<p>I just took a quick look at the front page of the NY Times, and it looks like all holy H-E-double toothpicks is breaking out on Wall St. Not just Lehman Brothers now but Merrill Lynch and AIG are hiccuping too.</p>
<p>[The</a> New York Times - Breaking News, World News & Multimedia](<a href=“http://www.nytimes.com/]The”>http://www.nytimes.com/)</p>
<p>This is the big news of the month and possibly of this fall. We may be on the brink of a big collapse in our financial system. I love how we the taxpayers will pay to rescue these institutions but the taxpayers never get paid back by these institutions when they are making profits.</p>
<p>Yes, the Wall St guys get massive bonuses in good times leaving us with the hangover. That’s why Paulson isn’t backstopping Lehman with Federal money. My guess is that he’s received so much criticism already on the matter. It appears that Bank of America will buy out Merrill so that’s another mess that won’t happen. At least in the near term. And AIG is going to try to restructure.</p>
<p>Gasoline is a wild card. Damage reports on rigs are slowly coming in. Refineries look undamaged but the big problem is electricity. It appears that there was a lot of wind damage to transmission lines.</p>
<p>Then again the banking system might magically fix itself overnight. It sometimes happens. My guess is that it would be good until Washington Mutual coughs up a hairball. Next weekend should be fun too.</p>
<p>Why did Bank of America pay a premium to buy Merrill Lynch?</p>
<p>Also when all the money rushes to Treasury’s will we see lower rates and mortgage rates going to 5% for a 30 year loan?</p>
<p>A bank in our area had a special the other day for a 30 year fixed mortgage at a 3.5% rate. People were camped outside waiting for the bank to open.</p>
<p>tom, I don’t think the BofA has bought Merrill yet. They are still talking.</p>
<p>DocT- what State and do you know the APR- the true rate may have been higher with all the fees included.</p>
<p>Looks like BofA and Merrill have reached a deal, Tom. 44billion. So, Merrill is still worth something-that’s good, I guess.</p>
<p>I heard that it was a done deal at $44 billion ($29/share) but am not sure as to how it will be paid. One place said that it was a stock deal. I think that the reasoning for the deal was that if LEH went under, counterparty risk would imperil MER. It looks like LEH is going under tonight which means that MER has to be saved. I’m sure that MER looks a lot less risky to BAC compared to LEH.</p>
<p>People, companies, countries have long memories on how THEIR money is lost.</p>
<p>FYI, this is what happens when you shrink government to the size of a bathtub and try to drown it. This times 100.</p>
<p>Thanking my lucky stars that our college fund is in a US Treasury account, our mortgage is fixed below 6%, H and I work in local public agencies and only commute 5 miles to work.</p>
<p>Series EE Bonds work well too. Currently paying 4%. Federal tax free if under income limits. And state tax free. You just have to plan waaay ahead. We have a lot in treasuries too.</p>
<p>Pretty much the only asset at true risk for us right now is our 401K/403B retirement accounts. They are mostly in stocks, which have taken a pounding this year. At least we’re still in our mid-40s though.</p>
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<p>Well, this is what happens when aggressive people ignore basic principals of finance, and develop the certainty that the fed and or the taxpayers will always make every boo boo allright.</p>
<p>And when greed trumps reason. Its not new. Has happened regularly. It WILL happen again. Fortunately it sounds like more than a few of you have stayed out of the way of this type of stuff.</p>
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<p>Greed nearly always trumps reason, which is why we have laws, regulations and government. To protect not only individuals but also the economy at large. We all are going to pay a big, big price for the lack of regulation this time around. Greed should not have been allowed to dominate the market for so long. Yes, it is correcting itself, but at what cost to the people who “have stayed out of the way of this type of stuff?”</p>
<p>On This Week with George Stephanopoulos, Greenspan predicted the housing market would start to recover early next year. That’s only 4-6 months away. I wonder what he knows he’s not saying.</p>
<p>“I wonder what he knows he’s not saying.”</p>
<p>He’s been clueless for the last 10 years. Or a liar. He should just retire quietly and let his successors try to clean up after him.</p>
<p>The Fed confirms it will accept a wider range of collateral to help add liquidity to financial markets. Dow futures are down approximately 301 points.</p>
<p>Wow - maybe time to pick up some xlf at the open</p>