Lehman Bros files for bankruptcy

[Mohsin]

Lehman Bros files for bankruptcy


The fourth-largest investment bank in the US, Lehman Brothers, has said it will file for bankruptcy protection, amid a growing global financial crisis.

Lehman had incurred losses of billions of dollars in the US mortgage market.
The move threatens to deal a further blow to the global financial system, as banks unwind their deals with Lehman.

Merrill Lynch, also stung by the credit crunch, has agreed to be taken over by Bank of America in a dramatic weekend of events for Wall Street.

Stock markets in Asia opened sharply lower and the dollar tumbled against the euro and the yen as Lehman's failure raised fears about the strength of the global financial system.

European markets and Wall Street are also expected to open lower in what is likely to be a tense day of trading.

The chance that Lehman Brothers could collapse increased sharply after the strongest potential buyers pulled out at the weekend.

Barclays and Bank of America had been in talks to rescue the bank.

Greg Wood, the BBC's North America business correspondent, said that police had cordoned off the bank's headquarters in New York and staff were leaving with cardboard boxes as onlookers gathered to watch the bank's demise.
The bank employs about 25,000 staff worldwide, including 5000 in the UK.

'Extraordinary 24 hours'
Lehman Brothers said it intended to file for Chapter 11 bankruptcy protection, which allows a company time to reorganise and devise a plan to pay creditors over time.

It said that its broker-dealer division and asset management division Neuberger Berman Holdings would not be included in the filing.

Bank of America said it had agreed to buy investment bank Merrill Lynch for $50bn, in a deal that will create the world's largest financial services company.

The BBC's business editor, Robert Peston, said that it had been Wall Street's most extraordinary 24 hours since the late 1920s. He said that Merrill's sale was almost as shocking as Lehman's demise. "The global financial economy has never in recent years been tested by quite such a combination of accidents and jolts to confidence," he said.

 

[Abel213]

:salam2:

History has been made, this is once in a life time event. It's not just Lehman, but all of the other banks that are going to drop like dominoes. The Fed saved Fannie Mae and Freddie Mac, Bank of America saved Merril Lynch, JP Morgan saved Bear Sterns. Only Goldman Sachs is left to save a bank. May Allah save us Muslims saved from the upcoming economic bust, Amin.

 

[Mohsin]

:salam2: brother

Riba is the foundation of modern economy and sooner or later its ugly consequences materialize. The only way for any economy to be sound is to be interest free with money 100% backed by gold. But who's listening?

Very true indeed. I too was thinking of this ayah from Surat al-Baqarah when I read this. Its becoming a reality in our days.

Allâh will destroy Ribâ (usury) and will give increase for Sadaqât (deeds of charity, alms, etc.) And Allâh likes not the disbelievers, sinners. (276)

 

[TheHumbleWun]

Salaam,

Inshallah the Federal Reserve will collapse as a result of all this and the hands of sound money will finally be in the hands of the government not a private central bank!

Brother Taxhonesty made a valid point in the thread How the Federal Reserve Fooled Americans in that gold only works for a small population. Since gold is a scarce material, it can lead it do genocides and wars. The hands of the money supply needs to be controlled by the government.

“It is the well enough that the people of the nation do not understand our banking & monetary system, for if they did, I believe there would be revolution before tomorrow morning” Henry Ford

"Mr. Chairman, we have in this Country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the Government of these United States and the people of the United States out of enough money to pay the Nation's debt." Congressman Louis T. McFadden, 1933-34

 

[Mohsin]

:salam2:

Frantic day on Wall Street as banks fall

In one of the most dramatic two days in Wall Street's history, Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for Chapter 11 bankruptcy protection.

The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of tens of billions of dollars in losses because of bad mortgage finance and real estate investments.

They culminated a weekend of frantic around-the-clock negotiations, as Wall Street bankers huddled in meetings at the behest of Bush administration officials to try to avoid a downward spiral in the markets stemming from a crisis of confidence.

"My goodness. I've been in the business 35 years, and these are the most extraordinary events I've ever seen," said Peter Peterson, co-founder of the private equity firm the Blackstone Group, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration.

More ...

Insurer AIG seeks $40 billion as portfolio plummets

The big insurance company, the American International Group, sought a $40 billion bridge loan Sunday from the U.S. Federal Reserve, as it faced a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said.

Ratings agencies threatened to downgrade the insurance giant's credit rating by Monday morning in New York, allowing counterparties to withdraw capital from their contracts with the company. One person close to the firm said that if such an event occurred, AIG may survive for only 48 hours to 72 hours.

More ...

 

[TheHumbleWun]

Salaam,

We're seeing a ripple effect similar to the ones in 1930s Depression era. I wouldn't be suprised if investors start to take to their money out of the banks soon.

 

[Abel213]

ding dong ding

the witch is dead

AIG was bailed out and everyone said it would rally today... Dow plummets 440 points.

Expect a monkey rally soon, followed by massive declines.

 

[Mohsin]

Lloyds TSB unveils HBOS takeover

http://news.bbc.co.uk/2/hi/business/7622380.stm

 

[Khalil2u]

Pissed in USA

Riba is a sin. Allah makes those who sin pay today or tomorrow. I don't think that they have paid yet. The US government has bailed out almost all of these companies. They have left these companies with millions in their pockets at the expense of poor American people like me. I can barely afford food and the government won't even give me a $ in food stamps. However they give these rich fat cats billions of dollars. They did this so that they can do business as usual. The riba system rules in this country. America is 10% rich and 90% poor just like most other countries. May Allah bless us and protect us from these crooks. As far as gold is concerned The people of Africa and India break their backs to get gold diamonds and other raw materials. They don't see the billions of dollars spent and invested on these things so it's still riba. People make a dollar a day maybe even less to risk their lives. Then these items are sold for hundreds of $$ more. Gold is now $925 dollars an ounce the man who found it made a dollar to find it. Riba. Do not invest your money into any of these things. When you make your money spend it to live and spend it in the way of Allah SWT.

 

[TheHumbleWun]

Salaam,

What does the bailout mean for the rest of the Americans? Since the loan was given by the Federal Reserve (private institution), it means more debt by the Government, thus we the people (who had nothing to do with AIG business operations) end up paying more taxes to cover for the interest of the loan the Government gave to AIG. Financing the war in Iraq & Afghanistan works the same way. This is total corruption.

The Federal Reserve controls both the money supply & interest rates for the country. This is audit deficiency, there is no segregation of duties. This is why the Federal Reserve is never allowed to get audited.

 

[Mohsin]

Paulson: Rescue to cost ‘hundreds of billions’

Treasury Secretary Paulson on Friday sketched out a multi-faceted effort to confront the worst U.S. financial crisis in decades, outlining a program that could cost taxpayers ‘hundreds of billions.’

WASHINGTON - The Bush administration sketched out a multi-faceted effort on Friday to confront the worst U.S. financial crisis in decades, outlining a program that could cost taxpayers hundreds of billions of dollars to buy up bad mortgages and other toxic debt that has unhinged Wall Street.
President Bush, flanked by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, acknowledged that the program will put a "significant amount of taxpayers' money on the line."

The federal government already has pledged more than $600 billion in the past year to bail out, or help bail out, some of the biggest names in American finance.

More ...

P.S. Brother Humblewun's and Taxhonesty's comment will be highly appreciated.

 

[Aapa]

Salaam,

Thomas Jefferson warned the newly formed States. 1913. And they sold America. And they made Americans stupid.
So the few families have made their quadzillions. It is all a high stake game. It has nothing to do with us. We are the working poor.
I make enough money to pay the bills and if I am lucky to buy an item or two. I attended one of the most exlucsive colleges in the US. It is all a joke. The poor are kept poor and drugged. The young are sent to prison or enlist in the armed forces.

Congress is in bed with the zionists. And everybody is happy to reach for the remote control..it takes away the truth.

 

[Abel213]

:salam2:

Salaam,

What does the bailout mean for the rest of the Americans? Since the loan was given by the Federal Reserve (private institution), it means more debt by the Government, thus we the people (who had nothing to do with AIG business operations) end up paying more taxes to cover for the interest of the loan the Government gave to AIG. Financing the war in Iraq & Afghanistan works the same way. This is total corruption.

The Federal Reserve controls both the money supply & interest rates for the country. This is audit deficiency, there is no segregation of duties. This is why the Federal Reserve is never allowed to get audited.

THis man can explain it much better than me:

http://www.youtube.com/watch?v=kqtAzRNhTTY&eurl=http://market-ticker.denninger.net/archives/P2.html

Basically, your dollar will be worth less than the wood its printed on

 

[TheHumbleWun]

Salaam,

Prior to the inception of the Federal Reserve in 1913, there was no income tax. The cost of printing money is miniscule. The cost to the taxpayers is a burden, because they're stealing our money for their own use! Highway robbery!

The more debt the government incurs could eventually mean very little or no social security income or government programs for the future generations of today. Paying higher taxes to pay the increased debt will mean no money to save for social security, thus leading to bankruptcy. These bailouts are not the interest of Americans but of the Federal Reserve!

Furthermore, according to Article 1 Section 8 only Congress has the power to coin money, regulate the Value thereof, NOT the Federal Reserve. Also, according to Article 1 Section 10 paper money is unconstitutional because only gold and silver coin are suppose to be legal tender.

Congressman, Louis T. McFadden, 1933 case has still been unresolved and acted upon by the Judiciary Committee. McFadden brought formal charges against the Federal Reserve for numerous criminal acts, including but not limited to, conspiracy, fraud, unlawful conversion, and treason.

The Federal Reserve is responsible for all the wars since it's inception. All the killings. Since they finance the wars, it becomes a game to them, they just play with the pawns as they please. These criminals (Bush, Paulson, Bernanke, etc) need to be brought to justice for all the ransacks they've cause on humanity. The likes of congressman Ron Paul don't come around too often to bash the FR.

 

[Mohsin]

:salam2:

Washington Mutual collapse 'biggest in US history'

The lender's assets have been sold to JPMorgan. (Reuters: Lucas Jackson)
The financial turmoil in the United States has claimed another institution in what is being called the biggest banking failure in American history.
US regulators have seized Washington Mutual and sold some of its assets to JPMorgan for nearly $2 billion.

The seizure and sale is the latest historic step in US government attempts to clean up a banking industry littered with toxic mortgage debt.
ANZ's chief economist, Saul Eslake, says the bank was deemed unsound after its customers withdrew billions of dollars worth of deposits.

"Washington Mutual had deposits of around $35 billion, having lost $53 billion of deposits since June and $17 billion in the last two weeks,"
"The previous biggest failure in US banking history was Continental Illinios back in 1984 which had deposits of just $40 billion."

Mr Eslake says the US Treasury's proposed rescue plan is aimed at Wall Street investment banks, and it is unlikely it would have saved Washington Mutual.

"Washington Mutual's problem was that it was like some of the non-trade lenders in Australia, that it had become increasingly dependent on wholesale funding to finance the acquisition of loans that were increasingly going bad and it was in grave danger of collapsing," he said.
- ABC/Reuters

 

[Mohsin]

Talks Implode During Day of Chaos; Fate of Bailout Plan Remains Unresolved

WASHINGTON — The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.

“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.
It was an implosion that spilled out from behind closed doors into public view in a way rarely seen in Washington.

By 10:30 p.m., after another round of talks, Congressional negotiators gave up for the night and said they would try again on Friday. Left uncertain was the fate of the bailout, which the White House says is urgently needed to fix broken financial and credit markets, as well as whether the first presidential debate would go forward as planned Friday night in Mississippi.

When Congressional leaders and Senators John McCain and Barack Obama, the two major party presidential candidates, trooped to the White House on Thursday afternoon, most signs pointed toward a bipartisan agreement on a grand compromise that could be accepted by all sides and signed into law by the weekend. It was intended to pump billions of dollars into the financial system, restoring liquidity and keeping credit flowing to businesses and consumers.

“We’re in a serious economic crisis,” Mr. Bush told reporters as the meeting began shortly before 4 p.m. in the Cabinet Room, adding, “My hope is we can reach an agreement very shortly.”
But once the doors closed, the smooth-talking House Republican leader, John A. Boehner of Ohio, surprised many in the room by declaring that his caucus could not support the plan to allow the government to buy distressed mortgage assets from ailing financial companies.

Mr. Boehner pressed an alternative that involved a smaller role for the government, and Mr. McCain, whose support of the deal is critical if fellow Republicans are to sign on, declined to take a stand.

The talks broke up in angry recriminations, according to accounts provided by a participant and others who were briefed on the session, and were followed by dueling news conferences and interviews rife with partisan finger-pointing.
In the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”
Mr. Paulson sighed. “I know. I know.”
It was the very outcome the White House had said it intended to avoid, with partisan presidential politics appearing to trample what had been exceedingly delicate Congressional negotiations.

Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Senate banking committee, denounced the session as “a rescue plan for John McCain,” and proclaimed it a waste of precious hours that could have been spent negotiating.

But a top aide to Mr. Boehner said it was Democrats who had done the political posturing. The aide, Kevin Smith, said Republicans revolted, in part, because they were chafing at what they saw as an attempt by Democrats to jam through an agreement on the bailout early Thursday and deny Mr. McCain an opportunity to participate in the agreement.

The day seemed to hold promise as it began. On Wednesday night, Mr. Bush had delivered a prime-time televised address to the nation, warning that “our country could experience a long and painful recession” if lawmakers did not act quickly to pass a huge Wall Street bailout plan.

After spending Thursday morning behind closed doors, senior lawmakers from both parties emerged shortly before 1 p.m. in the ornate painted corridors on the first floor of the Capitol to herald their agreement on the broad outlines of a deal.

They said the legislation, which would authorize unprecedented government intervention to buy distressed debt from private firms, would include limits on pay packages for executives of some firms that seek assistance and a mechanism for the government to take an equity stake in some of the firms, so taxpayers have a chance to profit if the bailout plan works.

“I now expect we will indeed have a plan that can pass the House, pass the Senate, be signed by the president, and bring a sense of certainty to this crisis that is still roiling in the markets,” said Robert F. Bennett, Republican of Utah, a member of the banking committee.

More ...

 

[TheHumbleWun]

Anyone can ask for Bailout money now!

Salaam,

This is not the first time the U.S. goverment has given a bailout. The Yazoo land fraud incident in 1813 where Congress compensated Yazoo investors with $8 million public funds was one.

In the 1980's U.S. government also bailed out Chrysler. Currently, this $700 billion loan includes $25 billion for Detroit automakers. Over the past few years, the U.S. auto industry has been hurt. I won't be suprised if they ask for more moolah ($$) next year.

This bailout could mean that other industries will make efforts to lobby for their own handouts.

The question that the media avoid asking is what people are trying to be safe from? The answer should be obvious to anyone who has been reading about the junk mortgage problem. Investors – especially in Germany, whose banks have been badly burned – are seeking to be safe from fraud and misrepresentation. U.S. banks and firms have lost the trust of large institutional investors here and abroad, because of year after year of misrepresentation as to the quality of the mortgages and other debts they were selling. This is Enron-style accounting with an exclamation point – fraud on an unparalleled scale.

The moral is that there is a great danger in having a Treasury Secretary represent insider financial interests rather than the national interest.

Readings:

Gustavus Myers’ History of the Great American Fortunes. Details on frauds that have shaped American history. The moral is that great gifts to insiders have effects that will last centuries. That is what is being threatened today with Mr. Paulson’s “clean” giveaway to his Wall Street clients.

 

[Aapa]

Salaam,

So we should not pay taxes.

 

[Mohsin]

Salaam,

So we should not pay taxes.

Yep, let the Titanic sink alone, it will be best to stay at the shore and watch the fireworks.

 

[TheHumbleWun]

Salaam,

That's what Ron Paul asked for. Look where it got him. He wanted to abolish the IRS.

Many people have used the 16th Amendment because the income tax violates other provisoins in the Constitution. Some even use the 1st Amendment "freedom of religion" as an excuse. We don't believe in it because it's part of my religion.

It has been challenged many times, but they set laws that no matter what you have to pay or be sent to prison. One ways to avoid is becoming a hermit and hiding in the caves of Colorado or having a honest person and system and getting rid of it.

Wesley Snipes is in jail for 3 years for tax evasion!

Sooner or later, the system will collapse. It's headed towards it. Allah is the Best of Planners.