fuck up banakee and han paulson !

[madmansg]

by refusing to help lehmon , it cause a run on the ENTIRE WORLD banking system. REALLY FUCK UP pair of jokers.

============
JP Morgan role questioned

NEW YORK - CREDITORS of Lehman Brothers have asked a judge to allow an investigation into whether JPMorgan Chase (JPMC) had a role in weakening Lehman as it headed toward bankruptcy.

The creditors committee filed the request in court documents on late Thursday.

The committee believes Lehman Brothers Holdings (LBHI) had more than US$17 billion (S$25 billion) in cash and securities held at JPMorgan before its bankruptcy filing but that JPMorgan froze the assets on Sept 12, three days before Lehman filed for bankruptcy court protection. Its case is the biggest in US history.

'The creditor's committee believes that as a result of JPMC's actions, LBHI suffered an immediate liquidity crisis that could have been averted by any number of events, none of which transpired,' lawyers for creditors wrote in court papers.

'In freezing LBHI's assets, JPMC was purportedly holding all of LBHI's assets as a potential offset against any claims,' lawyers said.

JPMorgan provided billions in clearing advances - short-term loans investment banks use to clear trades on a daily basis - to Lehman in the days around its bankruptcy filing.

Lehman disclosed last week that JPMorgan is its biggest creditor holding secured claims worth an estimated US$23 billion.

A spokesman for JPMorgan Chase declined to comment on Friday.

US Bankruptcy Judge James Peck is scheduled to consider the creditors' request on Oct 16.

Separately, the government's pension insurance agency objected to Lehman's sale of its North American investment banking and trading operations to Barclays Capital, a deal that closed Sept 22.

Lawyers for the Pension Benefit Guaranty argued that Lehman has not said whether it would use any of the proceeds from the sale to shore up its pension plan, which covers 25,000 former and current employees.

If the plan were to be terminated today, Lehman would need to add US$72.5 million to make the plan whole.

Also, a slew of vendors filed objections to Lehman's cancellation or transfer of contracts. Objectors included the Chicago Mercantile Exchange, Cisco Systems Inc., Bloomberg LP, Sun Microsystems Inc. and others.

Lehman Brothers entered bankruptcy protection on Sept 15 with assets of US$639 billion and debt of US$613 billion.

It was forced to file for bankruptcy protection under pressure from the shrinking credit markets and a loss of confidence among investors that it could carry on its day-to-day business.

That marked an end to what was once the nation's fourth-largest investment bank.

In addition to the Barclays buyout of key US units, Lehman has sold its money management arm, Neuberger Berman, to two private equity firms and its Asian, European and Middle Eastern businesses to Japan's largest brokerage, Nomura Holdings. --AP

 

[DIVISION1]

Such a bailout will not solve anything. The problem is still there. The parties at investment banks could end for many. It is in times like these we must remember our roots, and move away form arrogant exuberance of money made and spent which essentially belong to our children and their children.

 

[jw5]

I think those 2 guys have dobe as much as they could with what they have. Paulson is said to be extremely wealthy, he certainly doesn't need to be doing this and taking the heat, other than trying to do what is best for the country.
It is some of the greedy people on wall street that has created and exacerbated this problem.

 

[madmansg]

Such a bailout will not solve anything. The problem is still there. The parties at investment banks could end for many. It is in times like these we must remember our roots, and move away form arrogant exuberance of money made and spent which essentially belong to our children and their children.

pleae do more research to save on bandwith

==========

Government steps to head off run on money funds
Friday September 19, 5:11 pm ET
By Mark Jewell And Martin Crutsinger, Associated Press Writers
Treasury, Fed prop up $3 trillion money-market fund industry after big investors flee

WASHINGTON (AP) -- The federal government on Friday stepped in to bolster the teetering $3 trillion money-market mutual fund industry and stem a wave of withdrawals that resembled a Depression-era run on the banks -- sparked largely by panicked institutional clients rather than individual investors in what are normally considered to be the safest of investments.

ADVERTISEMENT
The Treasury Department said it will tap into a $50 billion fund created during the Depression and temporarily provide guarantees for the popular investment products, held in some 38 million accounts that enable investors to see modest returns while keeping cash readily available if needed. Providing additional support, the Federal Reserve took steps to back typically safe commercial short-term lending that underlies fund assets.

The moves, criticized as risky by the American Bankers Association, are expected to usher in an era in which money fund managers invest more conservatively, and customers increasingly seek the safest funds rather than those promising the highest yields.

The government's intervention came after the Reserve Primary Fund on Tuesday suffered a setback that had occurred just once before in the industry's nearly four-decades-long history: its underlying assets fell to 97 cents for each investor dollar put in, exposing customers to losses after a soured investment in debt of Lehman Brothers Holdings Inc. that led investors to pull out en masse.

While retail customers triggered that instance of a phenomenon the industry calls "breaking the buck," observers say it was subsequent pullouts by investors such as corporations and pension funds that threatened the whole system, leaving the government scrambling to prop up an industry holding about $3.4 trillion in assets.

The trigger to act appeared to be Putnam Investments' sudden move Thursday to shut down an institutional fund and return money to clients after investors rapidly pulled out -- even though the fund didn't hold any debt of the hardest-hit financial firms, such as Lehman.

Absent government action, the trouble at the $12 billion Putnam fund "would have started happening at other funds, and that would have built to a panic quickly," said Don Phillips, a managing director at fund research firm Morningstar Inc.

When a fund suffers a rush of orders to pull out money, fund managers must sell assets -- typically at a loss when it must be done quickly, and especially amid this week's market turmoil.

When the withdrawals are from institutional investors, "They're trading blocks of $1 million to $10 million and $100 million at a time, rather than $10,000 or $100,000" for the retail investor, said Peter Crane, president of Crane Data, publisher of the money-market fund newsletter, Money Fund Intelligence.

Industry watcher iMoneyNet said investors pulled $224 billion from money-market funds in the seven-day period ended Thursday. On Wednesday alone, about $89 billion was taken out, and another $56 billion was withdrawn on Thursday, said iMoneyNet Managing Editor Connie Bugbee.

The moves by Treasury and the Fed "will likely save the money-market fund business," Crane said. "It was getting quite dire, though funds could have withstood another couple of days of redemptions like they were seeing. But had it accelerated, you would have seen a dire threat of incidents of breaking the buck occur all over the place."

While money-market funds became popular in the 1970s among small investors, institutional investors are now bigger players, with nearly twice as much invested -- and more power to trigger a run on fund assets. In a volatile market, such clients have been fleeing investments with even the smallest risk and seeking the safety of Treasury Bonds, I.O.Us from the government that are now offering unusually low yields because of their sudden popularity.

Assets of institutional money-market funds dropped by $173 billion to nearly $2.2 trillion over the seven days ended Wednesday, while assets in retail money-market funds grew by nearly $4.3 billion in the same period to $1.2 trillion, according to the Investment Company Institute.

Money-market funds differ from funds investing in stocks and bonds, which make up some two-thirds of the nearly $12 trillion mutual fund industry. As a whole, until recently money-market fund assets had grown, because of their conservative reputation.

Out of the money fund total, the bulk is in taxable funds -- invested in such items as short-term loans between corporations and banks -- held by institutional customers. Retail funds hold most of the smaller component of funds' tax-exempt assets invested in safer and lower-yielding government debt.

To bolster the slightly riskier $2 trillion in taxable funds, President Bush authorized the Treasury Department to use its Exchange Stabilization Fund to provide guarantees of up to $50 billion for the next year. The exchange fund was created in 1934 to provide support for the dollar.

When the assets in a fund fall below the $1 per dollar invested, customers will be notified that their fund would be covered by the insurance program.

The Fed, meanwhile, will expand its emergency lending efforts to allow commercial banks to finance purchases of asset-backed paper -- a type of corporate I.O.U. -- from money funds.

Keith Hennessey, director of Bush's economic council, said the moves were prompted by broader concerns than just a run on funds.

"If you have a money-market mutual fund, you're used to that being a low-risk investment and you're also used to being able to call up your broker and say `Hey, I need to be able to withdraw money from that money today.'"

"We were seeing that there was a significant enough risk that either of those things might start to be jeopardized," Hennessey said.

Morningstar's Phillips said the government's moves "have essentially taken all the concerns an investor might have away, across the board."

Treasury's temporary guarantee of funds gives them as much government backing as FDIC-insured money-market accounts sold through retail banks, Phillips said.

Money-market accounts in banks typically offer lower yields than those offered through mutual fund firms, because they make safer investments and also must pay higher overhead costs for expenses such as operating bank branches.

The American Bankers Association issued a statement warning Treasury's move "runs the risk of undermining the nation's banking system."

ABA Chief Executive Edward Yingling said because money-market mutual funds lack the same regulatory restrictions that banks face governing the types of investments they can make, the fund companies' rival products could offer higher yields and "will be in a significantly superior market position to FDIC-insured bank deposits."

But Phillips said the fund firms' yield advantage may begin to shrink as this week's turmoil leaves investors more risk-averse, and fund managers shift to safer strategies.

He said investors also are more likely to select funds run by bigger firms with the financial might to pour money into a fund if it runs a risk of breaking the buck.

"Fund managers will prize avoiding losses over chasing the highest yield," he said.

Mark Jewell reported from Boston for this story. Associated Press economics writer Jeannine Aversa contributed to this report from Washington.

 

[DIVISION1]

Things will become apparent.

 

[dysentry]

The real criminal Greenspan is already enjoying life elsewhere...

 

[The_Latest_H]

The real criminal Greenspan is already enjoying life elsewhere...

His list of no-action and delays have completely destroyed his reputation. Its not unfair to say that now, whatever he touches, will turn into ashes, not gold.

 

[DIVISION1]

You can take drugs and win gold medals. Just know when to retire and not get caught.

 

[makapaaa]

Such a bailout will not solve anything. The problem is still there. The parties at investment banks could end for many. It is in times like these we must remember our roots, and move away form arrogant exuberance of money made and spent which essentially belong to our children and their children.

Have u told this to your owner's butch?

 

[makapaaa]

You can take drugs and win gold medals. Just know when to retire and not get caught.

Sounds like what your owners are doing.