Lehman gets $2.15 billion for Neuberger Berman

The price tag was less than one would have liked, but these are desperate times for sellers of financial assets. Lehman Brothers secured a sale of its crown jewel investment management division for $2.15 billion in a sale to private equity buyers. When Lehman Brothers first proposed a sale weeks ago while still a solvent

The U.S. financial system is effectively insolvent

I have said before that a systemic response is necessary to deal with the present banking crisis in the United States. This crisis has nothing to do with subprime assets and little to do with things like predatory lending. Those are issues that populists will use to prosecute the scapegoats we are likely to see down the line. The crisis has everything to do with low interest rates, zero regulation and a credit bubble of monumental proportions.

The banking system of the United States is effectively insolvent. Buying up $700 billion in assets is not going to solve this basic fact. A systemic response is needed. If we do not address these issues, we may see significant dead-weight loss as many institutions fail

Citigroup grabs Wachovia on the cheap

Wachovia Corporation has agreed to be bought out by Citigroup in a deal supported by the U.S. government. Exact terms of the deal are still forthcoming, but this could be seen as a best case scenario for a bank which was increasingly under stress due to the global credit crisis. In 2006 Wachovia’s shares changed

Bradford & Bingley may suffer Northern Rock’s fate

Earlier today I highlighted a number of banks that were under severe selling pressure in their respective home markets. This list included Fortis, Macquarie, NCC, Wachovia and CIT. The UK’s Bradford & Bingley is certainly on that list as well. In fact, the British daily “The Telegraph” is openly speculating whether B&B will be nationalized.

Fortis to speed asset sales

The Dutch-Belgian bank Fortis has come under pressure in the aftermath of the WaMu bankruptcy. With the credit markets seized up globally, weaker banks are being attacked regardless of nationality – Wachovia, NCC and CIT Group in the US, Bradford & Bingley in the UK, Macquarie in Australia, and Fortis in Benelux. These are truly

$700 Billion? Try $5 Trilion – So says Marc Faber

Faber thinks that the U.S. needs a lot more money than the Paulson Economic Patriot Act suggests. I agree 100%. His figure is $5 trillion! That’s a lot of dosh. Here is how he is quoted on Bloomberg: “The $700 billion is really nothing,” Faber said in a television interview. “The treasury is just giving

Lehman’s gone, WaMu’s toast, who’s next?

Judging from today’s open on Wall Street, it looks like that’s the question people are asking. Wachovia and NCC are the two companies under the heaviest selling pressure, both down about 20% already at 9:45. Remember that National City is under OCC scrutiny. That is the sort of problem that led to massive deposit withdrawals

JP Morgan Chase buys WaMu out

JP Morgan Chase has taken over the deposit taking subsidiary of Washington Mutual. The transaction is effective immediately, meaning it has closed. This is the biggest deal in FDIC activity yet. Note: I originally heard this story just before 9PM ET and Yves Smith at naked capitalism has her take on the news. Obviously, this

Gateway Bank sold, hurt by Frannie preferreds

When Fannie Mae and Freddie Mac went bust, a number of major players were stung as the value of Fannie and Freddie preferred shares plummeted. Principal amongst these players was Gateway Bank, which had a huge percentage of bank capital tied up in the preferreds. Now Gateway has arranged a takeover by a rival smaller

The Dummy’s Guide to the US Banking Crisis

Whenever I wade into a new topic like digital photography, gardening or what have you, I visit the local bookstore and get a "For Dummies" book to guide me. I figure that it’s the best way to get up-to-speed quickly without actually looking like a dummy. So, for those of you who want the 3-minute

Warren Buffett backs Goldman

By now, you have probably heard that Warren Buffett has made his bet and invested billions of dollars in Goldman Sachs. The market reacted positively and Goldman is now trading at near $133 a share (up 6% on the day). While I do see Buffett’s move as a vote of confidence in Goldman, Buffett does

Danish banking crisis the worst in Europe

The U.S. and the UK are not the only countries suffering from a housing bust and a credit crisis. Ireland and Spain have had massive busts as well and it is only a matter of time before we begin to see effects on the banking sector. And there are many other countries that have seen