Lehman
Recovery Seen as Justifying $2 Billion Bankruptcy - (www.bloomberg.com) Harvey
Miller,
the lawyer guiding Lehman Brothers Holdings Inc. through the biggest-ever U.S.
bankruptcy, sipped a cappuccino at a tourist-filled cafe near Manhattan’s
Central Park and reflected on how his client’s collapse five years ago went
from unthinkable to inevitable. Lehman’s demise “ignited a worldwide
conflagration that almost brought down the global financial system,” said
Miller, who filed the Chapter 11 petition at 2 a.m. on Sept. 15, 2008, in New
York after the bank failed to win U.S. government aid or attract a buyer. “The
consequences were unknown.” Five years later, Miller takes credit for helping
fend off some creditors’ liquidation demands and instead turning the remains of
one of the biggest failures of the financial crisis into a going concern. In
the process, the Lehman estate has paid more than $2 billion in fees and
expenses to professionals like him for that work, dwarfing the previous record
of $757 million in Enron Corp.’s bankruptcy.
Investors yank record $20 billion from ETFs - (money.cnn.com) Investors yanked more than $20 billion out of
exchange-traded funds in August, according to Morningstar. That's the largest
monthly outflow since the first ETF launched 20 years ago. Although stocks have
been surging for most of the year, August was the worst month of 2013. Stocks
fell as traders worried about the potential impact of the Federal Reserve
scaling back its stimulus program sooner rather than later. Fears about a U.S.
military strike against Syria didn't help either. Investors pulled more than
$15 billion out of U.S. stock ETFs alone. The SPDR S&P 500, the
largest and most liquid ETF, was the biggest loser.
What Might Have Been and the Fall of Lehman - (finance.yahoo.com) Let’s play a game. It is called “What if … .” As
we observe the five-year anniversary of the financial crisis — Lehman Brothers
filed for bankruptcy five years ago this coming weekend — the most intriguing
hypothetical question about those fateful days is what would have happened had
the government bailed out Lehman. It would have changed the course of history,
certainly, but maybe not for the better. The collapse of Lehman has long been
considered the domino that led to the tumbling of so many others: Merrill
Lynch’s hasty sale to Bank of America; the bailout of the American International Group; the breaking of the buck in the money market;
the near collapse of Goldman Sachs and
Morgan Stanley that
led them to become banking holding companies; and the decision by the
government to pursue the $700 billion Troubled Asset Relief Program to bail out
the entire banking industry. The decision not to rescue Lehman has been called
a mistake and worse. Christine Lagarde, the French finance minister at the
time, called it “horrendous.” No one suggested Lehman deserved to be saved. But
the argument has been made that the crisis might have been less severe if it
had been saved, because Lehman’s failure created remarkable uncertainty in the
market as investors became confused about the role of the government and
whether it was picking winners and losers. The government had bailed out Bear
Stearns and then nationalized Fannie Mae and Freddie Mac but
left Lehman for dead only to turn around and save A.I.G.
Mortgage
Applications Plunge to Near 5-Year Low - (www.reuters.com) Applications
for U.S. home loans plunged as mortgage rates matched
their high of the year, with refinancing activity falling to its lowest in
nearly five years, data from an industry group showed on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home
purchase demand, sank 13.5 percent in the week ended September 6, after rising
1.3 percent the prior week. That puts the index at its lowest since November
2008 and the depths of the financial crisis. The data come just a week
before U.S. Federal Reserve policymakers
meet to consider slowing a massive bond-buying program, which includes
purchases of mortgage-backed securities.
The Fed's support has been a major factor in boosting home prices in the
United States after a slump during the crisis, and many economists worry that a
pullback now may set back the housing market's nascent recovery.
Swedes
Face Forced Deleveraging as Debt Swells to Record - (www.bloomberg.com)
Sweden is
looking into the option of forcing households to start amortizing their
mortgages in an effort to prevent debt loads rising from a record. “We want to
make clear that the next step, should we judge that we have to take it, rather
is amortization than something else,” Martin Andersson, director-general at the
Swedish Financial Supervisory Authority, told reporters yesterday after a
parliament hearing in Stockholm. “If household debt accelerates, as we’ve seen
before, well, then we must do something.” Swedish apartment prices have more
than doubled since 2000, sparking concern a housing bubble may be brewing after
private debt hit a record last year. A report in March from the Financial
Supervisory Authority showed that, at the current pace of amortization, it
takes Swedish households 140 years on average to repay their home loans. Only
40 percent of borrowers with mortgages smaller than 75 percent of their
property’s value actually pay down their debt, according to the report.
No comments:
Post a Comment