FingerLakes1.com Forums
Topic Options
#772508 --- 03/17/08 08:16 AM Worst Financial Crisis Since WWII
Retired Soldier Offline
Silver Member

Registered: 12/23/05
Posts: 12945
Loc: Rochester, NY
Monday 17 March 2008
By AFP
The current crisis rocking the markets and global economy could turn out to be the worst since World War II, former US Federal Reserve chairman Alan Greenspan said in remarks published Monday.

"The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War," Greenspan said in a Financial Times commentary.

"It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities," he said, referring to the meltdown in the US subprime home loan market and subsequent massive losses for the banks holding the debt instruments.

"The crisis will leave many casualties," he said, his remarks coming after Bear Stearns, the fifth largest US investment house collapsed Friday and was taken over by JPMorgan Chase for a fraction of its value of only a week ago.

At the weekend, the Fed also announced a series of emergency measures intended to ease the credit crunch and calm nerves as investors fled to apparent safety in the euro and commodities such as oil and gold, which hit record highs again Monday as stockmarkets in Asia and Europe tumbled.

Top
FingerLakes1.com
#772526 --- 03/17/08 08:50 AM Re: Worst Financial Crisis Since WWII [Re: Retired Soldier]
Retired Soldier Offline
Silver Member

Registered: 12/23/05
Posts: 12945
Loc: Rochester, NY
Bear Stearns takeover sparks fresh financials rout
Mon Mar 17, 2008 9:13am EDT
HONG KONG/LONDON (Reuters) - An emergency rescue of Bear Stearns Co Inc stunned the Wall Street bank's staff and pummeled financial stocks on Monday amid fears that few banks are safe from deepening financial market turmoil.

Bear Stearns staff turning up for work found the value of their stock options in tatters and the future of their jobs up in the air.

But the grim mood spread further than Wall Street's fifth biggest bank as shares in European banks including UBS in Switzerland, HBOS in Britain and SocGen in France fell over 10 percent as concern swept markets that the value of risky assets needs to be marked down even further.

In Asia some of Japan's biggest banks also fell, with Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group down 3 percent or more.

JPMorgan Chase said late on Sunday it would buy Bear Stearns for just $2 a share -- more than 90 percent below its price at Friday's close.

The deal underlined the risks banks are facing as the U.S. mortgage crisis deepens and the rock-bottom price raised questions over valuations across the industry.

Top
#772991 --- 03/17/08 09:19 PM Re: Worst Financial Crisis Since WWII [Re: Retired Soldier]
Retired Soldier Offline
Silver Member

Registered: 12/23/05
Posts: 12945
Loc: Rochester, NY
The White House will "do what it takes" to stabilize chaotic markets and minimize the economic damage, Treasury Secretary Henry Paulson said Sunday.

All eyes now are on Wall Street as leading financial advisers prepared for a Monday meeting with President George W. Bush and the Federal Reserve weighs another deep interest rate cut Tuesday to stem even more deterioration.

Paulson, in a series of news show appearances, defended the Federal Reserve's extraordinary step Friday to provide emergency financing to one of Wall Street's most venerable firms, Bear Stearns Cos. The central bank's intervention was "the right decision," he said.

The treasury chief sidestepped questions about what would have happened if the Fed had not ridden to the rescue, whether other firms are on shaky ground and the possibility of additional bailouts similar to Bear Stearns'.

At the same time, however, Paulson sought to send a calming message that the administration is on top of the turbulent situation. "The government is prepared to do what it takes to maintain the stability of our financial system," he said. "That's our priority."

Bush planned to meet on Monday with his advisory panel on financial markets, whose members include Paulson and Fed Chairman Ben Bernanke. The panel on Thursday recommended stricter regulation of mortgage lenders as part of a broad effort to prevent a repeat of a credit crisis threatening to drive the U.S. into the first recession since 2001.

Economists increasingly believe the spreading fallout from a severe credit crisis has pushed the United States into recession. The situation has led to record-high home foreclosures, forced financial companies to take multibillion losses from bad mortgage-linked investments and rocked Wall Street.

"No one is debating the fact that this economy has slowed way down," Paulson said. "We feel it, we know it, the American people know it."

Top