I hope y’all got a good night sleep, cause today is going to be a busy day. Here’s a quick snap of what happened why you were slumbering:

Futures trading: Dow off 375, S&P500 off 53, Nasdaq off 55; Oil is down to $95, Gold up $15.

Morning Headlines

Lehman Files for Biggest Bankruptcy as Suitors Balk (Bloomberg) 
Ultimatum by Paulson Sparked Frantic End  (WSJ)

What, No Lehman Aid?  (Newsweek)

• ‘Tectonic’ Shift on Wall Street as Lehman Fails, Merrill Sold  (Bloomberg)

After Frantic Day, Wall St. Banks Falter (NYT)
Lehman plans to file for bankruptcy protection (Marketwatch)

Wall Street crisis: Is this the death knell for derivatives? (Guardian)
The Japan Lesson: U.S. Must Own Up To Its Bank Crisis (WSJ)

Federal Reserve Offers No Cash but Loosens Standards on Emergency Loans  (NYT)

Banks roll out $70 billion loan program (AP/Yahoo)
World’s biggest banks join forces (FT)

Where’s The Ref? (Forbes)
Lehman’s dying hours (Fortune)
Financial turmoil as top bank collapses (CNN)
Fed Expands Lending Facilities in Bid for Stability (WSJ)
LEHMAN’S CARCASS RIPE FOR PICKING (NY Post)

5 Days of Pressure, Fear and Ultimately, Failure (NYT)

A.I.G. Seeks $40 Billion in Fed Aid to Survive (NYT Dealbook)
Jittery Road Ahead (NYT) 
Bank of America to Buy Merrill for $50 Billion as Crisis Widens (Bloomberg) 
Goldman, Morgan Grasp at Bitter Prize (WSJ)

China Cuts 1-Year Lending Rate; Reduces Lending Curb (Bloomberg) 
Banks Fear Next Move by Shorts (NYT)
A Chaotic Sunday Opens Wall Street’s Week (WSJ)

~~~

Intrade now has futures trading where you can bet on what US Bank will fail next; Incidentally, the US also has a similar financial mechanism — they are called Puts.

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Related Blog Posts
Data Factoid: Securities Industry Employment  (Infectious Greed)
WaMu Failure Could Trigger Extension of Deposit Guarantees (Naked Capitalism)
Greenspan’s Black Swan (iTulip)

A Sunday Without a Bailout? How Novel ! (Big Picture)

Investing in Financial Stocks is Tough (Aleph Blog)

Is a Volatility ETF a Good Idea?  (Condor Options)

The end of banking as we know it – and another US rate cut  (Eurointelligence)

Disaster in the Derivatives Market Redux (Financial Armegeddon)   

Why Lehman Brothers Is Not Bear Stearns (MarketBeat)

Fed’s PDCF, TSLF Pawnshop Limits Increased; Section 23A Rules Violated (Global EconomicTrend Analysis) 
Lehman 2007 Bonuses? (Credit Slips)

If Lehman collapses expect a run on all of the other broker dealers and the collapse of the shadow banking system (RGE)

Blame the Short-Sellers  (Infectious Greed)

How Washington Failed to Rein In Fannie, Freddie (Big Picture)

Category: Bailouts, Corporate Management, Credit, Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

20 Responses to “Morning News Dump”

  1. peter Ibsen says:

    how can the sp500 only be down some 20% when we have had so many banks go bellyup… This weekend almost 3 large banks went under,, (leh) and AIG, MER ( the latter were “saved”. last week. FRE, FNM… Whats up with sp500. How can it only be down small 20%..

  2. dblwyo says:

    Seem to recall Luskin participating in MSN’s Strategy Lab back around ’02/’03 and basing his entire strategy around some top-down macro analysis that was very ill-grounded and ill-thought. He argued that we’d get a quick recovery which would rapidly drive up l.t. rates and rode is error into a disaster. That was conventional wisdom but didn’t fit the data or the underlying dynamics. The famous ‘conundrum’ problem where worldwide liquidity and (as we now know) a below par recovery kept demand for funds below supply and kept rates down. He doesn’t seem to have gotten any more willing to face facts and re-think now than then. ONe has to wonder how he survives.

  3. Joshua says:

    I’ve only felt the urge to cheer on Mr. James J. Cramer twice. On the first occasion, he wrote a most moving and beautifully written piece about 9/11. On the second occasion, he basically told the ridiculous Luskin to sling his hook.

  4. VennData says:

    The reason you don’t see more dislocation, much lower GDP, employment, lower stock prices etc. is because all this merely an appendectomy. The system is removing – disintermediating – the useless “high finance” of Wall Street.

  5. NJ says:

    Didn’t Don Luskin say last week that you can just buy anything blindfolded? Do people really take Mr. Luskin seriously? I just have a hard time taking someone seriously who wears a sport coat over a bumper sticker t-shirt. Maybe that’s just me.

  6. Eclectic says:

    What a soldier you are!

    Good work.

    It’s no so much today that I’m concerned about, but how the common public investor reacts to whatever transpires today, during the day and into tonight’s media coverage of those events.

    Frankly, were today to be down 300, 400 or even 500 points on the DOW, it still wouldn’t duplicate the emotional distress of either the 1929 or 1987 crashes.

    With circuit breakers and a financial markets administrative tendency toward prevention of declines – halts, closings, trading stays of various sorts, etc. – it would take several days to vent all the negative sentiment developed over the weekend.

    Market participants went to bed Friday essentially knowing that the FRB and Treasury would reach some ultimate basis of liquidy with Lehman before the Asian and European markets opened on Monday.

    Tonight’s headlines won’t fret the public so much about Lehman… but “Merrill Sold” will be the drumbeat of most of local media. It’ll be a little like “Mom, Pie and Chevrolet” just sold out to Hyundai.

  7. Eclectic says:

    BTW, from my prior comments, I did not mean to say the markets will use several days to duplicate the crashes of 1929 and 1987, but only that if negative sentiment produced that kind of result, then… that couldn’t be accomplished in as short a time as those earlier crashes.

    That’s because of the physical and administrative circuit breakers in place today. Plus, it sounds like Benber N. Anke is available for equities if necessary. He’s trying not to have to dig up Uncle Milton and appologize to him for the second time.

    Where’s all this going?… Well, I and many others here on TBP have known for some time that it was likely that we would get to h-e-r-e and n-o-w.

    What’s impossible to know is: Where do we go from here?

    This liquidity crisis isn’t over yet… but just how close to the end we are… nobody can yet know.

  8. MM says:

    Just let the CNBC rescue team do the job, led by Dennis..Larry..Jim..Vince and Maria of course, they will cheer the market up again! Remember the last week turnaround? There is no worry, we’ll be all right.

  9. Eclectic says:

    Barringo,

    Let me play Devil’s Advocate and put a positive spin on the weekend news.

    Okay… Lehman gone… no big deal. Nobody is going to be that surprised. The employers walking out the door with all their stuff in cardboard boxes, into the midnight NY air, are certainly frustrated and in shock, but there’s no real surprise on their faces. They’ve been riding the Slope of Hope for weeks now… or at least for days. It’s just finally over and they can move to the grieving stage.

    Merrill Sold?… Nah!… It’s a merger! All the big banks and big BDs have been doin’ it for years now. No big deal.

    By the end of the day, I’m not entirely sure the market couldn’t regain much of what’s apparently lost in futures right now. Who knows!… Mr. Market might just be flat or uppish by the close.

    Let’s meet back here after hours and evaluate the course of sentiment and map it throughout today’s upcoming trading.

    See you then.

    BTW – on Bondie: Whoyo Daddy e-uzz?… Whoyo!… Whoyo!

    Whoyo Daddy e-uzz?… Whoyo!… Whoyo!

  10. John(2) says:

    Eclectic | Sep 15, 2008 7:14:37 AM

    Cramer’s Syndrome? I suppose it’s one scenario but it doesn’t seem likely to me since London is already down nearly 5%. In any case the reaction to all this needs to be looked at on Friday at the soonest. The Merrill situation is actually a fairly big deal on Main Street America because of their ubiquitousness particularly since the media seem to be playing it as failure.

  11. steve from asia says:

    why you were slumbering > while you were slumbering

    get some rest!

    damn kids, staying up all night… blogging.

    p.s. thanks Barry :)

  12. leftback says:

    I knew you couldn’t stay away Barry.. good stuff. You deserve a medal for this.

    Well, this is another big one, even if it isn’t THE big one. Like others I am a little apprehensive of what happens around us as the great sleeping public awakes. It’s not like we haven’t tried to tell them.

    I am spending the day thinking about the trades I am going to make at the end of the day after everyone else has thrown their toys out of the pram. Looks like there will be some nice cheap oil company stocks.

  13. trackerman says:

    Unfortunately, with all this bad news on Sunday, the DOW will probably drop enough today so that the FED drops interest rates to 1.5%. All the gains that the dollar has made in the last several weeks are toast and the DOW rallies 500 points on Tuesday.

    In the end, we (the tax payer) still pay for the banks’ decade long party.

  14. lb,

    any thoughts on sub-$75 Oil?

    or the Canadian Royalty Trusts, like HTE for ex.?

  15. add’l to Morning News…

    A United Nations agency is quietly drafting technical standards, proposed by the Chinese government, to define methods of tracing the original source of Internet communications and potentially curbing the ability of users to remain anonymous.

    The U.S. National Security Agency is also participating in the “IP Traceback” drafting group, named Q6/17, which is meeting next week in Geneva to work on the traceback proposal. Members of Q6/17 have declined to release key documents, and meetings are closed to the public.

    The potential for eroding Internet users’ right to remain anonymous, which is protected by law in the United States and recognized in international law by groups such as the Council of Europe, has alarmed some technologists and privacy advocates. Also affected may be services such as the Tor anonymizing network.

    “What’s distressing is that it doesn’t appear that there’s been any real consideration of how this type of capability could be misused,” said Marc Rotenberg, director of the Electronic Privacy Information Center in Washington, D.C. “That’s really a human rights concern.”

    Nearly everyone agrees that there are, at least in some circumstances, legitimate security reasons to uncover the source of Internet communications. The most common justification for tracebacks is to counter distributed denial of service, or DDoS, attacks.

    But implementation details are important, and governments participating in the process — organized by the International Telecommunication Union, a U.N. agency — may have their own agendas.
    http://news.cnet.com/8301-13578_3-10040152-38.html?tag=nl.e703

  16. Stuart says:

    check out the IRX… cut in half to .74. Bad print?

  17. Bruce says:

    Well, still don’t know what the government plans for F and GM…If we bail them out, will they still be a punching bag for Toyota and Honda? Would anything change?

    Frankly I hope this was a line in the sand.

    Bruce in Tennessee

  18. Chester White says:

    Market’s down less than 2% midmorning.

    Nothing.

  19. Concerned Citizen says:

    BR, Puts because they are use to also hedge some times do not give an accurate measurement. Am I right or wrong? Educate me please!

  20. Innocent Bystander says:

    What the hell is sleep