, with little coordination, and proposals for a unified response have gone nowhere.
The United States should have been in a much stronger position. And when Mr. Paulson announced his plan for a huge bailout, there was a temporary surge of optimism. But it soon became clear that the plan suffered from a fatal lack of intellectual clarity. Mr. Paulson proposed buying $700 billion worth of “troubled assets” — toxic mortgage-related securities — from banks, but he was never able to explain why this would resolve the crisis.
What he should have proposed instead, many economists agree, was direct injection of capital into financial firms: The U.S. government would provide financial institutions with the capital they need to do business, thereby halting the downward spiral, in return for partial ownership. When Congress modified the Paulson plan, it introduced provisions that made such a capital injection possible, but not mandatory. And until two days ago, Mr. Paulson remained resolutely opposed to doing the right thing.
But on Wednesday the British government, showing the kind of clear thinking that has been all too scarce on this side of the pond, announced a plan to provide banks with £50 billion in new capital — the equivalent, relative to the size of the economy, of a $500 billion program here — together with extensive guarantees for financial transactions between banks. And U.S. Treasury officials now say that they plan to do something similar, using the authority they didn’t want but Congress gave them anyway.
The question now is whether these moves are too little, too late. I don’t think so, but it will be very alarming if this weekend rolls by without a credible announcement of a new financial rescue plan, involving not just the United States but all the major players.
Why do we need international cooperation? Because we have a globalized financial system in which a crisis that began with a bubble in Florida condos and California McMansions has caused monetary catastrophe in Iceland. We’re all in this together, and need a shared solution.
Why this weekend? Because there happen to be two big meetings taking place in Washington: a meeting of top financial officials from the major advanced nations on Friday, then the annual International Monetary Fund/World Bank meeting Saturday and Sunday. If these meetings end without at least an agreement in principle on a global rescue plan — if everyone goes home with nothing more than vague assertions that they intend to stay on top of the situation — a golden opportunity will have been missed, and the downward spiral could easily get even worse.
What should be done? The United States and Europe should just say “Yes, prime minister.” The British plan isn’t perfect, but there’s widespread agreement among economists that it offers by far the best available template for a broader rescue effort.
And the time to act is now. You may think that things can’t get any worse — but they can, and if nothing is done in the next few days, they will.
I knew that with a little extra effort he cold pull iy off. Congratulations George W. Bush!!!
Gallup:
BUSH NOW LEAST POPULAR PRESIDENT SINCE POLLING BEGAN
With the new Gallup poll, George W. Bush has passed Nixon and Truman, and become the least popular President of all-time. According to the Roper Center, here is the worst net approval / disapproval result for every President in the Gallup poll since it began public polling in the late 1930's:
President Approval Disapproval Margin
Bush 25 70 -45
Bush has both the highest overall disapproval, and the lowest overall net approval / disapproval in any Gallup poll taken, ever. Keep in mind that this is a poll that has been functioning for more than 71 years. Also, it should be noted that it is possible that President Taft, who only received 23% of the vote in his 1912 re-election campaign, was more unpopular than Bush, but there weren't public polls back then.
The whole thing makes you long after a parliamentary system of government. That we have been forced to put up with Bush despite his low disapproval for so long strikes me as a flaw in our electoral system.
Edited By Damien on 1223424169
"Y'know, that's one of the things I like about Mitt Romney. He's been consistent since he changed his mind." -- Christine O'Donnell
Since the funds have yet to be released and the plan actually implemented, I would hesitate to start painting the bill as a failure just yet. No one was trilled with the idea to begin with, but a large majority of Democrats and a good number of Republicans voted for it because they didn't want to leave the problem alone. The President only signed the thing yesterday, so let's have a little patience and see what happens over the next few weeks.
"Because here’s the thing about life: There’s no accounting for what fate will deal you. Some days when you need a hand. There are other days when we’re called to lend a hand." -- President Joe Biden, 01/20/2021
NEW YORK - Wall Street plunged again Wednesday, with anxieties about the financial system still running high even after the government bailed out the insurer American International Group Inc. The Dow Jones industrial average dropped more than 340 points.
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The Federal Reserve is giving a two-year, $85 billion loan to AIG in exchange for a nearly 80 percent stake in the insurer, after it lost billions in the risky business of insuring against bond defaults. Wall Street had feared that the conglomerate, which has its tentacles in various financial services industries around the world, would follow the investment bank Lehman Brothers Holdings Inc. into bankruptcy.
"We dodged a bullet, but we want to make sure it's a complete ceasefire," said Jack A. Ablin, chief investment officer at Harris Private Bank, noting that AIG still needs to unwind its investment positions, sell off assets, and possibly get more cash.
Furthermore, the two independent Wall Street investment banks left standing — Goldman Sachs Group Inc. and Morgan Stanley — remain under scrutiny, as does Washington Mutual Inc., the country's largest thrift bank. Morgan Stanley revealed its quarterly earnings early late Tuesday, posting a better-than-expected 7 percent slide in fiscal third-quarter profit. It insisted that it is surviving the credit crisis that has ravaged many of its peers.
Lehman filed for bankruptcy protection on Monday, and by late Tuesday had sold its North American investment banking and trading operations to Barclays, Britain's third-largest bank, for the bargain price of $250 million. Over the weekend, Merrill Lynch, the world's largest brokerage, sold itself in a last-ditch effort to avoid failure to Bank of America Corp.
The ongoing troubles in the financial sector could exacerbate the problems facing the weak U.S. economy, given that individuals and businesses rely on the nation's money centers to borrow from.
The Commerce Department reported Wednesday that new home construction fell by 6.2 percent in August to 895,000 units, the slowest building pace since January 1991. Slumping demand for houses, sinking home prices and mortgage defaults have been the catalysts behind Wall Street's turmoil — and the risky mortgage-backed assets held by the nation's banks are not apt to regain in value until the housing market turns around.
A day after Wall Street regained some of Monday's nosedive, the Dow fell 346.69, or 3.13 percent, to 10,712.33. The blue-chip index is down more than 5 percent on the week, and has fallen more than 23 percent since reaching a record close of 14,164.53 on Oct. 9 last year.
Broader stock indicators also fell. The Standard & Poor's 500 index dropped 45.94, or 3.79 percent, to 1,167.66, while the Nasdaq composite index fell 82.37, or 3.73 percent, to 2,121.53.
Wesley Lovell
"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." - Benjamin Franklin
Another major announcement. Goldman Sachs might be next.
Goldman posts worst quarter since going public
By JOE BEL BRUNO, AP Business Writer 2 hours, 59 minutes ago
NEW YORK - Goldman Sachs Group Inc., the larger of the nation's two remaining major independent investment banks, on Tuesday reported its worst slump in profits since going public in 1999.
The world's largest investment bank reported third-quarter profit plunged 71 percent from the year-ago period, an almost unthinkable drop for a firm widely described as the smartest on Wall Street. Goldman's results reflect continuing damage from the ongoing credit crisis that has already vanquished three of its rivals.
Goldman and Morgan Stanley remain the only major independent investment banks on Wall Street after a major shake-up of the investment banking industry. Lehman Brothers Holdings Inc. filed for bankruptcy Monday after succumbing to distressed real estate holdings, while Bear Stearns Cos. and Merrill Lynch & Co. were swallowed by commercial banks in emergency sales.
After two years of record profits, Chairman and Chief Executive Lloyd Blankfein has been the only CEO to navigate his firm through the market dislocation without posting a loss or major write-downs. He said "this was a challenging quarter" marred by a "decrease in client activity and declining asset valuations."
That was reflected in the numbers. The New York-based investment bank posted a profit of $810 million, or $1.81 per share, after paying preferred dividends compared to $2.81 billion, or $6.13 per share, a year earlier. Revenue for the three months ended Aug. 29 skidded 51 percent to $6.04 billion from $12.3 billion a year ago.
The results still beat Wall Street projections for $1.71 per share, according to analysts polled by Thomson Reuters. Revenue fell short of the $6.23 billion expected by analysts.
The financial market turmoil is certainly one of the low points in Goldman's 139-year history. Though it has avoided the kind of bruising results turned in by many of its rivals, Goldman's shares are still down almost 50 percent from its 52-week high of $250.70.
On Tuesday, the stock tumbled $7.60, or 5.6 percent, to $127.90 in morning trading after sinking to a new 52-week low of $116 earlier in the session.
Goldman's performance from some of its renowned businesses reflected the market's dislocation since the credit crisis began one year ago. Investment banking revenue tumbled 40 percent, and trading and investments notched 67 percent lower.
The fall of Bear Stearns last March when it was sold to JPMorgan Chase & Co. helped Goldman's results during the third quarter. Goldman's prime brokerage, which trades securities for major institutional clients, reported a 20 percent surge in revenue. That helped lift Goldman's asset management and securities services unit's revenue higher by 4 percent from the year-ago period.
With Merrill Lynch & Co. agreeing to be acquired by Bank of America Corp., more pressure has come on Goldman to make a similar deal. Many analysts believe stand-alone investment banks can balance volatile businesses like investment banking or trading with the relative stability of deposits held by retail banks.
Chief Financial Officer David Viniar rejected that Goldman needs to combine with another bank to survive. He said there remains opportunity in the market, especially buying up distressed debt that has driven its rivals out of business.
He said the company is reducing risky positions, and expects Goldman's profit growth will rise or fall in tandem with the global economy. Further, it will also benefit from a financial landscape missing some longtime competitors.
"We're not happy about what happened," Viniar said during a conference call with reporters. "We feel for the people in these institutions. They were very good firms that made the same mistakes we did. They made bigger ones and got caught up in a terrible market."
However, he added that "while we have a lot of compassion, when there's less competition it is better for us. That sends more business our way, gives us pricing power, and we're seeing a little of that now."
Wesley Lovell
"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." - Benjamin Franklin
Wall Street awakes to 2 storied firms falling
Monday September 15, 7:01 am ET
By Joe Bel Bruno, Christopher S. Rugaber and Martin Crutsinger, AP Business Writers
2 storied Wall Street firms fall as US financial markets roiled by further shock waves
NEW YORK (AP) -- When Wall Street woke up Monday morning, two more of its storied firms had fallen.
Lehman Brothers, burdened by $60 billion in soured real-estate holdings, filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court after attempts to rescue the 158-year-old firm failed. Bank of America Corp. said it is snapping up Merrill Lynch & Co. Inc. in a $50 billion all-stock transaction.
The demise of the independent Wall Street institutions came as shock waves from the 14-month-old credit crisis roiled the U.S. financial system six months after the collapse of Bear Stearns.
The world's largest insurance company, American International Group Inc., also was forced into a restructuring.
And a global consortium of banks, working with government officials in New York, announced a $70 billion pool of funds to lend to troubled financial companies.
The aim, according to participants who spoke to The Associated Press, was to prevent a worldwide panic on stock and other financial exchanges.
Ten banks -- Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley and UBS -- each agreed to provide $7 billion "to help enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets."
The Federal Reserve also chipped in with more largesse in its emergency lending program for investment banks. The central bank announced late Sunday that it was broadening the types of collateral that financial institutions can use to obtain loans from the Fed.
Federal Reserve Chairman Ben Bernanke said the discussions had been aimed at identifying "potential market vulnerabilities in the wake of an unwinding of a major financial institution and to consider appropriate official sector and private sector responses."
The European Central Bank, the Bank of England, and the Swiss central bank also made more short-term credit available to banks. European stocks fell sharply, with the FTSE 100 Index off 3.42 percent in London, the CAC-40 down 4.27 percent in Paris, and Germany's blue-chip DAX 30 falling 3.38 percent. Asian stock markets also tumbled, with India's Sensex sinking more than 5 percent. Japan and Hong Kong were closed for holidays.
Financial stocks were hard hit and the dollar fell against the pound and the euro.
Futures pegged to the Dow Jones industrial average fell more than 250 points in electronic trading Sunday evening, pointing to a sharply lower open for the blue chip index Monday morning. Asian stock markets also tumbled, with India's Sensex sinking more than 5 percent. Japan and Hong Kong were closed for holidays.
The stunning weekend developments took place as voters, who rank the economy as their top concern, prepare to elect a new president in seven weeks. It likely will spur a much greater focus by presidential candidates -- Republican John McCain and Democrat Barack Obama -- and members of Congress on the need for stricter financial regulation.
Samuel Hayes, finance professor emeritus at Harvard Business School, said the Bush administration may get a lot of blame for the situation, which could benefit Obama.
"Just the psychological impact of this kind of failure is going to be significant," he said. "It will color people's feelings about their well-being and the integrity of the financial system."
Lehman Brothers' announcement that it is filing for bankruptcy came after all potential buyers walked away. Potential suitors were spooked by the U.S. Treasury's refusal to provide any takeover aid, as it had done six months ago when Bear Stearns faltered and earlier this month when it seized Fannie Mae and Freddie Mac.
Employees emerging from Lehman's headquarters near the heart of Times Square Sunday night carried boxes, tote bags and duffel bags, rolling suitcases, framed artwork and spare umbrellas. Many were emblazoned with the Lehman Brothers name. Its businesses in Britain were placed in administration Monday, said the administrator, accounting firm PricewaterhouseCoopers, and employees carrying boxes and bags were walking out of Lehman's London offices.
TV trucks lined Seventh Avenue opposite the building, while barricades at the building's main entrance attempted to keep workers and onlookers from gumming up the steady flow of pedestrians flowing in and out of Times Square.
Some workers had moist eyes while a few others wept and shared hugs. Most who left the building quietly declined interviews.
People snapped pictures with cameras and their phones. Observers pressed up against a police barricade drew the ire of one man who emerged from the building and shouted: "Are you enjoying watching this? You think this is funny?"
Merrill Lynch, another investment bank laid low by the crisis that was triggered by rising mortgage defaults and plunging home values in the U.S., agreed to be acquired by Bank of America for 0.8595 shares of Bank of America common stock for each Merrill Lynch common share.
That values Merrill at $29 a share, a 70 percent premium over the brokerage's Friday closing price of $17.05, but well below what Merrill was worth at its peak in early 2007, when its shares traded above $98.
Charlotte, N.C.,-based Bank of America has the most deposits of any U.S. bank, while Merrill Lynch is the world's largest brokerage. A combination of the two would create a global financial giant to rival Citigroup Inc., the biggest U.S. bank in terms of assets.
Strategically, most industry analysts say it's a good fit. If the deal goes according to plan, Bank of America will be able to offer Merrill's retail brokerage services to its huge customer base. There is not a great deal of overlap between the two companies -- Bank of America does have an investment bank already, but it has never been terribly strong.
Where there is duplication, however, the combination of the two companies could result in more layoffs. Both Merrill and Bank of America have already cut thousands of investment banking jobs over the past year.
The deal would not come without risks, however. Merrill Lynch, like many of its Wall Street peers, has been struggling with tight credit markets and billions of dollars in assets tied to mortgages that have plunged in value. Merrill has reported four straight quarterly losses.
Bank of America's own finances are far from robust. As consumer credit deteriorates, the bank has seen its profits decline, and the company is still in the midst of absorbing the embattled mortgage lender Countrywide Financial, which it acquired in January.
Insurer AIG, hit hard by deterioration in the credit markets, said Sunday it is reviewing its operations and discussing possible options with outside parties to improve its business after a week when its stock dropped 45 percent amid concerns about the company's financial underpinnings.
The Wall Street Journal and The New York Times both reported early Monday on their Web sites that the American International Group is seeking an additional $40 billion in emergency funds -- possibly from the Federal Reserve -- to help it avoid a credit rating downgrade, which would make it more expensive for AIG to raise money. The insurer has already raised $20 billion in fresh capital this year.
AIG was working with New York Insurance Superintendent Eric Dinallo and a representative of the governor's office through the weekend to craft a solution that protects policyholders, according to Dinallo's spokesman David Neustadt.
"It's clear we're one step away from a financial meltdown," said Nouriel Roubini, chairman of the consulting firm RGE Monitor.
The meetings that began Friday night were a who's who of financial heavyweights: Treasury Secretary Hank Paulson, Timothy Geithner, president of the New York Fed, Securities and Exchange Commission Chairman Christopher Cox, and a host of CEOs, including Vikram Pandit of Citigroup Inc., Jamie Dimon of JPMorgan Chase & Co., John Mack of Morgan Stanley, Lloyd Blankfein of Goldman Sachs Group Inc., and Merrill Lynch & Co.'s John Thain.
For all their efforts, Lehman had to file for bankruptcy.
The end of Lehman may not stop the financial crisis that has gripped Wall Street for months, analysts said. More investment banks could disappear soon.
The independent broker-dealers "are going the way of the dodo bird," said Bert Ely, an Alexandria, Va.,-based banking consultant.
That's partly because some of the firms, particularly Merrill, made bad bets on real estate. But several analysts said that investment companies will need the deep pockets of commercial banks to survive the next few years.
On Sunday, there was also an emergency trading session being held at the International Swaps and Derivatives Association to "reduce risk associated with a potential Lehman Brothers Holdings Inc. bankruptcy." The ISDA, which arranges trades for derivatives, said it was allowing customers to make trades and unwind positions linked to Lehman.
Roubini said it's difficult to accurately gauge the health of companies like Merrill because their financial health depends on how they value complex securities. As a result, their finances aren't very transparent, he said.
That can lead to a loss of confidence in the financial markets, he said, which can overwhelm an investment bank even if it is financially healthy by some measures.
"Once you lose confidence, the fundamentals matter less," he said.
The common denominator of the financial crisis, analysts said, is the bursting of the housing bubble. Home prices have dropped on average 25 percent so far. Roubini predicted they could drop another 15 percent.
The crisis has begun to slow the broader economy as banks make fewer loans and consumers have begun cutting spending. Many economists are now forecasting that the economy could slip into recession by the end of this year and early next year.
That, in turn, could cause additional losses for commercial banks on credit cards, auto loans and student loans.
The Fed is widely expected to keep interest rates steady at 2 percent, below inflation, when it meets Tuesday. It was possible, however, that the central bank might decide in coming weeks to cut rates if such a move is seen as needed to calm turbulent financial markets.
The International Monetary Fund predicted earlier this year that total losses from the credit crisis could reach almost $1 trillion. So far, banks have only taken about $350 billion in losses.
Commercial banks are also starting to feel the pinch. Eleven have closed so far this year, including Pasadena, Calif.-based IndyMac Bank, which had $32 billion in assets and $19 billion in deposits.
Christopher Whalen, managing director of Institutional Risk Analytics, a research firm, predicts that approximately 110 banks with $850 billion in assets could close by next July. That's out of 8,400 federally insured institutions, he said, which together hold $13 trillion in assets.
Individual customers are starting to get nervous about the financial health of their banks for the first time in generations, he said. Whalen's firm analyzes the safety and soundness of banks for business clients, but began receiving inquiries from individuals in the past two months for the first time, he said.
"If we don't get ahead of this, we are going to face a run on the retail banks by election day," he said.
AP Business Writers Madlen Read, Tim Paradis and Stephen Bernard in New York, Martin Crutsinger in Washington, Ieva Augstums in Charlotte and Michael Liedtke in San Francisco contributed to this report.
Wesley Lovell
"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." - Benjamin Franklin
Does anyone else think the below sounds suspiciously like a Depression-era occurrence?
Lehman shares drop as Wall Street questions survival
By Patrick M. Fitzgibbons 1 hour, 29 minutes ago
NEW YORK (Reuters) - Lehman Brothers (LEH.N) shares lost about 40 percent on Thursday as Wall Street questioned whether the investment bank will survive because of its failure to sell assets to cover losses from toxic real estate investments.
In early trade, the stock was recently down $2.92, or 40 percent, at $4.32 as analysts voiced doubts about the bank's survival plan, laid out on Wednesday by Chief Executive Dick Fuld.
The shares have lost about 76 percent since Monday and are down 94 percent from their 52-week high of $67.73.
Other financial stocks have fallen sharply in the past week and continued to struggle on Thursday morning. Investment firm Merrill Lynch (MER.N) shares fell 14 percent to $20.00, insurer AIG (AIG.N) was down 9.5 percent at $15.84 and Washington Mutual (WM.N) fell 14 percent to $2.00.
But Lehman -- founded in 1850 by three German immigrants who traded cotton -- garnered the most attention on Thursday.
"As much as they try to calm people down or calm investors down, investors don't have yet the answers they need," said Rose Grant, managing director of Eastern Investment Advisors in Boston. "There's a complete lack of faith, lack of confidence, and lack of trust."
Lehman announced a record quarterly loss of $3.9 billion on Wednesday, and said it would spin off distressed assets and sell a stake in its asset management business.
On Thursday, a string of analysts from banks including JPMorgan, Wachovia, Goldman Sachs and Citigroup widened loss estimates and cut price targets for Lehman Brothers.
"We thought getting news out of Lehman was going to clear the dark cloud but it really doesn't. It just leaves us with a company that's limping along, that may or may not make it," said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.
The company has written down billions of dollars of assets during the last year, largely holdings of complex mortgage-backed securities. And over the last several months, the bank has been battling rumors of defecting clients and talk of a takeover at a fire sale price.
"It's unfortunate that we're in the kind of position now where events can take over. The stock is telling us that Dick Fuld is running out of options," said Michael Holland, founder, Holland & Co, which oversees more than $4 billion of investments. "Unfortunately for Fuld, who has been very adamant about keeping Lehman independent, he has to find a partner now, someone to acquire them."
Lehman's survival may hinge on the sale of a 55 percent stake in its asset management business, Neuberger Berman. But not everyone is confident a deal will be consummated.
"We are not even sure that the auction process for 55 percent of their asset management group is going to work because the people that win the auction need to find the money to buy it," Hogan said.
The Lehman worries were not just affecting the stock. Its credit protection costs soared to a record and some of its bonds traded near distressed levels.
Lehman bond prices fell, with bonds offering yields of 10 percent or more, an indication traders now view the debt as high-yield or even distressed.
Five-year credit default swaps traded at 768 basis points on Thursday, or $768,000 a year to protect $10 million of debt, widening 188 basis points from Wednesday's close, according to CMA DataVision.
WHITHER FULD?
Lehman's growing problems have led to questions about CEO Fuld and the strategy he has laid out to get the firm on more solid footing.
"What you have is a loss of confidence in management and they've got to start doing things instead of saying they're going to do things." said William Smith, president of Smith Asset Management Inc, in New York. "I'm in shock as to how Fuld let this get away from him. From what I understand the guy was a great executive for three decades."
Fuld won a reputation as a survivor and top-notch leader since coming to Lehman as a trader 30 year ago. He endured in-fighting that led to the firm's sale to Shearson/American Express in 1984 and was running Lehman when it was spun off -- undervalued and unwanted -- in 1994.
Nicknamed "the gorilla" for his intimidating presence, Fuld was considered one of Wall Street's ablest CEOs.
ANALYSTS' CALLS
Goldman Sachs downgraded Lehman to "neutral" from "buy" and removed it from its Americas buy list on Thursday.
"Management did not successfully put to rest the issues that had been pressuring the stock," William Tanona of Goldman Sachs wrote.
Oppenheimer's Meredith Whitney said Lehman's initiatives were a "step in the right direction," but she continued to expect a tough 2008 for the investment bank.
Lehman faces challenges to earnings given difficult capital markets for the next several quarters and potential write-downs of its remaining risk exposures, Whitney wrote in a note dated September 10.
She expects Lehman to break even for the fourth quarter, down from her prior view of a profit of 36 cents a share. For 2008, she widened her loss estimate to $10.24 a share from $6.67.
(Reporting by Joseph Giannone, Jonathan Spicer, Elinor Comlay, Sweta Singh, Juan Lagorio, Dan Wilchins, Walden Siew and Ellis Mnyandu; Editing by Steve Orlofsky)
Wesley Lovell
"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." - Benjamin Franklin
And I get to be out there for three more whole days. Joy.
Of note: I believe I was on the scene when Amy Goodman and other journalists with Democracy Now were arrested along with the darting anarchist protesters (note: I'm not referring to ALL protesters, but the hundred or so protesters who by their own admission were representing anarchy). Quite a scene, all told, but not a widespread riot. More like a never-ending series of quick flareups and shifting hotspots.
I'm all about protesting the war and the RNC, but some people take it too far...Then again, I wonder if some of this was staged by the RNC to cast a more positive light on them and a negative light on those who oppose the RNC's views...but that may just me being jaded towards their intimidation tricks and tactics of the past.
Some turn violent in march to GOP convention
By AMY FORLITI, Associated Press Writer 1 hour, 16 minutes ago
ST. PAUL, Minn. - Protesters attacked delegates, smashed windows, punctured car tires and threw bottles Monday, a violent counterpoint to an otherwise peaceful anti-war march at the Republican National Convention. Police wielding pepper spray arrested at least 56 people.
The trouble happened not far from the Xcel Energy Center convention site, and many of those involved in the more violent protest were clad in black and identified themselves to reporters as anarchists. They wrought havoc by damaging property and setting at least one fire. Most of the trouble was in pockets of a neighborhood near downtown, several blocks from where the convention was taking place.
Police estimates of the crowd shifted several times during the event, ranging from 2,000 to 10,000. The crowd was clearly in the thousands. Late Monday afternoon, long after the antiwar marchers had dispersed, police requested and got 150 Minnesota National Guard soldiers to help control splinter groups near downtown.
Members of the Connecticut delegation said they were attacked by protesters when they got off their bus near the Xcel Center, KMSP-TV reported. Delegate Rob Simmons told the station that a group of protesters came toward his delegation and tried to rip the credentials off their necks and sprayed them with a toxic substance that burned their eyes and stained their clothes.
One 80-year-old member of the delegation had to be treated for injuries, and several other delegates had to rinse their eyes and clothing, the station reported.
Five people were arrested for lighting a trash bin on fire and pushing it into a police car, St. Paul police spokesman Tom Walsh said. Authorities didn't have immediate details on the other arrests.
The antiwar march was organized by a group called the Coalition to March on the RNC and Stop the War, whose leaders said they hoped for a peaceful, family-friendly event. But police were on high alert after months of preparations by a self-described anarchist group called the RNC Welcoming Committee, which wasn't among the organizers of the march.
About 20 people dressed in black tried to block a key intersection. Police quickly dispersed the group, then shot two tear gas canisters at them as the fled.
Pictures taken by Associated Press photographers showed officers using pepper spray on people who appeared to be trying to block streets.
Up to 200 people from a group called Funk the War noisily staged their own march. Wearing black clothes, bandanas and gas masks, some of their members smashed windows of cars and stores. They tipped over newspaper boxes, pulled a big trash bin into the street, bent the rearview mirrors on a bus and flipped heavy stone garbage bins on the sidewalks.
One member of the group carried a yellow flag with the motto "Don't Tread on Me." The group chanted: "Whose streets? Our streets!"
At one point, people pushed a trash bin filled with trash and threw garbage in the streets and at cars. They also took down orange detour road signs. One of them used a screwdriver to puncture the back tire of a limousine waiting at an intersection and threw a wooden board at the vehicle, denting its side. Another hurled a glass bottle at a charter bus that had stopped at an intersection. The bottle smashed into pieces but didn't appear to damage the bus.
After the official march ended, police spent hours dispersing smaller groups of protesters, employing officers on horses, smoke bombs and tear gas.
Protesters put eye drops in each other's eyes after police used chemical irritants such as pepper spray and tear gas. Some wore bandanas and masks to protect themselves.
Protesters were seen lying on an interstate exit ramp to block traffic in downtown St. Paul and linking arms to block other roads.
Terry Butts, a former Alabama Supreme Court justice who is a convention delegate, was on a bus taking delegates to the arena when a brick through the window sprayed glass on him and two others. Butts said he wasn't hurt.
"It just left us a little shaken," he said. "It was sort of a frightening moment because it could have been a bomb or a Molotov cocktail."
Wesley Lovell
"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." - Benjamin Franklin
Anyone else think this sounds almost like the scene from Schindler's List where one of the Jews was shot in the back of the head for nothing?
U.S. soldiers say they executed Iraqis on riverbank: report
1 hour, 30 minutes ago
WASHINGTON (Reuters) - Three U.S. soldiers killed four handcuffed and blindfolded Iraqi prisoners with pistol shots on the bank of a Baghdad canal last year, the New York Times reported on Wednesday.
Sergeant First Class Joseph P. Mayo, the platoon sergeant, and Sergeant Michael P. Leahy Jr., Company D's senior medic and an acting squad leader, made sworn statements in January to Army investigators in Schweinfurt, Germany probing the incident, the newspaper reported on its website.
The men each described killing one of the Iraqi detainees, as directed by First Sergeant John E. Hatley, according to the statements. Hatley shot two other detainees with a pistol in the back of the head, Mayo and Leahy told investigators, according to the NYT.
U.S. soldiers cannot harm enemy combatants once they are disarmed and in custody, the NYT said.
A spokesman for the U.S. Army in Europe declined to comment, saying he could not speculate on any future legal action.
David Court, the lawyer in Germany named by the NYT as representing Hatley, was not immediately reachable.
According to Leahy's statement, cited by the NYT, Army officials directed Hatley's convoy to release the men because there was insufficient evidence to detain them.
"First Sergeant Hatley then made the call to take the detainees to a canal and kill them," as retribution for the deaths of two soldiers from the unit, Leahy said in his statement.
"So the patrol went to the canal, and First Sergeant, Sgt. First Class Mayo and I took the detainees out of the back of the Bradley (fighting vehicle), lined them up and shot them," he added, according to The Times. "Then we pushed the bodies into the canal and left."
After the men were killed, Hatley told Leahy and Mayo to remove the Iraqis' bloody blindfolds and plastic handcuffs, according to the newspaper. The three soldiers then shoved the bodies into the canal and drove back to their combat outpost, the paper said.
No charges have been filed against Hatley, Mayo or Leahy -- all from Company D, First Battalion, Second Infantry, 172nd Infantry Brigade.
However, four other soldiers have been charged with conspiracy to commit premeditated murder relating to an incident that occurred last year in Baghdad, the U.S. Army in Europe said in a statement last month.
A hearing in that case opened on Tuesday and is still going on in the southern German town of Vilseck, the U.S. Army spokesman said on Wednesday.
Wesley Lovell
"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." - Benjamin Franklin
