Some clouds from out the window of our company's office in wall street. The clouds remind me of fluffy muffin tops.
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Wall Street
Someone gave the iconic bull on Wall Street a case of the blue balls.
It's suspiciously timed with Banksy's visit to New York City.
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This $700 billion proposed bailout is raising a lot of red flags amongst the public, media, and Congress, both democrats and republicans. And as Forbes points out even the basic question of how this enormous figure of 700 billion was determined is unclear:
"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."
ARE YOU FUCKING KIDDING ME?!?!?
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This receipt was found at a Chase ATM on 45 Wall Street showing a savings account balance of exactly $97,084.23 after he withdrew $100 (probably to buy lunch). As the Consumerist points out:
...this guy knows what he's doing; note how the balance is just under the $100,000 limit for full FDIC coverage.
Uhm, right! That's why I too keep my savings account balance under $100,000.
And I just heard that JP Morgan Chase purchased my bank Washington Mutual. So this means that I too now can access the same ATMs as this account holder without having to pay a transaction fee! Cha-ching! Money in the wallet and two dollars closer to $97,000.
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1. Kaizar, Associate Editor at Newstrust recommends this featured article from the Washington Post that helps to explain what the fuck is happening on Wall Street:
Indeed, it is increasingly clear that Wall Street chief executives themselves didn't fully understand the risks they were taking on during the boom years of this decade; they have seemed as blindsided as any regulator.
The problems on Wall Street may go deeper. Financial firms have expanded vastly in the past decade, hiring tens of thousands of bright business school graduates to engineer new financial products, find ever more complicated ways to manage other peoples' money, and dream up new ways to combine, divide, and recombine corporate America.
Some large portion of that work, it now appears, wasn't really creating any value for the company's clients or for the U.S. economy. No matter how many times crummy mortgage loans are recombined into clever packages, they're still crummy.
In a perfect world, those excesses would be corrected by a gradual, orderly decline, in which a few firms get bought out by competitors, some modest layoffs occur, and Wall Street cuts back on its hiring for a few years.
In the real world, that correction is occurring before our eyes, through a series of convulsive weekends in which the entire financial world appears at risk of coming off the rails.
2. There's also an informative Q & A about this turmoil at the New York Times:
Q. How will this affect the mutual funds in my 401(k)? I'm beginning to think I should move my money fast! — Toni Hilton
A. To put it mildly, it’s likely that your mutual funds aren’t having their best day: the Dow Jones industrial average closed down more than 500 points, or about 4.42%. But markets are mercurial beasts, and we don’t know what’s going to happen tomorrow, the day after — or six months from now.
That's why it's so important for investors to be diversified across different asset classes and investment types. It’s one of the most important ways investors can produce more consistent results, while helping cushioning against sharp declines. You want to make sure your money is divided across different slices of the stock and bond markets: that means domestic and international, large, mid-sized and small, as well as other alternative asset classes.
It also might be time to review your risk tolerance: if you’re tempted to move your money around on a difficult day, it might be time to rethink your stock allocation (in other words, you might want to lower it).
Also keep in mind that market declines work in your favor: they allow you to buy more stock or mutual funds shares cheaply.
3. Although brokerage firms such as Lehman, are forbidden from filing Chapter 11bankruptcy, nonetheless Lehman Brothers officially filed for Chapter 11 bankruptcy this morning "listing debts of $613 billion and naming as unsecured creditors owed hundreds of millions of dollars banks from Tokyo, Hong Kong, New York, Singapore and Taipei, among others."
Slate's Explainer answers the question: How was Lehman able to do this, and how exactly does a financial-services firm declare bankruptcy?
So how did Lehman manage to file for Chapter 11? It has separated out its businesses. Lehman Brothers Inc., the firm's brokerage arm, is expressly not included in the filing, and Monday afternoon's news reports suggest there may still be outside investor interest in the brokerage arm.
Is Lehman Brothers Holding Inc. - the parent company - in the clear because it can reorganize under Chapter 11? Not likely.
Read more here.