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Disappearance of capital sources is true cause of Lehman failure and AIG rescue
Why did Lehman really fail? The equity window is effectively closed for most financial services companies. This fact was the true trigger for the meltdown in AIG and Lehman and the problems at WaMu, HBOS and Merrill Lynch.
Moreover, it…
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To…
Definition of the day: the law of unintended consequences
Given the fact that the regulatory authorities in the U.S. and the UK have taken the unusually manipulative step of banning all short sales of financial institutions outright, it bears remembering that all actions have consequences, both…
Short-selling financial shares is now illegal
The latest government intervention into the capitalist system is the move by the UK and U.S. governments to ban short-selling of all financial stocks outright.In the wake of the severe market turbulence unleashed by the failure of Lehman…
Chart of the day: the largest bankruptcies in US history
The bankruptcy of Lehman Brothers, with assets of over $600 billion is the largest in U.S. history. Wikipedia has catalogued the list of the largest U.S. bankruptcies of all time. (Hat tip: Börsennotizbuch)
Drum roll, please.
The current…
AIG: a short post-mortem
The meltdown of the world's largest insurer AIG (AIG) makes the stakes of this credit crisis plain to all.
In my view, the AIG situation and the subsequent turmoil in financial markets could have been avoided. The markets were clearly on…
Presidential debates crucial in test of economic leadership
Edward Harrison here.In the last post, Marshall commented on the need for the U.S. Presidential candidates to show their mettle in a time of financial volatility. As I write this, the Dow Jones Industrial average has just finished the day…
The 3 AM call: financial crisis has that phone ringing
Marshall Auerback here.
This crisis is an audition for the presidency in real time -- and an opportunity for a candidate to step up to the plate. If handled the right way, it could decide the election. If it is treated like another…
US unemployment claims rise, labor market is weak
U.S. jobless claims registered an increase to 455,000, bringing the widely followed 4-week average to 445,000, its highest level since 2002. Recently, the jobless claims numbers have been creeping up indicating the labor market in the U.S.…
Dick Fuld feels horrible about Lehman collapse
Dick Fuld, the Chief Executive of the beleaguered and now bankrupt investment bank Lehman Brothers, finally addressed staff after the worlds largest bankruptcy in history. He told staff he felt horrible for their personal and financial…