With Trillions dollar's pledged, to bailout out MBS;
I can't invest in someone new;
As Lehman Brothers is sliced and diced some more, say;
Breaking is hard to do;;

When Warren Buffet' Berkshire Hathaway;
Takes its insurance and packs it away;
Buffet fears 1,500 banks down the drain;
Their capital is worthless stock from Freddie or Fannie Mae;

Yes, Breaking up is hard to do;;

(Spoof music, Breaking up is hard to do, Neil Sedaka)

Trillions ofr tax money is pledged by Treasury Secretary Hank Paulson to bail out bankrupt banks' securities in the financial crash, and more and bigger banks are getting the runs. More big bailouts are being rumored in the financial press.

Lehman (or, Lemon) Brothers, is getting cut up and dissed this weekend, in what form exactly is not known. Whether it will be "guaranteed" or paid out by the Fed Reserve also is not known. Lehman's soon to be out of business CEO Richard Fuld is closely advised by fascist Felix Rohatyn. It is "into endgame" reported the Wall Street Journal after it reported a $3.9 billion second-quarter loss and started setting up a separate unit to try to auction off $30 billion in commercial mortgage-backed securities. Note that Merill Lynch just sold about $30 billion in Mortgage Backed Securities, that were sold for about $4.5 billion, that is, marked down to 23-percent or so. Next on the "breaking up is hard to do list" is Washington Mutual, aka WaMu, the United States' largest Savings and Loans Bank.

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Comments

5 Comments. [ Add A Comment ]

Comment by S.L.

September 14th 2008 15:07

The Political Brief

My father-in-law banks with WaMu, Howard. Will it have any effect on him?

Comment by Howard

September 14th 2008 15:31

Real Crash

Normally I would say no, because when banks are taken over they open after a weekend under a new name. Of course there is the problem of accounts with over $100,000, the limit for FDIC insurance. They could lose money over 100Gs. However, with WaMu accts over $300 billion, and the FDIC insurance fund at $45 billion, I think we are getting into real crash territory. Something could happen unexpected, or they could just print up more toilet papers (oops, US Dollars).

That's why we need the Homeonwer and Bank Protection act.

Comment by S.L.

September 14th 2008 15:47

The Political Brief

Can you recommend a bank that would be safer for him? A local savings and loan, maybe? Or credit union? Or would they actually be safe if the crash happens? Maybe a cookie jar is a good idea... LOL

Comment by Howard

September 14th 2008 16:03

Real Crash

The cookie jar has promise! LOL. After 30-years of post-industrial, wild speculative policies, the main danger, is the dollar going bad. Then, China will also go bad, which is buying everything from the world, and has lots of dollars, and then that is it...