September 2008

The Treasury hasn't - and won't - use the term "nationalization" to describe its plan for housing, Fannie Mae and Freddie Mac.  It doesn't have to.  It's clear enough. In a remarkable turn of events, the Treasury announced today it will take over Fannie (FNM) and Freddie (FRE).   The plan includes billions in purchases by the government of preferred shares of these two companies.   It ... read more

A quick entry on the breaking Lehman news: LEHMAN CFO SAYS ITS ALT-A MORTGAGE ASSETS MARKED DOWN TO $0.39 PER $1 PAR LEHMAN CFO SAYS SUBPRIME MORTGAGE ASSETS MARKED DOWN TO $0.34 PER $1 PAR VS $0.55 IN Q2 LEHMAN CFO SAYS ASSET BACKED CDOS MARKED DOWN TO $0.29 PER $1 PAR VS $0.35 IN Q2 What this means is that Lehman (LEH) has put a new, lower value on the assets everyone is worried about ... read more

Lehman Brothers (LEH), Washington Mutual (WM) and other banks like Merrill Lynch (MER) are tumbling again. The credit default swaps (basically a measure of risk on the bonds of a company) are soaring on Lehman, which in plain english means that the bond market is also pricing in much risk on the company.   We know the stock market has already done this by selling the stock to where it is ... read more

Just did the update on Hurricane Ike with Accuweather.  Mentioned the storm's path toward Houston and parts of Texas.    Today Valero announced its closing its Texas City refinery.   Watch others do the same. Here is list of 20 biggest U.S. refineries: 1 EXXONMOBIL REFINING & SUPPLY CO Texas BAYTOWN 567,000   2 EXXONMOBIL REFINING & SUPPLY CO Louisiana BATON ... read more

We will be live on Fox Business Network at 8pm ET Sunday night to discuss what is certain to be a busy weekend on Wall Street and in Texas. In addition to the continued questions surrounding Lehman Brothers (LEH), Washington Mutual (WM) and now American International Group (AIG), keep an eye on Hurricane Ike.  The storm is big, powerful and moving into Texas.   The read more

In 12 years in business journalism, I have never seen such a troublesome or confusing time.   While Lehman teeters on the brink and there are reports that Merrill Lynch may be bought by Bank of America, the question becomes: what does this mean for Main Street? The answer isn't fully known yet and may not be for some time, but we know it's not good. If Lehman Brothers fails and is ... read more

Lehman Brothers has filed for the largest corporate bankruptcy in American history.   Let's put it into persective.   Enron listed $63 billion in assets when it filed for Chapter 11 in 2001.   WorldCom, which until now was the biggest bankruptcy, listed $103 billion in assets.   On its latest filing, Lehman listed $639 billion.   Lehman looks to be the biggest corporate bankruptcy ... read more

The massive numbers involved in the AIG debacle--$85 billion in loans, $1.1 trillion in assets--are staggering.  But it's a tiny figure--$0.03--which may have had the biggest impact. Three cents is the amount the value of a dollar has fallen in the money market fund Primary Fund.   Each dollar investors have in that fund are now worth just 97 ... read more

The big story today likely to be the money fund and Treasury bill (T-bill) market.   The T-bill market has gotten expensive it's because being viewed as the last safe haven.   Now it can cost you more than $1 to buy a $1 T-bill.    Its also the reason that the 10-year Treasury yield has dropped so rapidly recently.   These are being viewed as the "sock drawer" for institutional ... read more

The run for the least risky assets - cash and treasury bills - continues.   Today Putnam announced it is closing a money market fund due to "significant redemption pressure" (see release below).    This demonstrates what I wrote about yesterday and what we lead with on the show.   Institutional investors are scared and are moving to cash.   They are also buying short-term treasury bills ... read more