The investment bank Merrill Lynch emerged as one of the worst-hit victims from the summer’s credit meltdown as it revealed that losses of $5.5bn on mortgages and bad loans would push it into the red for the first time in six years.
Merrill Lynch joins only UBS among global investment banks suffering an overall loss from the summer’s credit crunch although others, including Bear Stearns and Morgan Stanley, have suffered sharp deterioration in their profits.
While US lawmakers somehow managed to “overlook” placing any regulations on sub-prime sleaze – not even requiring licensing for storefront mortgage lenders – the highly-regulated banking and investment sector has no one overseeing stupidity and greed.
Looks like they learned nothing from their fuckups in 2002.
Probably should change the book title to “Dick the bank – boy!”
Dick the bank boy, before he dicks you.
I think this will be continuing for a good two years. Lots of people will be defaulting on their loans, and it will result in a general credit crunch affecting everybody. With the amount of money they could be talking about, the economy is going to take a huge hit.
Defaulting loans takes money out of the economy, causing a recession. If the governement – FRB steps in with relief, we could see a run on the dollar and hyperinflation.
#1
“Looks like they learned nothing from their fuckups in 2002.”
It takes a higher level of education to commit a newer act of stupidity, looks to me that their MBAs are useless right now…
I would love to know the timeline of when they knew this was going down. These co’s sit on this info till they are almost forced to reveal the sordid truth. Just to be a fly on the wall in the board room probably 3 months ago when they cynically planned this come clean press announcement down the road..
I wonder if they are backing BUSH..
“the highly-regulated banking and investment sector has no one overseeing stupidity and greed.” So once again government regulation imposes costs and yields no gains. The invisible hand dealing out 5.5 billion worth of costs is as effective, if not more effective, than some special interest ridden government oversight body.
#22 Ferengi Rule: A wise man can hear profit in the wind.
While everyone bitched and moaned about the short-term credit hick-up, and after reading last week’s report in the Economist magazine I’m convinced the credit crunch is exactly that, a smart investor would have heard opportunity on the winds of the Great Material Continuum. Buying shares of the major banks, such as DB, GS, MS, BSC, when they were getting beat up was a great way to get some fast money. Goldman Sachs bbbbooooya skee daddy! Even Citigroup and Merril Lynch were solid long run investments. Hell running any kind of volatility measurement would have shown which stocks were unduly abused.
#4- “Defaulting loans takes money out of the economy, causing a recession.” Some money is taken out of the system, enough to trigger a recession, you’ll have to show me you stat analysis, or a relevant case study, to be convincing.
Yea hyperinflation heading this way. Read Benny’s “Inflation Targeting: Lessons from the International Experience,” and you’ll find out why his ideology will prevent double digit inflation, let alone hyperinflation.
Why should this so-called ‘sleaze’ be regulated? I guess you object to giving out loans to poor minorities. The only thing that I think should be regulated is the politicians who should be kept from bailing out the morons giving out loans.
And now the new pending bankruptcy bills are really upsetting the major lenders.
The legislation “could wreak havoc on the credit markets,” said Jaret Seiberg, an analyst with Stanford Washington Research Group.
http://tinyurl.com/2qkbmg
#8, mxpwr03 — Rule of Acquisition #10 – Greed is eternal. But they messed up with #16, A deal is a deal, especially if Congress is involved. 😉
Where is the property that was behind these loans? Something does not add up. Anytime I had a home loan there was a piece of dirt and a home. Every story I read is like these were personal loans with nothing backing them up?
Yeah, oughta be some cheap houses out there, but from what I see the lenders keep the values up way past worth, even in foreclosures. I guess the runtime is like this: sell the homes to obviously uncredit worthy individuals, get all you can from them before foreclosing, sit on the property for a few years, write off the lost vig, then once the value regains sell them again. Whatever works, I guess.
Owned!!