Things are getting so bad now, I thought it's better make a common thread....
For today:
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Washington Mutual (down 20%).
Quote:
Ladenburg Thalmann banking analyst Richard Bove expects Washington Mutual will lose $40 billion on its loan portfolio over the next three years and continues to include WaMu on his list of top 12 banks and thrifts at greatest risk of failing.
Shares of Lehman Brothers went into a freefall Tuesday as hopes faded for an injection of fresh capital for the ailing Wall Street investment bank, analysts said.
Shares of American International Group Inc, the world's biggest insurer, fell 16 percent on Tuesday on fears that the company's large exposure to the mortgage markets could trigger the need to raise fresh capital.
Not really sure if Merrill Lynch deserves to be beaten down so badly, but the stock lost almost 17% yesterday.
Quote:
Merrill Lynch & Co Inc's shares fell nearly 17 percent on Thursday as worries over Lehman Brothers Holdings Inc's future raised questions on which investment bank may be next to face questions about its survival.
Bank of America may buyout Merrill Lynch for $44 billion.
This is a much higher price than Merrill Lynch's current market price.
(It means a price of $29 per share).
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The troubles for AIG seem to continue.
Quote:
American International Group Inc., the insurer struggling to avoid credit downgrades, is seeking a $40 billion bridge loan from the Federal Reserve as it tries to sell assets, the New York Times reported.
Quote:
AIG, the largest U.S. insurer by assets, has units that originate, guarantee and invest in mortgages.
Quote:
The insurer was in discussions with buyout firms including KKR & Co. LP and J.C. Flowers & Co. to raise $20 billion in capital, said people familiar with the situation.
Tuesday is a FED DAY, meaning an extreme move could come either way. If the Fed uses the today’s action as a reason to Cut interest rates, we could see a huge surge higher in the market. The rate decision will be announced at 2:15 EST.
In addition, Goldman Sachs (GS) reports earnings on Tuesday, which could move the market higher if Goldman reports better than expected earnings, or send it lower if it reports beneath expectations. Many eyes will be focused on this stock on Tuesday.
As usual, Weekly Crude Oil Inventories will be reported early Wednesday, and with the recent drop in oil, the potential for oil to spike (or plunge) from this report exists. More eyes than usual may be focused on this report and the direction oil takes as a result.
On Thursday, the Leading Economic Indicators will be reported, which could potentially move the market if there’s a major change or unexpected result.
Friday is Quadruple Witching!!! According to the Street Authority, “Quadruple witching days are usually accompanied by considerable volatility in stock and derivative prices, as well as increased trading volume. As a result, investors can anticipate and plan for the potential effects of these relatively turbulent trading days.”
Is this "AIG" related to India company "Tata-AIG"?
If yes, then what will be impact on Tata-AIG?
Yes, It is the same AIG.
No major impact on Tata-AIG.
A promoter going bankrupt doesn't effect the finances of a limited company.
In the worst case, AIG may be forced to sell its holding in Tata-AIG to someone else.
Quote:
Tata AIG Life Insurance Company Limited and Tata AIG General Insurance Company Limited (collectively 'Tata AIG') are joint ventures of the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength.
International expertise and financial strength will soon be gone.
Only integrity will remain....
Quote:
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the Tata Group’s pre-eminent leadership position in India and AIG’s global presence as the world’s leading international insurance and financial services organization. The Tata Group holds 74 percent stake in the insurance venture with AIG holding the balance 26 percent.
I just saw interviews on TV across the world people are terminating their insurance policy with AIG and getting back whatever money they can get.
It may follow the Lehman's food prints.
Anyway I have no investment with Lehman and AIG.
cheers!
Just saw a newsflash on CNBC about AIG.
AIG needs a loan of $75 billion.
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No single financial institution alone can provide that much cash to AIG.
AIG does have the assets to raise the cash, but it is not able to sell them currently.
If given time, AIG may survive.
Thus, I feel US Federal Reserve would intervene in this case.
Fed had earlier stated that it won't bailout more institutions. However, I think Fed will see this as an exceptional situation and provide liquidity to AIG.
Is this "AIG" related to India company "Tata-AIG"?
If yes, then what will be impact on Tata-AIG?
IRDA (Insurance Regulatory and Development Authority) has stated today that Indian operations of AIG will remain unaffected.
If Tata-AIG has to grow in future, it will need more capital. If AIG is not able to provide the capital in future, IRDA may relook at the matter.
Currently both companies - Tata AIG Life Insurance and Tata AIG General Insurance have sufficient capital and solvency.
Quote:
The Indian insurance regulatory body, the Insurance Regulatory and Development Authority, has said that it did not expect any immediate threat to the Indian operations of troubled insurer AIG.
Quote:
Though IRDA said that there was no immediate threat to the Indian operations of AIG, there could be repercussions in around a year if there was any disruption in capital flow to the two joint venture companies.
The present solvency margins of the joint ventures insurance company of Tata AIG is at a comfortable 2.3, well above the mandated 1.5.
yesterday dow and nasdaq shoot up. will the bad news flow come to an end?
The bad news flow won't come to an end, but yesterday's developments will bring big relief to the troubled financial institutions in the US.
The government is thinking about setting up a separate entity which can temporarily buy troubled assets from financial firms and thus allow them to free their cash.
Washington Mutual is history....becomes the largest bank to fail in the US...
Quote:
As the debate over a $700 billion bank bailout rages on in Washington, one of the nation's largest banks — Washington Mutual Inc. — has collapsed under the weight of its enormous bad bets on the mortgage market.
Another major bank is gone - Wachovia Corporation.
Wachovia Corporation's banking assets and deposits have been sold to Citigroup.
Citigroup will absorb a maximum of $42 billion of losses.
Any additional losses will have to absorbed by Federal Deposit Insurance Corporation (FDIC).
Citigroup will be paying just $2.16 billion for Wachovia Corporation's banking operations.
However, FDIC will get preferred stock and warrants for the guarantee that it will be providing.
Quote:
Citigroup has agreed to buy Wachovia bank in a deal backstopped by taxpayers and brokered by the Federal Deposit Insurance Corporation to avoid another major corporate failure in the midst of the ongoing financial crisis.
Citigroup will pay the Charlotte-based Wachovia about $2.16 billion, or $1 per share, for its banking operations. Wachovia will retain its wealth management and brokerage operations.
Wachovia has been saddled by mortgage-related losses. Under the terms of the deal, Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will be responsible for any losses beyond that, but was given $12 billion in Citigroup preferred stock and warrants in return for that guaranty.
Dexia had to be rescued yesterday to avoid its collapse.
It seems EU is no better than US.
Quote:
Dexia, a Franco-Belgian bank that specializes in lending to local governments, got a $9.2 billion injection of capital to stave off imminent collapse after a loss of public confidence led to a 30 percent decline in its stock price on Monday, according to announcements from the French and Belgian governments.
It was the fourth time in recent days that European officials have had to respond to a crisis at one of their financial institutions, abruptly ending the confidence European officials displayed as recently as last week that their financial system was not as endangered by the troubled mortgage loans undermining the U.S. system. With the pace and scale of events seeming to quicken, the Irish government guaranteed the debt of six financial companies amid a sell-off of bank stocks, and European officials discussed possible broader action to address problems with the global financial system
Financial Stocks Slaughtered on Wall Street
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Bailout package rejected
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