Debtmatters Share Discussion Threads

[mrphil] 22/9/2008 13:38

sponges - I take it you mean the LMH offer in which case as it isn't a rights issue, if you don't take up the offer it just lapses. Personally, I won't be bothering to take up the offer and if you are thinking of doing so you should look at the current share price as you could possibly buy them at no more than that price on the open market.

[giant steps] 20/9/2008 20:31

20th Sep 2008



Treasury Seeks Authority to Buy $700 Billon in Assets

Extract

'
The U.S. Treasury today asked Congress for authority to buy as much as $700 billion in soured mortgage-related assets from the nation's financial institutions in the most far-reaching federal intrusion into markets since the Great Depression.

The legislation is aimed at ending a yearlong crisis that toppled four financial giants, forced two into mergers and has brought credit markets to the brink of paralysis. It would give Treasury Secretary Henry Paulson sweeping power to hire managers and award contracts to private companies without review by courts or government agencies.

``It sounds like Paulson is asking to be a financial dictator, for a limited period of time,'' said historian John Steele Gordon, author of ``Hamilton's Blessing,'' a chronicle of the national debt. ``This is a much-needed declaration of power for the Treasury secretary. We can't wait until the next administration in January.''

Paulson is seeking authority to step in as buyer of last resort for mortgage-linked assets that few other financial institutions in the world want to buy, following government takeovers of mortgage giants Fannie Mae and Freddie Mac and insurer American International Group Inc. Congressional Democrats, including House Financial Services Committee Chairman Barney Frank, have already indicated they will use the legislation as a vehicle to help homeowners avoid default.

``We're going to be buying up a lot of mortgage paper,'' Frank, a Massachusetts Democrat, said yesterday. ``Between Fannie Mae and Freddie now owned by the federal government and the mortgage paper we'll be acquiring here'' and the Federal Deposit Insurance Corp. running failed bank IndyMac Bancorp Inc., ``we should now be able substantially to reduce foreclosures,'' he said.

`Common Understanding'

President George W. Bush said he called leaders in both houses of Congress and ``found a common understanding of how severe the problem is and how necessary it is to get something done quickly.''

``This is going to be a big package because it's a big problem,'' Bush said following a meeting with Colombian president Alvaro Uribe at the White House. ``We need to get this done quickly, and the cleaner the better.''

Democratic Presidential nominee Barack Obama said in a radio address that he ``fully supports'' Paulson and Federal Reserve Chairman Ben S. Bernanke's efforts to stabilize the financial system. The plan, however, should benefit both main street and Wall Street, he said.

Republican Presidential nominee John McCain ``looks forward'' to reviewing the proposal while focusing at least in part on ``minimizing the burden on the taxpayer,'' said Jill Hazelbaker, communications director for the McCain campaign.

Debt Ceiling

The proposal would raise the nation's debt ceiling to $11.315 trillion from $10.615 and require the Treasury secretary to report back to Congress three months after Treasury first uses its new powers, and then semiannually after that.

Paulson would gain discretion to act as he ``deems necessary'' to hire people, enter into contracts and issue regulations related to a revival of U.S. mortgage finance, according to a three-page proposal. The Treasury would be required to simultaneously promote market stability and protect the taxpayer.

The Treasury plans to hire managers to purchase the assets through so-called reverse auctions, seeking the lowest prices, a person briefed on the proposal said yesterday. The document specifies that Treasury may buy only assets from U.S.-based financial institutions issued or originated on or before Sept. 17.

`Clear Abdication'

The proposal is ``a clear abdication of all oversight and fiscal authorities to a Secretary of Treasury that has bungled this crisis from the beginning,'' said Joshua Rosner, an analyst at the independent research firm Graham Fisher & Co. in New York. ``This is Marxism. And I mean Groucho not Karl.''

The House will pass legislation to implement the plan by the end of next week, and the Senate will act soon after, Frank said yesterday in an interview on Bloomberg Television's ``Political Capital with Al Hunt.''

Still, lawmakers are likely to use the emergency plan as a vehicle for advancing their other priorities.

The proposal would probably include a ``second stimulus'' plan with infrastructure funds, low-income energy aid and Medicaid assistance, Frank said. Congress will begin weighing broad regulation of hedge funds, private-equity firms and investment banks when it reconvenes next year, he said.

`Irresponsible Borrowers'

``We must ensure that the solution we design doesn't reward particular companies, or irresponsible borrowers or lenders, or CEOs, some of whom helped cause this mess,'' he said.

Still, some lawmakers have expressed doubts about the risk and cost.

U.S. Representative Jeb Hensarling of Texas said yesterday, before the plan was distributed, that ``I remain skeptical, fearful, and unconvinced that this is the proper remedy for our nation at this time.''

Bush today said he's unconcerned that the price tag on the package may seem high.

``I'm sure there are some of my friends out there that are saying, I thought this guy was a market guy, what happened to him,'' the president said. ``My first instinct was to let the market work, until I realized, while being briefed by the experts, how significant this problem became.''

Bush said the financial crisis is putting ``hundreds of billions of dollars at risk,'' but ``over time, we're going to get a lot of the money back.''

'

[sponges] 20/9/2008 14:54

Can I ask - what normally happens in these cases if you decide NOT to take up the 24 to 1 offer ? thanks

[giant steps] 18/9/2008 22:59

September 18, 2008
Bank of China buys into Rothschild

"
Bank of China took a stake in a branch of the celebrated Rothschild banking dynasty on Thursday, but ruled out a white-knight rescue of crisis-torn institutions in New York or London.

In a deal pitched loftily above the global turmoil engulfing financial markers, the Chinese bank said it would acquire 20 per cent of La Compagnie Financiere Edmond de Rothschild, one of Europe's few remaining independent merchant banks.
"

[giant steps] 18/9/2008 20:39

18th Sept 2008



Extract
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LONDON (AFP) - Britain said Thursday it will bar short-selling -- when investors borrow company stock to sell it -- in financial shares and warned it could extend the ban to other sectors in order to steady the markets.

"While we still regard short-selling as a legitimate investment technique in normal market conditions, the current extreme circumstances have given rise to disorderly markets," FSA chief executive Hector Sants said in a statement.

"As a result, we have taken this decisive action, after careful consideration, to protect the fundamental integrity and quality of markets and to guard against further instability in the financial sector."

"The FSA stands ready to extend this approach to other sectors if it judges it to be necessary," it added.

The short-selling ban comes into effect at midnight (2300 GMT).

The FSA will also require all investors holding short positions totalling more than 0.25 percent of a financial company's total shares to disclose details of those positions from Tuesday.
'

[mrphil] 18/9/2008 12:25

Must admit I reckon they have a damn cheek after all they have put us through over the past couple of years. My holding currently worth £10.50 against original buy price of £4.5K so I don't think they'll be getting more from me!

[giant steps] 17/9/2008 22:54

September 17, 2008
Barclays pays £1bn for Lehman's US investment arm

Extract

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Barclays has bought Lehman Brothers' US investment banking and capital markets businesses for $1.7 billion (£952 million), in the first of several sales of the collapsed bank's businesses.
"

[giant steps] 17/9/2008 22:51

HBOS reaches merger deal with Lloyds TSB

September 18, 2008 - 7:08AM



"
HBOS, Britain's biggest mortgage lender, has reached a deal to merge with its rival Lloyds TSB, media reports say, after the lender's shares plummeted for a third day running.

HBOS had confirmed it was in "advanced talks" with Lloyds TSB, and the BBC and Sky News later reported that a deal had been struck, saying an announcement was expected early Thursday. Neither bank was available for comment.

The BBC said Lloyds TSB would be paying 232 pence a share for HBOS in a merger that would create a British retail banking giant.
"

[giant steps] 17/9/2008 19:45

HBOS may be acquired by Lloyds TSB
September 17, 2008



"
HBOS, the biggest British mortgage lender, was close to being acquired by Lloyds TSB Group on Wednesday after its shares slumped on fears that it may not survive the combination of financial market turmoil and a weakening global economy.

Lloyds, a bank based in London that is looking for ways to expand its mortgage business, sees buying HBOS as a way to profit from the falling valuations of financial services firms. HBOS has lost about 43 percent of its market value over the past month and its shares are now worth £7.7 billion, or $14 billion. Lloyds may pay about £2.80 for each HBOS share, the BBC reported, for a total value of £15 billion. HBOS shares fell 19 percent to close at £1.47 in London on Wednesday. However, the shares had been off as much as 52 percent earlier in the day, before Lloyds made known its interest.
"

[hosede] 17/9/2008 15:05

Not for me I don't think!

[giant steps] 17/9/2008 08:07

17th Sep 2008



MASSIVE BAILOUT FOR AIG

Extract
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In a scramble to avert what would have been the biggest casualty of the credit crisis to date, the U. S. government last night agreed to sweep in and bail out global insurance giant American International Group (AIG).

The dramatic U-turn puts AIG in the government's control in exchange for an emergency loan after the group at the heart of the financial system failed in a drive to raise about US$85-billion from a private consortium, according to people familiar with the deal.
"

[tevezunited] 16/9/2008 18:43

1.2m required they directors should loan it themselves instead of going to us lot for a 1/24 raising just to pay of bloody debts OR go to the chairman who bagged a packet at what was it 326p 3 years ago...a few million nicely done by Jez at the time. want to keep it going put your hand in your pockets

[giant steps] 16/9/2008 13:44

Tue 16 Sep 2008



Last men standing - Goldman Sachs and Morgan Stanley face questions

"
As the only two independent Wall Street brokerages standing, Goldman Sachs and Morgan Stanley will face a barrage of questions at their third quarter announcements this week.

Some experts believe that, in a climate of panic in which clients, trading partners and lenders are becoming increasingly wary of brokerages, it is only a matter of time before the two groups melt down or are snapped up.
"

[mrphil] 16/9/2008 07:51

Anyone have any thoughts on the LMH offer?

[giant steps] 15/9/2008 19:56

15th Sep 2008



New York Governor Says AIG Can Access $20 Billion

"
American International Group Inc., the largest U.S. insurer by assets, has been given special permission to access $20 billion of capital in its subsidiaries to free up liquidity, New York Governor David Paterson said.

The move buys AIG time to negotiate for a loan from the Federal Reserve, Paterson said today at a New York City press conference. AIG fell 46 percent today in New York trading after a 31 percent slide Sept. 12.

Chief Executive Officer Robert Willumstad is racing to raise cash to forestall credit-rating downgrades on further writedowns tied to derivative contracts backing $57.8 billion in subprime mortgage securities. New York-based AIG may need to raise $20 billion in capital and sell $20 billion of assets, people familiar with the insurer's plans said. AIG's prospects dimmed today when Lehman Brothers Holdings Inc. sought bankruptcy protection after failing to find new funds or a buyer.
"

[giant steps] 15/9/2008 19:12

Mon 15th Sept 2008



"
Shares in American International Group plummeted more than 50 percent Monday on fears the US insurance giant could be the next domino to fall in the worst banking crisis to shake Wall Street since the Great Depression.

AIG, saddled with toxic mortgage-backed derivatives and facing the imminent threat of a ratings downgrade, has reportedly turned to the US Federal Reserve for 40 billion dollars in bridge financing, according to the New York Times.
"

[giant steps] 15/9/2008 08:22

Mon 15th Sept 2008



Crisis on Wall Street as Lehman Totters,
Merrill Is Sold, AIG Seeks to Raise Cash

"
The American financial system was shaken to its core on Sunday. Lehman Brothers Holdings Inc. said it would file for bankruptcy protection, and Merrill Lynch & Co. agreed to be sold to Bank of America Corp.

The U.S. government, which bailed out Fannie Mae and Freddie Mac a week ago and orchestrated the sale of Bear Stearns Cos. to J.P. Morgan Chase & Co. in March, played much tougher with Lehman. It refused to provide a financial backstop to potential buyers. Without such support, Barclays PLC and Bank of America, the two most interested buyers, walked away. Late Sunday night, Lehman said it intends to file for protection under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York.
"

[giant steps] 15/9/2008 08:19

Mon 15th Sept 2008
U.S. bank giant Lehman to file for bankruptcy



"
After enduring one of the most dramatic days in its history, Wall Street received a
climactic jolt Monday when Lehman Brothers, a 158-year-old investment bank
undermined by bad bets on real estate, said it will file for bankruptcy.
"

[giant steps] 09/9/2008 15:46

ABC NEWS Business Unit
Sept. 9, 2008



First Bear, Then Fannie and Freddie... Is Lehman Next?

[giant steps] 07/9/2008 17:46

From Times Online
September 7, 2008
US government seizes control of Fannie Mae and Freddie Mac

[giant steps] 12/7/2008 20:06

12th July 2008


Extract

Federally-seized IndyMac Bank was due to reopen Monday after suffering one of the biggest bank closures in US history, as the troubled US mortgage industry struggles to stem further meltdown.

The regulatory Office of Thrift Supervision (OTS) announced Friday it had placed the California-based bank, worth an estimated 32 billion dollars, under the control of the Federal Deposit Insurance Corporation (FDIC).