Archive for September, 2008

Bailout Package FAILS: Biggest Market Decline (By Points) in History: $1.2 Trillion Wiped Out

Posted on Monday, September 29th, 2008 at 4:25 pm.

  • Update: Hilarious news Campbell Soup Co. was the only stock in the S&P 500 that escaped yesterday’s historic sell-off. That’s right: 499 fell, and just one rose. Wall Street was clearly preparing for the soup lines.

Dow is down 780 to 10370 which is around 7%; Nasdaq is down 200 to 1980 (below 2000 for the first time in a while iirc) around 9%; S&P down 100 to 1100 around 9%. This isn’t just about the banking industry; every single one of the Dow’s 30 companies fell today. Sure it’s all speculative value, but $1.2 trillion wiped out is a pretty big deal.

Pretty dramatic stuff; bigger across the board declines than the opening day after 9/11.

The house vote failed somewhat across party lines, Dems were 141-94 (ish) while the Republicans were 66-132 (ish).

No idea what happens now, it’ll be interesting to see where the market goes; regional banks got slammed by the news, and we can probably expect more failures in the weeks to come. Most of the big banks will have to keep all the bad assets on their books if they don’t get the bailout.

Citigroup acquired Wachovia’s banking assets (as mentioned earlier).

China's First Spacewalk

Posted on Saturday, September 27th, 2008 at 4:34 pm.

Today marked the first spacewalk for China; Zhai Zhigang, a colonel in the People’s Liberation Army completed a 15 minute tethered walk while the Shenzou VII orbited in space.

China’s plans for future space endeavors include launching more rockets up in space (including some unmanned ones, I believe), gradually bringing up the materials to construct a space station.  No matter what your views (or maybe our parents’ views) on the motivations for past space exploration of the US and Soviet Union, I think you can agree that this is pretty cool.

I like how we’re starting to catch up to sci-fi, even though 2001 was way too ambitious.

Paul Newman Passes Away

Posted on Saturday, September 27th, 2008 at 3:10 pm.

For those of you that haven’t already heard, Paul Newman died early this morning of cancer at the age of 83. He had been in pretty poor condition for a while and was getting his affairs in order.

I don’t know if anyone else is a fan of his, but he’s my all-time favorite actor. He’s obviously been in many movies, but for my money, his best two are the Sting and the the Hustler–in fact the Sting is my all-time favorite movie (though his performance in Slap Shot is also legendary).

I miss him already.

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An Addendum to Vishal's Post:

Posted on Friday, September 26th, 2008 at 11:52 am.

WaMu has crashed due to a “wave of deposit withdrawals,” leading to J.P. Morgan agreeing to buy out the Seattle bank.  Here’s hoping I can use my Chase ATM card in WaMu ATMs now.

Hollywood is crap…comparatively speaking

Posted on Thursday, September 25th, 2008 at 10:47 pm.

There is a new German film out today in theaters (in Germany, not in the U.S.) called “Der Baader-Meinhof Komplex.” I don’t expect anyone one here to know what the Baader-Meinhof group was, but the film is based on a true story that in American terms is the Civil Rights movement, Charles Manson, MLK and JFK Assassinations, Hunt for Nazis in hiding, and the Unibomber wrapped into one event.

Now, without be able to understand much or any of the dialogue in the movie trailer, I would like you all to watch the whole thing, and tell me your impressions of it, and your impressions of it in comparison with recent American movies.

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Era of Independent Investment Banks Officially Over: This May Actually Impact Your Bank Deposits

Posted on Sunday, September 21st, 2008 at 11:21 pm.

Goldman Sachs and Morgan Stanley, the two remaining of the five independent investment banks, have officially changed status from Investment Banking companies into Bank Holding Companies (commercial/universal bank model).

What this means is that they will now be able to start commercial banks and compete directly in all markets with their three universal bank competitors, Bank of America, JP Morgan Chase, and Citigroup as well as other more “pure” commercial banks such as Wells Fargo or Wachovia. They will also get access to the fed discount window (for borrowing overnight) as well as have required reserve limits.

The main reason they had to pursue this path is that investment banking as we know it, where you leverage your capital 25-30 times over and run with it, is over. Now, with their three largest competitors having huge commercial banks, Goldman Sachs and Morgan Stanley have no choice but to go with the depositary model to buttress their balance sheets.

What this means for you is that there will be massive consolidation in the US banking sector. Essentially, Goldman Sachs and Morgan Stanley are going to want to acquire scale to compete directly on the same terms as Bank of America (acquired Merrill Lynch), JP Morgan Chase, and Citigroup. This means that they will need to buy lots of smaller banks probably rather fast.

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In keeping with the spirit,

Posted on Sunday, September 21st, 2008 at 2:35 am.

you should all know that Mike ALSO got an iPhone.  The same guy who *got the picture of me happened to get Mike also: