A world of woe.
The pas de deux between government and finance picks up the pace Monday, nurturing hopes that the crisis will be smoothed out. By day's end, those hopes are dashed.
Investors are cheered by the news that Citigroup will buy up most assets of Wachovia—obviating the need for government help—and are cautiously optimistic about a bailout plan being approved.
The $700-billion financial rescue bill hammered out over the weekend goes to the House for a vote today; the Senate isn't expected to vote until Wednesday, with Rosh Hashanah, the Jewish new year holiday, on Tuesday.
The Federal Reserve and other central banks announce an extraordinary move this morning: a massive liquidity injectionto try to revive paralyzed credit markets. The Fed says it'll infuse another $330 billion of liquidity into the market. Combined with efforts of other central banks, that means an additional $630 billion of liquidity will be flowing through the market over the next several months.
What You Were Watching:
Later on Monday, hedge-fund managers will have to disclose their short positions to regulators, a move set to give a rare public glimpse into their secretive trading strategies. Hedge funds were singled out for populist rage amid suspicions they helped cause the crisis.
Private equity firms Bain Capital and Hellman & Friedman agree to a deal to buy Lehman Brothers Holdings'prized Neuberger Berman asset management unit and other businesses for $2.15 billion, less than original estimates of its worth.
Now for the bad news.
Morgan Stanley shares fall nearly 8 percent, following news that Japan's biggest bank, Mitsubishi UFJ Financial Group, will take a 21-percent stake in the Wall Street firm.