US Recession fears & impact on world economy

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Merrill Lynch posts $7.8bn loss
Wall Street banking giant Merrill Lynch has unveiled a huge loss for 2007, crippled by exposure to risky investments in the US housing market.
It made a net loss of $7.8bn (£3.9bn) in the 12 months to the end of December from a net profit of $7.5bn in 2006.

The loss includes a massive $14.1bn write-down on failed investments related to sub-prime mortgages.

Merrill Lynch is the latest big bank to reveal losses related to the crisis in the US mortgage market.

Earlier this week, Citigroup and JP Morgan also announced write-downs because of their exposure to the crisis in the sub-prime loan sector, which focused on consumers with poor or non-existent credit histories.

JP Morgan Chase said its earnings for the last three months of 2007 fell 34%, while Citigroup reported a $9.83bn net loss for the last three months of 2007.

'Unacceptable'

In the last three months of 2007 alone, Merrill chalked up losses of $9.83bn - the biggest quarterly loss in its history.

The previous chief executive, Stan O'Neal, stepped down in October because of the bank's poor performance.


Having lost all that financial capital, the risk for Merrill is that its most valuable human capital - those execs untainted by sub-prime - will flee
Robert Peston BBC Business Editor

New boss John Thain said while the firm's performance was "clearly unacceptable", Merrill had been able to strengthen its balance sheet over the last few weeks.

"I don't think you should anticipate any further problems of this magnitude," Mr Thain said.

"There would have to be something incredibly bad out there to have this happen again, and our whole goal is to get 2007 behind us."

Mr Thain is the former president of Goldman Sachs, one of the few Wall Street firms to have so far come through the sub-prime crisis largely unscathed.

Lifeline

BBC Business Editor Robert Peston said that Merrill has only survived thanks to lifesaving capital from the cash-rich economies of Asia and the Middle East.


MAIN SUB-PRIME LOSSES SO FAR
Citigroup: $18bn
Merrill Lynch: $14.1bn
UBS: $13.5bn
Morgan Stanley $9.4bn
HSBC: $3.4bn
Bear Stearns: $3.2bn
Deutsche Bank: $3.2bn
Bank of America: $3bn
Barclays: $2.6bn
Royal Bank of Scotland: $2.6bn
Freddie Mac: $2bn
JP Morgan Chase: $3.2bn
Credit Suisse: $1bn
Wachovia: $1.1bn
IKB: $2.6bn
Paribas: $197m
Source: Company reports


Merrill Lynch said on Tuesday it had won fresh backing totalling $6.6bn from the Kuwait Investment Authority, the Korean Investment Corporation, a private Saudi Arabian fund and other investors.

Rivals Citigroup, UBS and Morgan Stanley have raised capital from similar sources.

The BBC's business editor said the damage to Merrill was not just financial.

"Having lost all that financial capital, the risk for Merrill is that its most valuable human capital - those executives untainted by sub-prime - will flee," he said.

Widespread woes

Banks are struggling to calculate how much their investments in assets backed by sub-prime mortgages are actually worth, which is why they are reporting massive write-downs.

"It is a shock to the system, they are trying to get as much transparency as possible about their subprime exposure," said Mark Durling at Brewin Dolphin Securities.

"They're being ultra-conservative here."

During the US housing boom, the sub-prime market expanded significantly.

But a series of US interest rate rises over two years meant many sub-prime borrowers could no longer afford their monthly payments, causing them to default on loans.

Banks had packaged up these loans into financial instruments known as collateralised debt obligations and sold them on to investors.

Demand for CDOs dried up as the scale of defaults emerged, leaving banks nursing huge losses.

Merrill was among the largest creators of such securities.

Story from BBC NEWS:
BBC NEWS | Business | Merrill Lynch posts $7.8bn loss

Published: 2008/01/17 19:15:03 GMT

© BBC MMVIII

 

[genmirajborgza786]

Citigroup's $9.8bn sub-prime loss
US banking giant Citigroup has reported a $9.83bn (£5bn) net loss for the last three months of 2007.
Chief executive Vikram Pandit said the loss had been caused by a $18.1bn exposure to bad mortgage debt and was "clearly unacceptable".

The company, the largest banking group in the US, said revenues during the fourth quarter fell 70% from a year earlier to $7.2bn.

Mr Pandit has pledged to turn around Citigroup's fortunes.

'Tight control'

It was also announced that Citigroup is going to get a cash injection of $6.88bn from Singapore government investment agency GIC, while the Kuwait Investment Authority said it had bought a $3bn stake in the firm, as well as a $2bn holding in Merrill Lynch.


CITIGROUP
Citibank was founded in 1812 in New York
It has 200 million customer accounts in 100 countries
More than 300,000 employees
$2.4 trillion in assets
Sources: Citigroup, Reuters

This follows a similar $7.5bn investment in Citigroup from another government agency, the Abu Dhabi Investment Authority, last November.

The firm also said that it would be cutting its dividend for the quarter by 41%, from 54 cents to 32 per share, as well as raising $14.5bn by selling securities, which includes the investment from GIC.


"We have begun to take actions to ensure that Citi is well positioned to compete and win across our franchises while effectively keeping a tight control over our business risks," said Mr Pandit.

Mr Pandit took up the top job at Citigroup only last month, following the departure of his predecessor, Charles Prince.

Mr Prince resigned in November after the full extent of Citigroup's sub-prime mortgage losses began to emerge.

'Credit woes'

The sub-prime market is focused on providing loans to those with limited or poor credit histories.


MAIN SUB-PRIME LOSSES SO FAR
Citigroup: $18bn
UBS: $13.5bn
Morgan Stanley $9.4bn
Merrill Lynch: $8bn
HSBC: $3.4bn
Bear Stearns: $3.2bn
Deutsche Bank: $3.2bn
Bank of America: $3bn
Barclays: $2.6bn
Royal Bank of Scotland: $2.6bn
Freddie Mac: $2bn
Credit Suisse: $1bn
Wachovia: $1.1bn
IKB: $2.6bn
Paribas: $197m
Source: Company reports


During the US housing boom, this market expanded significantly. But a series of interest rate rises over two years meant many sub-prime borrowers could no longer afford their monthly payments, causing them to default on loans.

Citigroup is far from alone in being hit by bad debt, but its write-off is by far the biggest announced by any bank to date.

Analysts generally welcomed the results, as the $18.1bn bad debt write down was less than market expectations of $20bn.

However, analysts had mixed views on what message cutting the dividend and selling securities sent to the market.

"It does nothing to send any signal that we are anyway near the end of the road that we've been going along for the past seven months, in the overall credit market woes," said Howard Wheeldon, senior strategist at BGC partners.

Despite press reports that Citigroup would announce more than 20,000 job losses, none have so far been revealed.

Story from BBC NEWS:
BBC NEWS | Business | Citigroup's $9.8bn sub-prime loss

Published: 2008/01/15 20:57:43 GMT

© BBC MMVIII

 

[genmirajborgza786]

Fed red alert
Robert Peston 17 Mar 08, 07:47 AM The US central bank’s latest attempt to inject money and confidence into the financial system is its third in ten days – and arguably its most ambitious since the 1930s.

The Federal Reserve has reduced the rate at which banks can borrow directly from it, trebled the length of time they can borrow and allowed 20 securities firms direct access to the same facilities.

It is also putting $30bn of US taxpayers’ money at risk by providing a lending facility to help JP Morgan acquire Bear Stearns at a knockdown price.

That $30bn is secured against assets of questionable value. And if they turn out to be worth less than $30bn, well the loss will be taken by taxpayers, not by JP Morgan.

To digress for a second, the state-subsidised rescue of Bear Stearns is remarkably similar to the plan for Northern Rock to be acquired by Lloyds TSB last September, which was backed by the Financial Services Authority but rejected by the Bank of England and the Treasury.

The reason for the Fed’s emergency evasive action is that it has become very concerned about what bankers’ call deleveraging, or the process of lenders wanting their money back from any creditor perceived as risky.

That puts strains on important financial institutions, such as Bear Stearns, and on the health of the financial system – which underpins the global economy.

Will the Fed's latest initiatives - including an anticipated half-percentage-point cut in its main lending rate tomorrow - do the trick?

That's very unclear.

The continued fall in the dollar weakens the confidence of global investors in the US.

The Catch 22 for the Fed is that providers of capital may become even more risk-averse having seen quite how worried the authorities have become.
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BBC NEWS | The Reporters | Robert Peston

 

[genmirajborgza786]

Q&A: Bear Stearns banking crisis
US investment bank Bear Stearns, on the verge of collapse, has been bought by JP Morgan for a fraction of its former value, with backing of the US Federal Reserve.
How serious is this development for the future of the banking system, and what does it say about the credit crunch?


How big is Bear Stearns?

Bear Stearns is one of the major US investment banks which have dominated Wall Street for generations.

Founded in 1923, it is one of the leading global banking firms that operates at the wholesale level, dealing with governments, companies and other financial institutions.

Its core business lines include buying and selling stocks, government and corporate bonds, investment banking, global clearing services, asset management, and private client services.

Before the crisis, it had a market capitalisation of $17bn and assets under management of $385bn, and a global workforce of 15,000.

The collapse of its share price, from a peak of $169 to $2, means that it has lost more than 98&#37; of its value in the stock market.

Why was the bank in such trouble?

Bear Stearns has been severely affected by the loss of confidence in credit markets.

The company had invested heavily in sub-prime mortgage instruments and other securities which are now seen as highly risky, and which have fallen sharply in value.

Bear Stearns admitted that it owned $48bn in mortage-backed securities, of which $17bn might be difficult to value.

And it had less capital than its rivals, such as Citigroup and Merrill Lynch, who were also heavily exposed, to plug the gap.

Last summer, two of Bear Stearns' hedge funds had to be bailed out, partly precipitating the first stage of the global credit crunch.

Now other banks have become unwilling to invest money in Bear Stearns to keep its operations going.

And that has meant that it no longer has enough cash on hand, known as liquidity, to fund its operations.


How dangerous is the situation?

The worry is that if Bear Stearns collapsed, it would be forced to sell its assets, such as sub-prime mortgage securities, into the market at cut down prices.

This would have lowered their value even further.

And that could have affected the solvency of many other big US banks.

And if other big banks went bust, then credit would dry up rapidly across the whole economy, slowing economic activity.

This is what is known as "contagion."

That is why the New York Federal Reserve felt it had no choice but to intervene to support a short-term rescue deal

But there may be other banks that are already at risk of reaching a similar position to Bear Stearns.

Why was JP Morgan Chase interested in buying the bank?

As a large commercial bank, JP Morgan was hoping to take advantage of the credit crunch to expand its operations - as long as it did not face any risk.


Since the Fed has guaranteed that JP Morgan Chase can borrow up to $30bn against the value of its assets, there is little risk of losing money in the takeover.

In return, it is guaranteeing that it will meet all the payments due to other banks.

But it is unlikely that the majority of Bear Stearns activities will continue at its current level, so there may be major job losses.

The Fed has also lowered the interest rate on overnight lending to banks to 3.25% and allowed other investment banks to borrow money against their dodgy assets.

The Fed had already announced a new $200bn emergency loan facility which comes into effect on 27 March.

What is likely to happen now?

The Fed is already planning another rate cut on Tuesday that could be as large as 1%, in order to stimulate the economy.

This will take interest rates to below the rate of inflation, and may make it difficult to cut further.

But stock markets are falling on the worries that the problems in the financial sector are deeper and wider than previously thought.

Whatever happens to interest rates, it could be some time before confidence returns to financial markets.


Story from BBC NEWS:
BBC NEWS | Business | Q&A: Bear Stearns banking crisis

Published: 2008/03/14 15:50:16 GMT

&#169; BBC MMVIII

 

[genmirajborgza786]

Markets slump on banking worries

Markets slump on banking worries
Markets from New York to Tokyo have recorded heavy losses in reaction to the emergency bailout of US investment bank Bear Stearns over the weekend.
In New York the Dow Jones Industrials tumbled 194 points, more than 1.5%, in early trading before recovering.

London's FTSE 100 index was down 2.7%, in Paris the Cac 40 slumped 2.9% and Frankfurt's Dax fell 4.1%.

The Bank of England on Monday made an extra £5bn ($10bn) available for UK banks to borrow to ease credit fears.

The money was five times over-subscribed.

Meanwhile, on the markets US, UK and European banks were hammered; Lehman Brothers fell 30%, UBS lost 13%, HBOS 10% and Commerzbank fell 7.9%.

Investors are worried that the collapse of Bear Stearns, one of Wall Street's biggest names, is a sign that the credit crunch is getting worse and lending might seize up.

Bush statement

US President George Bush attempted to reassure investors on Monday.


Desperate times need desperate measures
Craig James Economist, Commsec


"We are in challenging times," Mr Bush said at a press conference.

But he added that the US authorities were "on top of the situation."

Lehman Brothers also attempted to reassure investors on Monday about its financial situation.

"Our liquidity position has been and continues to be very strong," Lehman Brothers said in a statement.

Asian stocks also fell, with Tokyo's Nikkei average closing 3.7% lower and Hong Kong's Hang Seng slumping 5.2%.


In Mumbai, the Sensex was down 6.5%.


Central bank help

Central banks have been trying to restore some confidence to the financial system.

On Sunday, the US Federal Reserve reduced its discount rate - the interest rate at which it lends to commercial banks - from 3.5% to 3.25% and offered to buy up the assets of other troubled banks.

The Fed is expected to lower its general interest rates on Tuesday by up to 1%.

"Desperate times need desperate measures. The Federal Reserve is doing what it takes to restore stability and if it means cutting the discount rate on a Sunday night in the US, then so be it," said Craig James, Chief Equities Economist at Commsec in Sydney.

Overnight inter-bank dollar lending rates have risen sharply in London to levels not seen since 11 September 2001, reflecting growing unease about the health of the US financial system.

Bear Stearns

Investors' confidence has been hit by the problems at Bear Stearns.

The investment bank was forced to seek emergency funding from the US Federal Reserve last week and was sold over the weekend to JP Morgan Chase for a tiny fraction of its earlier value.

The bank got into trouble when other banks refused to lend it money over fears that it had too many bad debts due to the sub-prime mortgage crisis.

The Fed has agreed to take over up to $30bn of Bear Stearns' assets, removing the risk for JP Morgan.

The quick sale failed to calm investors' nerves who, this week, will receive earnings announcements from other big US investment banks, including Lehman Brothers, Goldman Sachs and Morgan Stanley.

"There is persistent credit uncertainty. Market players have been repeatedly let down which shows the sub-prime mortgage problems are so deep-rooted," said Atsuji Ohara, global strategist at Shinko Securities in Tokyo.

"Just buying an investment bank does not solve the problem," he added.

Dollar woes

Worries about the credit crisis and the health of the banking industry also undermined the dollar.

It fell to 95.72 yen, its lowest level in more than 12 years. The euro hit a record against the dollar, buying $1.5903.

The weak dollar boosted commodities, with oil rising to another record, light sweet crude traded at $111.80 before falling back.

The dollar is also falling because of the expectation that the US Fed will cut interest rates further, making it less attractive to hold dollars as opposed to other currencies.



Have you been affected by the credit crunch? Are you having problems getting a mortgage or re-mortgage? What impact will the troubles of Bear Stearns have?



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Story from BBC NEWS:
BBC NEWS | Business | Markets slump on banking worries

Published: 2008/03/17 14:07:44 GMT

© BBC MMVIII

 

[genmirajborgza786]

FTSE 100 15 min delay
Dow Jones 15 min delay
Dax 15 min delay

Cac 40 15 min delay

Nasdaq 15 min delay
*All Times GMT Select time span for charts: One month Three months Twelve months Intra-day
More index pages
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Global
time index value change %
BBC Global 30 Mon 14:40 5320.69 26.87 0.50
Europe / Africa
time index value change %
London

FTSE 100 Mon 14:24 5507.30 124.40 2.21
FTSE 250 Mon 14:24 9466.40 239.70 2.47
FTSE 350 Mon 14:20 2874.50 69.50 2.36
FTSE All Share Mon 14:20 2816.13 70.04 2.43
FTSE Techmark Mon 14:24 1457.54 35.32 2.37


Pan European

FTSEurofirst 300 Mon 14:24 1216.23 38.79 3.09
DJ Eurostoxx 50 Mon 14:24 3470.67 95.92 2.69

Amsterdam AEX Mon 14:24 420.08 12.22 2.83

Frankfurt

Dax Mon 14:24 6249.70 202.20 3.13
MDax Mon 14:24 8324.81 338.80 3.91
SDax Mon 14:20 4263.26 151.05 3.42
TecDax Mon 14:24 701.58 30.25 4.13
Paris Cac 40 Mon 14:24 4486.85 105.30 2.29
Brussels Bel 20 Mon 14:24 3582.56 94.32 2.57
Madrid IBEX Mon 14:24 12821.30 200.10 1.54
Zurich
SMI Mon 14:24 6882.45 249.58 3.50
SPI Mon 14:20 5672.48 214.72 3.65
Moscow RTS Mon 13:00 1985.40 79.01 3.83
Johannesburg All Share Mon 14:09 29584.82 1063.21 3.47
South Asia
time index value change %
Bombay BSE Sensex Mon 10:59 14809.49 951.03 6.03
Karachi KSE-100 Mon 09:33 15043.81 5.06 0.03
Colombo CSE All Share Fri 15:06 2566.00 4.40 0.17
Asia Pacific
time index value change %
Sydney All Ordinaries Mon 06:01 5173.20 115.30 2.18
Hong Kong Hang Seng Mon 08:19 21084.61 1152.50 5.18
Tokyo Nikkei Mon 06:27 11787.51 454.09 3.71
Americas
time index value change %
New York
Dow Jones Mon 14:24 11908.02 43.07 0.36
Nasdaq Mon 14:24 2186.70 25.79 1.17
Chicago Mercantile Ex.
S&P 500 Mon 14:29 1279.16 8.98 0.70
Russell 2000 Mon 14:29 657.32 5.58 0.84
Buenos Aires Merval Fri 23:00 2117.10 15.77 0.75
Sao Paulo Bovespa Fri 23:00 61990.90 103.20 0.17
Mexico IPC Fri 23:00 29048.51 419.69 1.47

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US admits economy is in downturn !

US admits economy is in downturn
US Treasury Secretary Henry Paulson has admitted that the US economy is facing a "sharp decline" at the moment but hoped for a recovery later in the year.
The news comes after the US central bank, the Federal Reserve intervened to rescue troubled bank Bear Stearns, providing $30bn in emergency support.

Mr Paulson said that he did not believe investors saw the move as a bail-out.

The Fed is expected to slash interest rates later on Tuesday to help boost confidence in financial markets.

Meanwhile, two other leading Wall Street banks reported sharply reduced profits for the first three months of the year.

Goldman Sachs posted earnings of $1.5bn, while Lehman Brothers, whose shares had fallen sharply on Monday, earned $489m, or 60% less than in the same period last year.

But the numbers were not as bad as expected, lifting Wall Street shares.

The benchmark Dow Jones stock index jumped more than 230 points, or almost 2%, to 12, 209.3. The wider Standard & Poor's index and technology-dominated Nasdaq also rose.

More rate cuts


We know we're in a sharp downclimb and there's no doubt that the American people know that the economy has turned down
Hank Paulson, US Treasury Secretary


Economists are forecasting that the benchmark US interest rate will be cut by up to one percentage point from 3% to 2%. The decision will be announced at 1815 GMT (1415 EST).

It would be the fifth rate cut since the credit crunch started.

Mr Paulson has been touring the US breakfast television studios in an attempt to reassure markets and consumers about the economic situation.

"We know we're in a sharp downclimb and there's no doubt that the American people know that the economy has turned down," he said.

He said that policy was focused on calming the financial markets.

"The big focus on the part of all policy makers is to minimise the spillover to the real economy," he added.

Slowing economy

Mr Paulson declined to use the word recession to characterise the US economy, but recent polls of both economists and the public have revealed that they disagree.

The latest economic figures to suggest a sharp slowdown were the industrial production figures, published on Monday, which fell by 0.5% in February.

US job growth was also negative in February, but Mr Paulson said he expected the economic package and further rate cuts to lead to 500,000 more jobs this year.

But the Fed also faces worrying pressures over inflation.

US producer prices, released on Tuesday, rose by 0.3% in February compared to the month before, but a key measure of producer core inflation rose by 0.5%, the fastest pace in well over a year.


MAIN SUB-PRIME LOSSES SO FAR
Citigroup: $18bn
HSBC: $17bn
Merrill Lynch: $14.1bn
UBS: $18.4bn
Morgan Stanley $9.4bn
Credit Agricole: $5bn
Deutsche Bank: $3.2bn
Bank of America: $3bn
Barclays: $2.6bn
Royal Bank of Scotland: $2.6bn
Freddie Mac: $2bn
JP Morgan Chase: $3.2bn
Credit Suisse: $1.8bn
Wachovia: $1.1bn
IKB: $2.6bn
Source: Company reports


The US Federal Reserve has been trying to restore confidence in the banking business.

It has already cut interest rates from 5.25% to 3% since mid-September in a bid to boost the economy.

Banks have been unwilling to lend to each other because they are worried about losses on investments backed by US mortgages.

Those investments have been hit by the slump in the US housing market.

New figures showed that housing starts and building permits fell, the latter to the lowest annual rate since 1991.

"The housing industry is in a recession," said Josh Stiles, bond strategist at IDEAGlobal.

"There is no reason for the Fed not to be aggressive," said Mark Zandi, chief economist at Moody's Economy.com.

"The economy is in a recession, the financial system is in disarray and inflation is low," he added.
Story from BBC NEWS:
BBC NEWS | Business | US admits economy is in downturn

Published: 2008/03/18 14:21:37 GMT

© BBC MMVIII

 

[genmirajborgza786]

Oil shares drag down Wall Street

Wall Street shares fell on Wednesday as weakening commodity prices hit some of the biggest US companies.
Exxon Mobil fell 4.0&#37; and Chevron lost 4.6% after crude oil fell by more than $6 a barrel on worries about the outlook for the US economy.

But bank shares were higher, lifted by better-than-expected results from investment bank Morgan Stanley.

The Dow Jones closed down 2.4% or 294.8 points at 12,097.9 while the Nasdaq fell 2.6% to 2,210.1.

London's FTSE 100 index was down 1%, Frankfurt's Dax was down 0.3% and in Paris the Cac 40 was down 0.5%.

Additional funds

Despite Morgan reporting a 42% drop in first-quarter profits, analysts had expected much worse from the bank.
Analysts said US investor confidence was further lifted by US Treasury Secretary Henry Paulson's announcement that changes to government-backed mortgage providers Fannie Mae and Freddie Mac would release an additional $200bn (&#163;100bn) for the financing of home loans.

US stocks were also helped by Tuesday's latest interest rate cut from the Federal Reserve.

Yet despite the rises, analysts said market turbulence could continue for some time.

The UK stocks news was dominated by sharp losses to banking stocks, led by HBOS.

The declines led to the UK market watchdog, the Financial Services Authority, announcing that it was looking into whether rumours had been deliberately spread to undermine bank shares.

Officials at the Bank of England denied that any UK banks were in trouble.

Concerns about the financial strength of banks were strengthened last week when the fourth-largest corporate lender in the US, Bear Stearns, needed emergency funds before being bought by rival JP Morgan Chase.

Story from BBC NEWS:
BBC NEWS | Business | Oil shares drag down Wall Street

Published: 2008/03/19 20:16:03 GMT

&#169; BBC MMVIII

 

[genmirajborgza786]

JP Morgan raises Bear Stearns bid
JP Morgan Chase has raised its offer for Bear Stearns to $10 a share, from the original offer of $2 a share.
Under the deal, JP Morgan Chase is also buying 95 million newly issued Bear Stearns shares, or 39.5&#37; of the bank.

The initial offer angered many Bear shareholders who thought the company was being sold at a bargain price.

Including the new shares, the latest offer values Bear Stearns at around $2.1bn, still a fraction of its value before the near collapse 10 days ago.

Purchasing the extra shares puts JP Morgan Chase in a much stronger position to push through the takeover.

'Increased chance'

The price of Bear Stearns shares almost doubled. They closed at $11.25, up $5.29. JP Morgan Chase ended up 1.2% at $46.55.

But analysts say there will still be doubts, despite the sweetened offer.

"Clearly this increases the chance the deal goes through, but there are still going to be employees and shareholders unhappy with $10 a share," said James Ellman, Portfolio Manager at Seacliff Capital in San Francisco.

JP Morgan Chase also agreed to change the guarantees it is receiving from the US Federal Reserve.

The investment bank will now take on the first $1bn of any Bear Stearns' losses and the Fed will fund remaining $29bn.

Credit crunch

The raised offer might calm shareholders who feel that Bear Stearns was sold at a bargain price.

Bear Stearns, a victim of the credit crunch, was sold as confidence in the bank fell and clients withdraw funds.

The bank got into trouble when other banks refused to lend it money over fears that it had too many bad debts due to the sub-prime mortgage crisis. Clients were worried about Bear Stearns exposure to investments in assets backed by US mortgages.

It had been reported that the Fed was reluctant to agree to a raised offer as it did not want to appear to be bailing out Bear Stearns shareholders.

Many of those shareholders have seen their investment decimated.

Story from BBC NEWS:
BBC NEWS | Business | JP Morgan raises Bear Stearns bid

Published: 2008/03/24 21:00:35 GMT

&#169; BBC MMVIII

 

[genmirajborgza786]

Global credit crunch, facts and figures
The panic in world financial markets has led to sharp falls in share prices and led to the contraction of credit markets. BBC News looks at how key indicators around the world have moved as recession fears grow.
STOCK MARKET JITTERS
RISING COMMODITY PRICES
THE FED'S FALLING INTEREST RATES - OVER 12 MONTHS
Twelve months ago interest rates were 5.25&#37;. By 30 January they had dropped to 3%. They are now 2.25%, as of 18 March.
FALL OF A WALL STREET GIANT

Wall Street bank Bear Stearns collapsed when other banks lost confidence in the value of its investments in sub-prime mortgages. It was bought by JPMorgan Chase in March.
COLLAPSING US HOUSING MARKETS
Underlying the financial market wobblies is a real decline in US house prices nationwide for the first time since the 1930s.
Story from BBC NEWS:
BBC NEWS | Business | Global credit crunch, facts and figures

Published: 2008/03/18 15:32:31 GMT

&#169; BBC MMVIII

 

[SPI]

you don't want democrats as a president, like barrack obama. (he is talking about invading pakistan for osama bin laden).

 

[BATMAN]

you don't want democrats as a president, like barrack obama. (he is talking about invading pakistan for osama bin laden).

They way Bush invaded Afghanistan in search for the same OBL and today US economy is trembling.
As far we know OBL and Al-Qaeeda is a deffected US army.
US should consider a pension scheme for their X-Army men. I bet this would help.

I'm also sure their will be many in US who don't like democrats, either.

 

[mujahideen]

Before when they U.S. went into recession the government had money to bail out the country but this time the U.S. government has nothing, they are in debt.

 

[SPI]

They way Bush invaded Afghanistan in search for the same OBL and today US economy is trembling.
As far we know OBL and Al-Qaeeda is a deffected US army.
US should consider a pension scheme for their X-Army men. I bet this would help.

I'm also sure their will be many in US who don't like democrats, either.

yes like me.

 

[mujahideen]

I'm also sure their will be many in US who don't like democrats, either.

It doesn't matter who comes to power in the U.S. Republican or Democrat their policies are alway a continuation of the past government. All this stuff about pulling out troops and ending the war is all BS, the fact is U.S. foreign policy is not made in the White House but in the Pentagon.