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

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

Fundamentally insolvent

Marshall Auerback here. Equity investors, perhaps unlike credit investors, don’t get the fundamental insolvency of the financial sector, an artifact of mega-leverage. This is a culture that responds to visual clues and marketing jingles. Substance is at best a second thought, and seriously, there is not time in these markets for second thoughts. It’s all

Ameribank: the latest FDIC bankruptcy takeover

Today, after the markets closed, in another Friday Night Special, the FDIC announced the failure of Ameribank. This represents the 12th bank failure this year and the 14th since the credit crisis began last August. See my list of Bankrupt global financial institutions for major bankruptcies and my Credit Crisis Timeline for all bank writedown

Disappearance of capital sources is true cause of Lehman failure and AIG rescue

Why did Lehman really fail? The equity window is effectively closed for most financial services companies. This fact was the true trigger for the meltdown in AIG and Lehman and the problems at WaMu, HBOS and Merrill Lynch.

Moreover, it will be the trigger for a lot of the financial services bankruptcies going forward

Chart of the day: the largest bankruptcies in US history

The bankruptcy of Lehman Brothers, with assets of over $600 billion is the largest in U.S. history. Wikipedia has catalogued the list of the largest U.S. bankruptcies of all time. (Hat tip: Börsennotizbuch) Drum roll, please. The current Bankruptcy Code was enacted in 1978 by § 101 of the Bankruptcy Reform Act of 1978[34], and

AIG: a short post-mortem

The meltdown of the world’s largest insurer AIG (AIG) makes the stakes of this credit crisis plain to all. In my view, the AIG situation and the subsequent turmoil in financial markets could have been avoided. The markets were clearly on edge at this time last week. However, Hank Paulson and Ben Bernanke, worried about

Dick Fuld feels horrible about Lehman collapse

Dick Fuld, the Chief Executive of the beleaguered and now bankrupt investment bank Lehman Brothers, finally addressed staff after the worlds largest bankruptcy in history. He told staff he felt horrible for their personal and financial loss. Below is Bloomberg’s summary of the event. Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld told the

Desperate Housewives – UK style

Update 04 Mar 2009: Marshall Auerback sent me a story about Dresdner bankers suing to get tens of millons in bonuses. Obviously the house in Kent and the private clubs and schools have to be paid for. His story here reminded me of this article which I am re-posting.

The headline of an article in the Times of London caught my eye this morning. It read: After Lehman Brothers: desperate City wives. The article makes for interesting reading. People who used to live in the lap of luxury go from gazillionaire to being penniless overnight as their entire net worth is wiped out.

Love them or hate them, investment bankers are taking a shock to the system

Why Lehman failed

It’s been bothering me for some time — the fact that Lehman failed and Merrill was taken out at a deal time value that was a significant premium to both book value and the prevailing price of its shares in the market. It seems rather unfair. You’ve got Lehman on the one side, swept into

Barclays gets “core Lehman” assets

It’s done. Core Lehman is sold. Now the rest of the company can be liquidated. Barclays will buy the core assets for a measly $2 billion. For Lehman staff in the US, this has to be a relief. However, staff in London are probably left out in the cold as Barclays sees this operation as