More big banks failing...
Sep 14, 2008 at 2:17 PM Thread Starter Post #1 of 317

AlanY

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Lehman Bros bites the dust tomorrow and Washington Mutual is unlikely to survive beyond next week. Merrill Lynch and AIG are both in very precarious positions. These aren't small institutions...

What are your thoughts on the ongoing implosion in banking? For me it's moved from just a fascination to something to be concerned about. Anyone know people who've been laid off in the industry?
 
Sep 14, 2008 at 2:34 PM Post #2 of 317
I guess it goes to show just how deeply the rot in the industry was allowed to go. Doesn't come as a complete surprise though. Personal greed and the disdain for others is strong in the little ones Luke.

I think it's time to set up a Guillotine in Times Square and send the mobs into Wall Street and send a really strong message.

And transfer our countries leadership back to Washington where it was intended.

...and reconstruct some much needed dams and levies along our economic rivers before all the good stuff flows out to sea and we finally end up getting flooded and drown with stuff we don't really want.
 
Sep 14, 2008 at 3:13 PM Post #4 of 317
Enron should have been a warning...
This is what happens when you nurture an environment that encourages ruthlessness and greed unrestrained by any respect for anything or anyone but your own narrow self interests. (i.e. free market thinking)
The worst thing is that the majority of the people responsible for this crisis will get away without their behaviour even being questioned and hundreds of millions in severage packages.
 
Sep 14, 2008 at 3:34 PM Post #5 of 317
Greed is good ---Gordon Gekko
 
Sep 14, 2008 at 4:08 PM Post #6 of 317
the next time someone argues for deregulation in business or finance in 10 years or so, remember this.
 
Sep 14, 2008 at 4:48 PM Post #7 of 317
Unfortunately I think it's a basic issue with the way American business runs. There is little thought as to whether or not you are doing the right thing, the sustainable thing, it's all about what the balance sheet shows for the next quarter and what the stock price is.

In this case, the lenders were caught in a trap. They knew the loans they were writing were crap. They knew the loans would eventually blow up. They also knew that if they didn't write them, their stock price would have suffered dramatically and the executives would have been unemployed.

It seems to me that the European companies I have worked with have been much more realistic and more concerned about doing the right thing both for the company and the society around them. In the vast majority of American companies I have worked for someone crying foul would have been terminated. With the European companies I have worked for they would have been listened to, even if the decision wasn't in their favor.
 
Sep 14, 2008 at 7:08 PM Post #10 of 317
"We are now taught to believe that legerdemain tricks upon paper can produce as solid wealth as hard labor in the earth. It is vain for common sense to urge that nothing can produce but nothing; that it is an idle dream to believe in a philosopher's stone which is to turn everything into gold, and to redeem man from the original sentence of his Maker, 'in the sweat of his brow shall he eat his bread.'" --Thomas Jefferson to Charles Yancey, 1816.
 
Sep 14, 2008 at 8:25 PM Post #12 of 317
We moved from a "Conventional Mortgage Loan" being 80% LoanToValue to 100% plus LTV becoming common place. The Government pushed the agenda of home ownership for all. This was / is a noble idea, but, not a very practical one. Not to mention many Banks took advanatage of this thought process to push more mortgages out the door that they knew had a greater likelihood for failure. What you see today is the result. An oversimplification for sure, but, this process played it's part, IMO.
 
Sep 15, 2008 at 2:42 AM Post #13 of 317
Wow, quite a wild Sunday. Lehman Bros. is bankrupt, AIG asks the Federal Reserve for assistance in trying to stay alive, and Merrill Lynch is sold. (Not sure why BoA is paying what it is for Merrill when they could snatch it up for cheaper tomorrow.) Washington Mutual still delaying the inevitable for a few more days.

AIG is probably the most surprising, given that it's one of the largest companies in the S&P 500.
 

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