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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Economy Watch: October 5, 2008 - October 11, 2008

Paulson: U.S. Will Invest in Banks

UPDATED at 7:35 p.m. In remarks to the media just concluded, Treasury Secretary Hank Paulson said the federal government will use the authority it has been granted by the $700 billion Wall Street bailout/rescue law to buy actual stakes in U.S. banks, in addition to merely buying troubled assets off...

By Frank Ahrens  |  October 10, 2008; 7:32 PM ET  |  Permalink  |  Comments (87)
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G-7: No Specifics for Global Credit Rescue

Here is the text of the G-7 joint statement released moments ago here in Washington. Treasury Secretary Hank Paulson is expected to answer questions in about 30 minutes. A quick read of the statement gives the impression that the member nations agree to guidelines for helping unfreeze the global credit...

By Frank Ahrens  |  October 10, 2008; 6:20 PM ET  |  Permalink  |  Comments (11)
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Awaiting Crucial G7 Comments

The G7 is meeting here in Washington right now and a joint statement is expected at about 6 p.m. Treasury Secretary Hank Paulson will hold a press conference at 6:45 p.m. The G7 is made up of the finance ministers from Canada, Italy, England, France, Germany and Japan, along with...

By Frank Ahrens  |  October 10, 2008; 5:40 PM ET  |  Permalink  |  Comments (3)
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The Impossible-To-Please Markets

Watching the last half-hour of trading on Wall Street today was like watching a football game when your team is ahead by a field goal, you've got the ball and you're trying to run out the clock to keep the other team from getting another chance to score. All people...

By Frank Ahrens  |  October 10, 2008; 4:03 PM ET  |  Permalink  |  Comments (11)
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Two Big Financials Getting Hammered

Yesterday, it was America's two largest automakers -- GM and Ford -- that saw their stocks get pummeled. Today, it's two of America's biggest financial institutions -- Morgan Stanley and Goldman Sachs. Goldman is trading down about 17 percent on the day, while Morgan Stanley is trading down 38 percent...

By Frank Ahrens  |  October 10, 2008; 3:30 PM ET  |  Permalink  |  Comments (8)
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Markets Try For Last-Minute Rally

With less than an hour left on a disastrous trading week, Wall Street is trying to mount a face-saving rally. By about 3:20 p.m., the Dow was well up off its session lows, and flirted with rocketing toward even on the day before dropping back down to about 144 points...

By Frank Ahrens  |  October 10, 2008; 3:21 PM ET  |  Permalink  |  Comments (3)
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CNBC's Burnett Forecasts Sunshine

CNBC's Erin Burnett has taken on the role of Miss Sunshine, trying hard to look for any silver lining in the current crisis, God love her. When teasing a story on crashing General Motors this afternoon, Burnett said: "Why is everyone so obsessed about this story? GM has been in...

By Frank Ahrens  |  October 10, 2008; 2:44 PM ET  |  Permalink  |  Comments (2)
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Lehman Swaps Settling for Pennies on Dollar

UPDATED AT 3:02 p.m. The Lehman auction has concluded and set a price of 8.625 cents on the dollar for the debt. That means sellers of credit-default protection will have to pay holders 91.375 cents on the dollar, setting up the biggest-ever payout in the $55 trillion market, Bloomberg writes....

By Frank Ahrens  |  October 10, 2008; 11:31 AM ET  |  Permalink  |  Comments (23)
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Motley Fool: Good Time To Start a 401(k)

Let's say you're a young employee just starting out in your first job or you're a mid-career employee who -- for some reason -- has never started a retirement savings plan. We wondered: With the market so low, and with so many stocks so cheap, is now a good time...

By Frank Ahrens  |  October 10, 2008; 11:20 AM ET  |  Permalink  |  Comments (5)
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Bush: 'U.S. Government Is Acting'

In remarks just concluded at the White House, President Bush said the economic crisis is being driven by "uncertainty and fear" and has been "deeply unsettling for the American people." Bush reiterated the actions the government has taken so far -- the $700 billion Wall Street bailout/rescue plan, the Fed's...

By Frank Ahrens  |  October 10, 2008; 10:41 AM ET  |  Permalink  |  Comments (11)
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The Dow's Whiplash

That cheering sound you may have heard in the distance right now, regardless of where you're sitting, was emanating from the trading floor of the New York Stock Exchange, where the Dow -- after shedding hundreds of points at opening and falling below 8,000 points -- crossed into positive territory....

By Frank Ahrens  |  October 10, 2008; 10:20 AM ET  |  Permalink  |  Comments (2)
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Where Is the Bottom?

Analysts seem to agree that this massive stock sell-off we're experiencing was a necessary purge, or "flush" in a system corrupted by sharp dealing and denial. But where will it end? Just a year ago, people were swapping tips on best to grow your nest egg, or which stocks were...

By Frank Ahrens  |  October 10, 2008; 9:23 AM ET  |  Permalink  |  Comments (8)
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Morning Briefing

It's ugly out there. Following yesterday's plunge in the U.S. stock markets, the markets overseas are following suit across the board. In Asia, the Nikkei had its second huge drop in a row -- 9.6 percent -- resulting in a 25 percent loss in the last five days. The Hang...

By Sara Goo  |  October 10, 2008; 7:31 AM ET  |  Permalink  |  Comments (4)
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GM: Bankruptcy 'Not An Option'

General Motors, which saw shares of its stock plummet 31 percent in today's trading, spurring speculation that the cash-strapped auto giant might be edging toward bankruptcy, released this statement: "Clearly we face unprecedented challenges related to uncertainty in the financial markets globally and weakening economic fundamentals in many key markets....

By Frank Ahrens  |  October 9, 2008; 7:16 PM ET  |  Permalink  |  Comments (36)
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Bush To Reassure Public Tomorrow A.M.

President Bush, who has said little publicly during this week's prolonged market dive, will make a statement about the crisis Friday morning in the Rose Garden, the White House said late today. Press secretary Dana M. Perino said Bush will "assure the American people that they should be confident that...

By Frank Ahrens  |  October 9, 2008; 7:10 PM ET  |  Permalink  |  Comments (5)
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Wachovia-Citi-Wells Talks Collapse

Citi said moments ago that its takeover talks with Wells Fargo and Wachovia to split up Wachovia have collapsed. Citi believed it had struck a deal to buy Wachovia, which turned around and signed a merger agreement with Wells Fargo. Lawsuits ensued. All parties agreed to stop suing each other...

By Frank Ahrens  |  October 9, 2008; 6:40 PM ET  |  Permalink  |  Comments (0)
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Bush: 'We'll Get Through This Deal'

President Bush said little today about the ongoing financial crisis, offering some vague words of reassurance at unrelated public events, The Post's Dan Eggen reports. He assured the president of Slovakia that the administration would continue to take "strong action," and said he was "confident in our economy's long-term prospects"...

By Frank Ahrens  |  October 9, 2008; 4:42 PM ET  |  Permalink  |  Comments (18)
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Dow Sinks Below 9,000 For First Time In Five Years

The early day gains on Wall Street have been long erased and replaced by steep losses, pushing the Dow below 9,000 for the first time since June 2003. Starting the final hour of trading today, the Dow is down nearly 300 points, or 3 percent. The S&P 500 is down...

By Frank Ahrens  |  October 9, 2008; 3:16 PM ET  |  Permalink  |  Comments (1)
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What Will It Take To Save GM?

Even Wall Street analysts are surprised by the pummeling being absorbed today by the world's biggest automaker (for now). Shares of General Motors are trading down nearly 18 percent on the day at less than $6 per share. That means the company's value, or market capitalization -- share price times...

By Frank Ahrens  |  October 9, 2008; 3:09 PM ET  |  Permalink  |  Comments (105)
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Tomorrow's Lehman Auction: Why You Should Care

Tomorrow, the credit default swaps backed by bankrupt investment bank titan Lehman Brothers will be settled. What does that mean and why should you care? The credit default swaps -- along with the mortgage-backed securities you've been reading so much about -- were one of the financial instruments at the...

By Frank Ahrens  |  October 9, 2008; 3:04 PM ET  |  Permalink  |  Comments (2)
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Discussions

By Bob Greiner  |  October 9, 2008; 1:40 PM ET  |  Permalink  |  Comments (0)
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AIG Cancels Second Lux Retreat

Bad news for some at AIG: The big company-paid trip to the Ritz-Carlton in Half Moon Bay, Calif., was canceled this morning. The cancellation comes two days after a congressional committee blasted the company for paying $440,000 for a similar hotel retreat just a week after the federal government offered...

By Frank Ahrens  |  October 9, 2008; 1:38 PM ET  |  Permalink  |  Comments (40)
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Quotables

A program as large and complex as this would normally take months -- or even years -- to establish...We don't have months or years." Neel Kashkari, interim assistant Treasury secretary for financial stability....

By Bob Greiner  |  October 9, 2008; 1:33 PM ET  |  Permalink  |  Comments (1)
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In Today's Paper

Headline Goes Here Joe Reporter and Jane Reporter Headline Goes Here Joe Reporter and Jane Reporter Headline Goes Here Joe Reporter and Jane Reporter Headline Goes Here Joe Reporter and Jane Reporter Headline Goes Here Joe Reporter and Jane...

By Bob Greiner  |  October 9, 2008; 1:32 PM ET  |  Permalink  |  Comments (0)
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Bank Failures

Bank Failures On March 12, 1933, Roosevelt delivers the first of his fireside chats from the White House on the banking crisis. He chides the "hysterical demands of hoarders" and assures listeners "it is safer to keep your money in...

By Bob Greiner  |  October 9, 2008; 1:13 PM ET  |  Permalink  |  Comments (0)
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Consequences of the Crisis

This is the bust in the boomtown that banks built Few American cities prospered more over the last two decades than Charlotte, its growth propelled and gilded by Wachovia and its cross-town rival, Bank of America. Now Charlotte is suffering,...

By Bob Greiner  |  October 9, 2008; 12:57 PM ET  |  Permalink  |  Comments (0)
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Crisis 101

THE BREAKDOWN: Origins of the crisis Examining the history of today's financial crisis: How risky mortgage lending fueled the housing market boom and subsequent collapse, in turn spurring more than $500 billion in losses at U.S. banks.Launch Narrated Slideshow...

By Bob Greiner  |  October 9, 2008; 12:42 PM ET  |  Permalink  |  Comments (0)
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Ticker Test

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By Bob Greiner  |  October 9, 2008; 12:41 PM ET  |  Permalink  |  Comments (0)
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Debt Clock Out of Numbers

The national debt clock, which hangs on a wall in Times Square (right next to an IRS office, by the way), has been recording the national debt since 1989 and was the brainchild of late, puckish Manhattan developer Seymour Durst. Now, the debt is so high, the clock has...

By Frank Ahrens  |  October 9, 2008; 12:23 PM ET  |  Permalink  |  Comments (3)
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Report: Wachovia-Citi-Wells Talks Hit Snag

The Wall Street Journal is reporting that the messy three-way talks between Wachovia, Citigroup and Wells Fargo are stalling over several issues. The three parties agreed to stop suing each other until tomorrow over the deal, which began when it looked like Citi would buy Wachovia, only for Wachovia to...

By Frank Ahrens  |  October 9, 2008; 10:58 AM ET  |  Permalink  |  Comments (2)
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Wall Street Zooms Out of the Gate

We wouldn't start singing "Happy Days Are Here Again" just yet, but the markets have opened strong across the board today. About 30 minutes into the trading day, the Dow is up about 75 points, or a little less than 1 percent, off of its high so far today of...

By Frank Ahrens  |  October 9, 2008; 10:02 AM ET  |  Permalink  |  Comments (5)
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Wall Street Shifts Focus to Earnings

Third-quarter earnings are underway this week, and they provide a better look at the economy's underlying fundamentals than the toxic assets that have dominated the headlines and Tasered the markets for the past few weeks. Yesterday, aluminum giant Alcoa said its third-quarter profit had dropped 52 percent, sending shares of...

By Frank Ahrens  |  October 9, 2008; 9:24 AM ET  |  Permalink  |  Comments (3)
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Morning Briefing

Relative calm has returned to the markets overseas this morning. In Europe, stocks returned to positive territory pretty much across the board. The DJ Stoxx index is flat so far in trading today, and London's FTSE is up 1 percent. The government of Iceland took over the country's largest bank...

By Sara Goo  |  October 9, 2008; 7:19 AM ET  |  Permalink  |  Comments (0)
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AIG Gets More Government Bailout Cash

Only one day after it was revealed that AIG had sprung for a $440,000 spa vacation shortly after getting an $84 billion government-loan bailout comes this report: The government is loaning AIG another $38 billion. AIG, the world's largest insurer, said it has already drawn down $61 billion on its...

By Frank Ahrens  |  October 8, 2008; 6:34 PM ET  |  Permalink  |  Comments (100)
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Investor Advice From the Motley Fool

We called Alexandria-based Motley Fool, which has been advising individual investors like you for 15 years and asked senior analyst Tim Hanson our Wildly Popular Five Questions: 1. What's the one thing individual investors should keep in mind during these turbulent times? Hanson: Don't panic. While this may seem like...

By Frank Ahrens  |  October 8, 2008; 5:08 PM ET  |  Permalink  |  Comments (12)
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Markets Dive Following Paulson Remarks

A day that began with a 200-point loss on the Dow -- losses that were largely recovered during trading -- ended with a 189-point loss in a sudden dive in the 15 minutes following the conclusion of remarks by Treasury Secretary Hank Paulson, who delivered a "here's where we are"...

By Frank Ahrens  |  October 8, 2008; 4:15 PM ET  |  Permalink  |  Comments (6)
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Paulson: 'Significant Challenges Remain'

UPDATED AT 3:45 p.m. In a speech just concluded, Treasury Secretary Hank Paulson said, "Although we are facing particularly difficult circumstances, I remain confident that we will work through these challenges, as we have always successfully worked through every economic challenge in the history of the United States." Other highlights...

By Frank Ahrens  |  October 8, 2008; 3:48 PM ET  |  Permalink  |  Comments (4)
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Pelosi: More Economic Stimulus Needed

House Speaker Nancy Pelosi (D-Calif.) said today that taxpayers need a second economic stimulus plan, this one to the tune of $150 billion. The House passed a $61 billion kick-start plan last month but a similar proposal stalled in the Senate. President Bush has promised to veto such a measure....

By Frank Ahrens  |  October 8, 2008; 3:02 PM ET  |  Permalink  |  Comments (3)
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Wachovia, Wells Fargo, Citigroup Extend No-Lawsuit Period

Wachovia, Wells Fargo and Citigroup, which had agreed to suspend pending litigation among each other through noon today, said moments ago they would now refrain from suing each other until 8 a.m. Friday, The Post's Binyamin Appelbaum reports. The story: Citigroup thought it had a deal wrapped up to buy...

By Frank Ahrens  |  October 8, 2008; 1:23 PM ET  |  Permalink  |  Comments (1)
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Good News, Bad News on Economy

If we can take a moment to look away from Wall Street's gyrations and focus on the underlying, or real, economy, there were a couple developments this morning that had a good news/bad news aspect to them. On housing, the good news: The National Association of Realtors showed a surprise...

By Frank Ahrens  |  October 8, 2008; 10:28 AM ET  |  Permalink  |  Comments (12)
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Wall Street Dives at Open, Recovers Quickly

Don't walk away from your desk -- you'll miss a 300-point Dow swing. Wall Street is veering around like a Saturday night drunk. Assuming that Saturday night drunk is driving a Formula One race car. After diving 200 points in the opening seconds -- forget minutes -- the Dow is...

By Frank Ahrens  |  October 8, 2008; 10:10 AM ET  |  Permalink  |  Comments (1)
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Fear Rules Wall Street in Opening

Wall Street is spastic with fear and trading hasn't even opened yet. Futures have been all over the map. They were up following the rate cut and now they've just taken a pre-bell dive. CNBC anchor Mark Haines just looked up at his monitor showing the S&P 500 futures and...

By Frank Ahrens  |  October 8, 2008; 9:25 AM ET  |  Permalink  |  Comments (1)
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Five Questions for CNBC's Erin Burnett

CBNC's Erin Burnett has become one of the faces of the current financial crisis, thanks to her seemingly omnipresent perch on the business network, anchoring two daily shows and doing live standups from Washington. A screenshot of CNBC's Erin Burnett, one of the faces of the financial crisis. (Courtesy of...

By Frank Ahrens  |  October 8, 2008; 8:15 AM ET  |  Permalink  |  Comments (3)
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Morning Briefing

Will a coordinated interest rate cut this morning turn the tide? Before this morning's rate cut announcement, it was getting really ugly. In Japan, the Nikkei closed down nearly 9.4 percent, the biggest drop since Black Monday back in 1987. Investors remain concerned about the economy, and in particular about...

By Sara Goo  |  October 8, 2008; 7:29 AM ET  |  Permalink  |  Comments (2)
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What should I do with my retirement accounts if I plan to retire in five years? In 10 years? In 20 years?

Tim Hanson, senior analyst at the Motley Fool: If you're retiring within the next five years, I'd make sure you have a sound asset allocation strategy that has your savings stashed in 70 percent to 80 percent bonds and treasuries...

By washingtonpost.com Editor  |  October 8, 2008; 7:05 AM ET  |  Permalink  |  Comments (0)
Categories:  Your Pocketbook  | Tags: retirement  
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Some advisers are encouraging people to take 10 or 20 percent out of their stocks and put it in an interest-bearing savings account. What do you think?

Tim Hanson, senior analyst at the Motley Fool: That depends on when you need the money. If this is cash that you've had in the stock market but that you need to pay your bills over the next 12 to...

By washingtonpost.com Editor  |  October 8, 2008; 7:00 AM ET  |  Permalink  |  Comments (1)
Categories:  Your Pocketbook  | Tags: investing, stocks  
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Is there any such thing anymore as a "safety stock?"

Tim Hanson, senior analyst at the Motley Fool: In the short-term, there is no such thing as a "safety stock." But that was never the case. If you're willing to take a long-term view, however, there is no better place...

By washingtonpost.com Editor  |  October 8, 2008; 7:00 AM ET  |  Permalink  |  Comments (0)
Categories:  Your Pocketbook  | Tags: stocks  
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What's the one thing individual investors should keep in mind during these turbulent times?

Tim Hanson, senior analyst at the Motley Fool: Don't panic. While this may seem like a once-in-a-lifetime event (and in its intensity, it's getting close), the fact of the matter is that the stock market cycles through boom and bust...

By washingtonpost.com Editor  |  October 8, 2008; 7:00 AM ET  |  Permalink  |  Comments (0)
Categories:  Your Pocketbook  | Tags: investing  
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I was thinking about doing some home renovations. Should I go ahead or not?

Tim Hanson, senior analyst at the Motley Fool: Again, that depends on your individual situation. My wife and I are actually planning on doing something with our basement in the near-term, but we've dialed back our plans. If you have...

By washingtonpost.com Editor  |  October 8, 2008; 7:00 AM ET  |  Permalink  |  Comments (0)
Categories:  Your Pocketbook  | Tags: home renovation  
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AIG Says Resort Trip Was Reward for Employees

AIG has issued a clarification to the report that its executives enjoyed a luxury hotel stay a week after the federal government threw them an $85 billion lifeline. The gathering was a previously planned reward for life insurance agents, a spokesman for the company said, and fewer than 10 AIG...

By Sara Goo  |  October 7, 2008; 4:52 PM ET  |  Permalink  |  Comments (34)
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Wall Street Dives To Close

With about 10 minutes left on the trading day, the markets continue to shed value. The Dow is down nearly 400 points, or about 4 percent. The S&P 500 and Nasdaq are both down about 4.5 percent. The markets were buoyed, briefly, by the Fed's announcement this morning that it...

By Frank Ahrens  |  October 7, 2008; 3:50 PM ET  |  Permalink  |  Comments (12)
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Joe Cassano: The Man Who Brought Down AIG?

Moments ago, members of the House oversight committee concluded their hammering of the two most recent AIG chief executives. Topic: Joe Cassano, the man who some credit with bringing down the insurance giant. Cassano was president of AIG's financial products division, which trafficked in the credit-default swaps, or CDS, which...

By Frank Ahrens  |  October 7, 2008; 2:53 PM ET  |  Permalink  |  Comments (36)
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Wachovia Chief: Customers Are Okay

In a letter from Wachovia Securities chief executive Danny Ludeman to his banking and brokerage clients yesterday, Ludeman said: "The most important thing to bear in mind is that your relationship with your financial adviser will not change," adding that the company's headquarters will remain in St. Louis. Ludeman wrote...

By Frank Ahrens  |  October 7, 2008; 1:40 PM ET  |  Permalink  |  Comments (2)
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Former AIG Chief Blames Mark-to-Market

Former AIG chief executive Martin Sullivan (headed AIG from 2005-2008) is testifying before the House oversight committee and moments ago blamed the so-called "mark-to-market" accounting rules for much of AIG's decline. Quick tutorial: Mark-to-market accounting requires companies to value assets on their books at the price they would sell for...

By Frank Ahrens  |  October 7, 2008; 12:58 PM ET  |  Permalink  |  Comments (6)
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Ninjas at AIG Hearing

At the AIG hearing underway on the Hill before the House oversight committee, New York State insurance regulator Eric Dinallo referred to the "NINJAs" of the current financial crisis, the slang term given by shady lenders to people who should never have gotten subprime -- or any kind of --...

By Frank Ahrens  |  October 7, 2008; 11:57 AM ET  |  Permalink  |  Comments (2)
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AIG Hearing: Where's Hank?

Conspicuously absent from the hearing underway into the AIG bailout before the House Oversight committee is Maurice R. "Hank" Greenberg, AIG's longtime chief executive. Greenberg was forced out by AIG's board in 2005 following fraud charges brought by former New York attorney general Eliot Spitzer, who was forced to step...

By Frank Ahrens  |  October 7, 2008; 11:05 AM ET  |  Permalink  |  Comments (4)
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N.Y. Official: AIG Veered from 'Core'

At testimony underway right now on Capitol Hill before Rep. Henry Waxman's (D-Calif.) House Oversight committee, Eric Dinallo, the superintendent of the New York State Insurance Dept., said AIG's troubles came when the insurance giant "got well away from its core competency of insurance." Dinallo said AIG got too far...

By Frank Ahrens  |  October 7, 2008; 10:44 AM ET  |  Permalink  |  Comments (1)
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After Bailout, AIG Executives Head to Resort

UPDATED: 11:31 a.m. Less than a week after the federal government offered an $85 billion bailout to insurance giant AIG, the company held a week-long retreat for its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running up a tab of $440,000, Rep. Henry Waxman (D-Calif.) said...

By Sara Goo  |  October 7, 2008; 10:29 AM ET  |  Permalink  |  Comments (510)
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Markets Rally to Open, IMF Weighs In

Wall Street opened strong in its first few moments of trading, with the Dow shooting up more than 130 points, or about 1.3 percent, by 9:45 a.m. The S&P 500 was up about 1.2 percent and the Nasdaq up about .7 percent. Meanwhile, the International Monetary Fund decided to see...

By Frank Ahrens  |  October 7, 2008; 9:51 AM ET  |  Permalink  |  Comments (1)
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Another Wild Day on Wall Street?

How strange have the times become? A 500-point rally by the Dow brings it back to being down only 349 points. That's how strange. It makes sense for regular folks who have 401(k)s to have rooted for yesterday's afternoon rally, hoping that the Dow would get back to at least...

By Frank Ahrens  |  October 7, 2008; 9:33 AM ET  |  Permalink  |  Comments (1)
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Morning Briefing

After U.S. stocks took a bungee jump yesterday, the markets overseas were mixed as foreign governments took their own steps to address the financial crisis. In Australia, the central bank cut interest rates by one percent, the biggest rate cut in 16 years. The move seemed to bolster the hopes...

By Sara Goo  |  October 7, 2008; 7:21 AM ET  |  Permalink  |  Comments (1)
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Wachovia Litigation at Self-Imposed Standstill

Three companies that have been at each others legal throats for several days have agreed to what they collectively call "a standstill of all formal litigation activity." The deal was made in consultation with the Federal Reserve, according to a statement on Wachovia's web site. The standstill lasts until Wednesday...

By Michael S. Rosenwald  |  October 6, 2008; 4:59 PM ET  |  Permalink  |  Comments (2)
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Wild Day on Wall Street

The roller coaster metaphor for describing stock market activity has become, considering everything we have gone through over the last month, a cliche. So we will dispense with the roller coaster -- goodbye roller coaster! -- and describe today's market activity as a bungee cord jump from a very high...

By Michael S. Rosenwald  |  October 6, 2008; 4:07 PM ET  |  Permalink  |  Comments (2)
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Records Drops Around the World

Though the Dow Jones industrial average is now down around 550 points, or 5.3 percent, at one point today it fell 782 points -- a record for a one-day decline. Across the pond in London, the FTSE 100 fell 7.9 percent, or 391.1 points, the largest drop since Black Monday...

By Michael S. Rosenwald  |  October 6, 2008; 3:26 PM ET  |  Permalink  |  Comments (1)
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How Far Down Until Trading Halts?

We're not there yet, but today's precipitous drop on the Dow Jones industrial average -- more than 700 points or 7 percent -- prompts an interesting question. Just how bad would it have to get for the New York Stock Exchange to halt trading? Well, it depends. According to the...

By Sara Goo  |  October 6, 2008; 3:16 PM ET  |  Permalink  |  Comments (5)
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U.S. Stocks in Free Fall

The Dow Jones industrial average has fallen by record amounts four times in the last month and appears ready to set another record today, falling more than 700 points, or over seven percent, so far today. The record percentage drops for the Dow: 10/19/87 -- 22.61% 10/27/97 -- 7.18% 9/17/01...

By Sara Goo  |  October 6, 2008; 2:54 PM ET  |  Permalink  |  Comments (4)
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Waxman Asks Fuld: 'Is this fair?'

As expected, the House Oversight and Government Reform Committee -- led by chairman Henry Waxman -- has had tough questions for Lehman Brothers CEO Richard Fuld. Waxman displayed a chart showing that Fuld had received about $480 million in total compensation during the last seven years. Waxman then said Lehman's...

By Michael S. Rosenwald  |  October 6, 2008; 1:25 PM ET  |  Permalink  |  Comments (12)
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Fuld Testimony Begins

Lehman CEO Richard Fuld, testifying before House Oversight and Government Reform Committee, said that he takes "full responsibility for the decisions that I made and for the actions that I took based on the information we had at the time." He also said that with the benefit of hindsight, he...

By Michael S. Rosenwald  |  October 6, 2008; 12:59 PM ET  |  Permalink  |  Comments (7)
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World Bank President: Include Developing Countries in Economic Plans

The Post's Neil Irwin reports that World Bank President Robert B. Zoellick said today that the financial crisis could dampen global enthusiasm for free markets, and he proposed a new approach to international cooperation on financial issues. Major developing nations should be included in the efforts of the seven major...

By Michael S. Rosenwald  |  October 6, 2008; 12:28 PM ET  |  Permalink  |  Comments (4)
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Bush Addresses Steep Market Drop

With the Dow down more than 400 points and investors around the world wondering why the approval of the $700 billion bailout hasn't started to turn around the markets, President Bush today told reporters "it's going to take a while" for the rescue plan to work. "We don't want to...

By Michael S. Rosenwald  |  October 6, 2008; 12:17 PM ET  |  Permalink  |  Comments (13)
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Waxman Takes on Lehman CEO at Hearing

The House Oversight and Government Reform Committee hearing into the collapse of Lehman Brothers is underway, and if chairman Henry Waxman's opening statement is indicative of how he will handle the testimony of Lehman CEO Richard Fuld, we could be in for some real fireworks. In his statement, Waxman said,...

By Michael S. Rosenwald  |  October 6, 2008; 11:02 AM ET  |  Permalink  |  Comments (4)
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Waxman Opens Hearing into Lehman Collapse

Having passed the $700 billion bailout bill last week, most members of Congress are now back in their Districts campaigning. But not members of the House Oversight and Government Reform Committee. They stuck around to hold a hearing this morning on the collapse of Lehman Brothers. Lehman Brothers, you probably...

By Michael S. Rosenwald  |  October 6, 2008; 10:15 AM ET  |  Permalink  |  Comments (0)
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Stocks Down 2 Percent at Market Open

With European and Asian markets tumbling overnight, the U.S. markets weren't far behind. The Dow opened down almost 2 percent, losing 200 points. The Dow is now down 29 percent from this time last year. The Nasdaq is down more than 2 percent, or 42 points. The S&P 500 is...

By Michael S. Rosenwald  |  October 6, 2008; 9:42 AM ET  |  Permalink  |  Comments (1)
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What the Fed's New Action this Morning Means

The Post's Neil Irwin reports that Federal Reserve just announced new steps to inject cash into the financial system, another expansion of its efforts to get banks to stop hoarding cash. The Fed said it will immediately take advantage of authority it was granted in the financial rescue package...

By Michael S. Rosenwald  |  October 6, 2008; 9:36 AM ET  |  Permalink  |  Comments (1)
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Morning Briefing

Week one after the $700 billion bailout bill becomes law and the overseas markets have this reaction: Sell! In Asia, the markets were down from 4 percent to more than 6 percent. In Europe, the DJ Stoxx index fell 5 percent as Germany announced a $69 billion rescue plan with...

By Sara Goo  |  October 6, 2008; 7:17 AM ET  |  Permalink  |  Comments (1)
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