Bank of America completes Merrill Lynch investment bank purchase
Just what we need is more super-sized banks. Now when BofA gets into trouble we will be talking about how they are “too big to fail”. I thought we passed an act in the 90s that prevented investment and commercial banks to be under one roof? How soon we forget.
News:
Bank of America Corp completed its purchase of Merrill Lynch & Co on Thursday, creating the largest U.S. bank and perhaps one of the biggest challenges yet for longtime Chief Executive Kenneth Lewis.
The closing allows Bank of America to bypass JPMorgan Chase & Co and Citigroup Inc in size, giving it about $2.7 trillion of assets.
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Goldman Sachs posts loss since going public in 1999
No doubt that we will see continue losses and write-downs in the future until they finish de-leveraging and find a sustainable balance in their business model. It is sad that all the investment banks have either gone out of business or are now commercial bank holding companies. Capitalism is not dead but it needs a second to catch its breath.
This is what happens when people get too greedy and they lose all fear. It is always a balance of Fear vs. Greed. The is the natural balance that keeps the free market in check. That is why it is bad when government start intervening and picks winners and losers, it through everything out of whack and make private capital evacuate the market until the rules quit changing every other day.
News:
Goldman Sachs Group Inc reported its first quarterly loss since going public nine years ago as plunging values of stocks, debt and real estate caught up with a Wall Street leader that until recently had sidestepped the worst of the crisis.
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GMAC gets closer to becoming a commercial bank - yawn
When did it become critical that people can buy a new car every year? I am just astonished that we are letting a car financing unit become a bank just so they can get access to our taxpayer funds. Mainstreet has been left in the cold and all we seem to care about is all the fat cats that did not make prudent choices to retain money for the bad times that always come. What direction are we trying to go, backwards or forwards?
News:
GMAC LLC investors holding about $10.5 billion of bonds agreed to sweetened terms of a debt swap, bringing the auto and home lender closer to its goal of becoming a bank and getting a federal bailout.
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GMAC hasn’t met conditions to convert to commercial bank status
The Fed’s actions in the treasury market is really sucking out much of the extra liquidity out of the market as people are using it as a flight to safety in these uncertain times. It is no surprise that the private markets could not come up with the $30 billion needed to give GMAC the capital they needed to met their obligation under commercial bank status.
News:
GMAC LLC, the auto and home lender seeking federal aid, hasn’t obtained enough capital to become a bank holding company and may abandon the effort, casting new doubt on the firm’s ability to survive.
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GMAC applies for status as commercial bank and begins debt swap
GMAC has applied for status as a bank holding company so it can get access to the Treasury’s $700 billion rescue fund for the financial industry.
The lender also began an exchange offer for $38 billion of notes issued by the company and its Residential Capital LLC home lending unit to reduce outstanding debt levels, Detroit-based GMAC said today in a statement.
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American Express (Amex) gets Fed approval to convert to commercial bank
Looks like consumer debt is now good paper to get Fed loans. The credit card issuing company is now converting into a commercial bank holding company to get access to the discount window. My questions is how are they going to pay back the Federal Reserve if borrowers continue to default and the securitization market does not return? This is the first step for us to start monetizing consumer debts that will most likely be inflationary unless they can pay these loans off. We are still heading down this slippery slope and at this point it looks like we are determined to inflate our way out of this crisis, which does not look good for people who have savings in dollars.
News:
American Express Co. won Federal Reserve approval to convert to a commercial bank. The Fed waived the normal 30-day waiting period on the application “in light of the unusual and exigent circumstances affecting the financial markets,” the central bank said in a statement in Washington. Chairman Ben S. Bernanke and his colleagues unanimously voted for the action.
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Goldman Sachs and JPMorgan to Become Commercial Bank Holding Companies
It is true when they say this changes the face of Wall Street. In the NY Times article they mentioned the leverage both banks carry is twice what the major commercial banks are, it will be interesting to see what they do to bring this down and what regulation is in place for this and how it will affect their compliance or if the New York regulators even care? What I do love is the mention that with access to the Fed’s discount window, they will now have “permanent liquidity”. I guess it really does not matter if you make bad decisions in the U.S. financial sector, you are now basically rewarded by getting whatever capital is needed to stay afloat.
News Piece:
Goldman Sachs and Morgan Stanley, the last two independent investment banks, will become bank holding companies, the Federal Reserve said Sunday night, a move that will fundamentally alter the landscape of Wall Street.
The move alters one of the models of modern Wall Street, the independent investment bank, soon after the federal government unveiled the biggest market intervention since the New Deal. It heralds new regulations and supervision of previously lightly regulated investment banks, as well as an end to the outsize paychecks that helped shape the image of the chest-thumping Wall Street banker.
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