Wall Street In Crisis
In Focus
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The U.S. financial system was badly shaken by the failure of Lehman Brothers, the surprise takeover of Merrill Lynch and big asset sales by AIG.
Events
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Treasury Secretary Henry Paulson defended his decision to change how the $700 billion bailout fund is used, telling CNBC it was forced by the spreading credit crisis.
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Treasury Secretary Henry Paulson says the government will now provide cash to financial firms in exchange for equity, as the government steps us rescue efforts.
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Central banks around the world Wednesday cut interest rates amid mounting losses in financial markets, as the credit crunch continued to seize up lending.
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Congress approved a $700 billion bank bailout Friday, but stocks tumbled as investors worried that the plan wouldn't be enough to stem the credit crisis.
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Congress pledged to hammer out a revised financial bailout proposal, but it was unclear how much support any new plan would get.
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The government's failed rescue plan has heightened Wall Street's greatest malady right now: Fear.
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Morgan Stanley agreed to sell a 21 percent equity stake to Mitsubishi UFJ Financial Group, Japan's largest bank, for $9 billion Monday, bolstering its capital base and improving its chances for surviving the credit crisis.
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The fate of a Wall Street bailout remained unclear as a White House meeting of both parties ended without an agreement and some participants said a deal may even be dead.
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Wachovia has begun talks with Citigroup about a potential merger, people briefed on the matter told the New York Times.
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Washington Mutual, the large U.S. savings and loan beleaguered by mortgage losses, is pressing ahead for a takeover deal by talking to multiple suitors, as well as exploring options to raise capital, sources familiar with the situation said Tuesday.
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A $700 billion financial rescue plan was sent to Congress Saturday, and Democrats moved quickly to propose changes—including possible help for homeowners and a salary cap for CEOs.
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Wall Street suffered another beating Wednesday at the hands of investors panicking over the state of large banks, as they flocked from stocks and sent safe-haven areas like gold soaring.
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A Wall Street bailout proposal was greeted with bipartisan skepticism in Congress, signaling that the $700 billion measure faces an uphill battle.
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A proposal to fund $25 billion in low interest loans to the auto industry was included on Monday in draft legislation that could be considered by the U.S. Congress later this week.
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Goldman Sachs and Morgan Stanley will change their status to bank holding companies, allowing them to take deposits and bolster their capital. This means a future of stricter regulation, less leverage and probably lower returns.
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The Securities and Exchange Commission temporarily banned short-selling on 799 financial stocks to boost investor confidence on Friday, one day after the UK Financial Services Authority took a similar step.
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Treasury Secretary Henry Paulson Friday called for the U.S. government to spend hundreds of billions of dollars to take toxic mortgage assets off the books of financial firms to restore financial stability.
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Former Allstate CEO Edward Liddy will be the new CEO of AIG, which was rescued by an $85 billion loan from the Fed, in exchange for an 79.9% stake in itself.
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Bank of America added another slice to its growing financial services empire, buying Merrill Lynch in a $50 billion deal that would create a bank offering everything from fixed-income trading to credit card lending
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Lehman Brothers, which filed for bankruptcy Sunday to became the largest casualty of the global credit crisis, is still trying to sell its asset management business, including the crown jewel, Neuberger Berman.
Analysis
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In nearly a century, no Treasury secretary has faced a more difficult financial crisis than the one Henry Paulson is contending with. For months, he and his team have been working around the clock, often seven days a week, trying — in vain — to keep it from deepening, according to the New York Times.
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As regulators and shareholders sift through the rubble of the financial crisis, questions are being asked about what role lavish bonuses played in the debacle.
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Having thrown trillions of dollars at Wall Street, the Fed and Treasury now appear ready to do the same for Main Street by proposing help for the housing market.
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Hatched hastily almost two months ago, the TARP was conceived to stabilize markets and restore investor confidence, but critics argue it is now looking so amorphous and vulnerable to political trade winds, that it is has become almost a constant of uncertainty.
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The US government could be entering a bottomless pit of bailouts if it starts propping up failing companies outside the financial sector—including the struggling auto industry, economists say.
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A committee of five little-known officials at the Treasury Department is picking winners and losers among institutions seeking a slice of the bailout, the New York Times reports.
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With the financial crisis costing investors and taxpayers alike tens of billions of dollars, legislators are in no mood to suffer fat payouts for executives at financial firms taking part in the government bailout.
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The US government mishandled the credit crisis, much as it did Hurricane Katrina three years ago, say crisis management experts.
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Investors and taxpayers angry about the government bailout of seemingly mismanaged financial firms can probably count on criminal indictments in the coming months, experts say.
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The $700 billion financial rescue plan bears little resemblance to the savings and loan bailout almost two decades ago—and may not be as successful, experts say. First and foremost, there’s no accompanying re-regulation of the financial services industry.