Mayor Bloomberg has cancelled his trip to California Monday due to the financial turmoil of two major financial institutions in NYC, WCBSTV reports.
The mayor spent all weekend on the phone with federal officials and financial executives trying to gather intelligence from his friends and former colleagues on Wall Street.
While he does not have any specific or special knowledge on the situation, Bloomberg feels the right thing to do is at this point is to be here in NYC.
The Wall Street Journal reports: The American financial system was shaken to its core on Sunday. Lehman Brothers Holdings Inc. faced the prospect of liquidation, and Merrill Lynch & Co. was close to a deal to sell itself to Bank of America Corp.
The U.S. government, which bailed out Fannie Mae and Freddie Mac a week ago and orchestrated the sale of Bear Stearns Cos. to J.P. Morgan Chase & Co. in March, played much tougher with Lehman. It refused to provide a financial backstop to potential buyers.
Without such support, Barclays PLC and Bank of America, the two most interested buyers, walked away. On Sunday night, Bank of America was close to striking a deal to buy Merrill Lynch for about $44 billion, or $29 a share. Lehman was working on a possible bankruptcy filing that would allow most of its subsidiaries to continue operating as the firm is wound down.
A sense of foreboding gripped Wall Street as top executives feared collateral damage from a Lehman liquidation. Attention turned to Merrill Lynch, which boasts the largest force of retail brokers, and to American International Group Inc., the insurance giant. Both firms have seen their stocks get hammered, and their managements spent the weekend trying to come up with plans to reassure the markets.
AIG executives spent the weekend trying to raise cash, either from asset sales or a capital infusion from private-equity firms, or both. AIG executives were meeting with regulators to see if they could transfer capital from some of its subsidiaries to the holding company.
As worries spread across Wall Street that Lehman wouldn’t survive, brokerage firms, hedge funds and other traders moved to disentangle themselves from trades with Lehman. When hopes of a potential sale dimmed, a quiet Sunday on Wall Street turned into a mad rush. Executives and traders hurried to their offices or worked their phones to unwind outstanding contracts with Lehman and to gauge their overall exposure.
(CBS2 HD / Wall Street Journal)
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11 Responses
We should daven for the MANY frum people working at Lehman (and Merrill.)
The problem is no one is held accountable. There should be laws controlling motgages etc what’s too risky etc. No one is gonna give back their millions in bonuses that they received on deals that are in the present bringing down these financial giants. WHY?? If bonuses would be paid a few years later. These guys would think for the good of their company not just their pockets.
What a clear explanation of why RIBIS is prohibited. It leads to lenders limiting thier concerns to the short term interest of getting repaid, rather than the long term interest of the money being wisely invested.
bloomberg worked for merril for many years.
merill was the original financier of his “bloomberg company” and still holds a significant stake in blomberg.
he did not cancel his trip to look after wall street, but to ensure his investment (in bloomberg co) stays safe.
and there’s NOTHING WRONG with that. even though he works for the city, he still has a responsibility to look after his own investments!
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The problem is no one is held accountable. There should be laws controlling motgages etc what’s too risky etc. No one is gonna give back their millions in bonuses that they received on deals that are in the present bringing down these financial giants. WHY?? If bonuses would be paid a few years later. These guys would think for the good of their company not just their pockets.
Comment by JOLI — September 15, 2008 @ 4:35 am
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agree you found the cause of the problem. Somehow these people must be held accountable or at the very least return their salary bonuses.
PS the big shots from Lehman are still getting their bonuses, now that is chutzpa
BAN RIBIS – require a “lender” to be accoutable
with his own money if the business fails – do you think they would have made those silly subprime loans if they were forced to be co-investors (paid last) rather than lenders (paid back first).
illini – What is your proposal to prevent a recurrence of what occurred over the past 4 days?
merrill sold the stake in bloomberg. People check their facts. If you saw a frum guy on tv, thats me. I was interviewed for the lehman crisis
ps none of the big shots are still getting their bonuses. Please check your facts before you talk. ribbis is only prohibited between yehudim. We have always been the money lenders to the world.
#9, frum guys don’t have tv’s. what were you doing on it? some bored newsman bumped into you on your way to the pizza store, as you were passing lehman’s building?
First of all plenty of frum people have tvs but besides that. I work at Lehman and was walking out and was interviewed by many reporters.