left right politics showbiz tech invest good life gossip fun hot
Mother Jones Hot Air Huffpo Variety Engadget Seeking Alpha Lifehacker TheSuperficial Daily Beast reddit
Daily Kos Michelle Malkin Politico Billboard Boing Boing TheBigPicture Luxist TMZ.com Fark BuzzFeed
ThinkProgress RightWingNews First Read CNN Showbiz Gizmodo FT Alphaville Joystiq Perez Hilton 4chan memorandum
Crooks+Liars Power Line CNN ticker E! Online Techcrunch Josh Brown Kotaku gamer Bastardly Post Secret Techmeme
TalkngPtsMemo Ameri..Thinker Swampland TV Guide Ars Technica 24/7 Wall St. TreeHugger Egotastic hascheezburgr Drudge
The Raw Story NewsBusters The Caucus Ent. News Mashable bloggingstocks Consumerist PinkIsTheNew dooce digg
Wonkette Wizbang fishbowlDC HlywdWiretap Google blog DealBook lifehack.org CelebrityBaby Someth'nAwful trends
Atrios Taki Magazine WashWhisprs DeadlnHllywd Read/Write Jeff Matthews 43folders GoFugYourself Neatorama PSFK
Firedoglake Big Hollywood The Fix MSN Ent. OReilly Radar PhilsStockWorld Autoblog Page Six Cool Hunter BBC
Young Turks IMAO Capital Gains Rot'nTomatoes GigaOM Daily Rec'ng Deadspin BestWeekEver stereogum Timespop
Americablog AceOfSpades Open Secrets Cinematical ProBlogger Zero Hedge DownloadSqd Dlisted CuteOverload media eye
Politicususa Redstate WikiLeaks law Cool Tools Bespoke MediaZone PopSugar Dilbert blog TVNewser
CounterPunch Jawa Report econ law.alltop Scobleizer BtwTheHedges Deviant ArtHollyw'dTuna gapingvoid BuzzMachine
TalkLeft Patterico EconLog Volokh Consp. Apple Blog Minyanville Gothamist x17online DailyGrail MediaGazer
Feministing Townhall.com Freakonomics Legal Insurrec.. Valleywag Fast Money Curbed DailyBlabber Prof. Hex Steve Rubel
PolitAnimal OutsideBeltwy CrookedTimbr Conglomerate mozillaZine RealClearMkts FabSugar Gawker OvrheardinNY MediaBlgNRO
Truthdig Moonbattery MarginalRevo SportsLawBlog Smashing W$J Mktbeat Gridskipper Radar Last.fm Threat Level
Alternet RealClearPoli crime W$J Law BlogTechdirt AbnormalRtrns Material Defamer kottke.org Seth's blog
Media Matters Instapundit CrimeblogsBalkinizationMAKE RandomRoger Sartorialist Jossip PumpkinChuckin mediamatters
The Nation Hugh Hewitt All Crime Credit Slips SrchEngLand Stock Advisors Drink'nMadeEasy Just Jared Maps Mania Newshounds
Maddow Blog PJ Media Smoking Gun FindLaw VentureBeat Slope of Hope Mark Cuban Celebitchy CollegeHumor FAIR

Tuesday, October 28, 2008

Credit Crisis Batters Confidence

Items of Interest:

Give me that old time panic

A swarm gathers on Wall Street during the bank panic in October 1907Wikipedia:
Panic of 1907 -- The Panic of 1907, also known as the 1907 Bankers' Panic, was a financial crisis that occurred in the United States when the New York Stock Exchange fell close to 50 percent from its peak the previous year. Panic occurred during a time of economic recession, when there were numerous runs on banks and trust companies. The 1907 panic eventually spread throughout the nation when many state and local banks and businesses entered into bankruptcy. Primary causes of the run include a retraction of market liquidity by a number of New York City banks, loss of confidence among depositors, and the absence of a statutory lender of last resort...

The panic would have deepened if not for the intervention of financier J. P. Morgan, who pledged large sums of his own money, and convinced other New York bankers to do the same, to shore up the banking system. At the time, the United States did not have a central bank to inject liquidity back into the market. By November the contagion had largely ended...
Consumer Confidence in U.S. Plunged to Record Low -- U.S. consumer confidence fell to the lowest level on record in October as stocks plunged and banks shut off credit, raising the risk spending will tumble. The Conference Board's confidence index decreased to 38, less than forecast and the lowest reading since monthly records began in 1967, the New York-based research group said today...
U.S. consumer confidence plunges to record low -- Job, economic worries worsen as financial crisis takes toll ...

Jason Goepfert / Minyanville:
Lack of Confidence -- The plunge in Consumer Confidence is getting a lot of attention, but it might pay to step back and see what that has meant before. The previous troughs in Confidence were in December 1974 (43.2), May 1980 (50.1), October 1982 (54.3) and February 1992 (47.3). By six months later the S&P 500 was higher every time by an average of +21.1%.

On the other hand, Confidence reached its all-time high in May 2000 (144.7), and October 1968 (142.3) prior to that. You wouldn't have exactly been happy holding stocks after those instances...after a year, the S&P was down both times by an average of -8.8%...
Home Prices in 20 U.S. Cities Fell From Year Ago -- House prices in 20 U.S. cities declined at the fastest pace on record as foreclosures climbed before the credit crisis deepened this month.

The S&P/Case-Shiller home-price index dropped 16.6 percent in August from a year earlier, as forecast, after a 16.3 percent decline in July. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.

The decrease in property values, which helped boost sales last month to the highest level of the year, will probably intensify in coming months as the latest tightening of credit markets threatens to dry up mortgage financing. Prolonged price declines may push even more houses into foreclosure, weakening consumer spending and the economy...
WSJ blog: A Look at Case-Shiller Numbers, by Metro Area
CNNMoney: Home prices see another record plunge
Capital One, Key Among 19 Banks Getting $35 Billion -- At least 19 regional U.S. banks, including SunTrust Banks Inc. and Capital One Financial Corp., accepted $35 billion in government cash as the Treasury rolled out the second half of its $250 billion package to shore up lenders and thaw frozen credit markets.

Treasury Secretary Henry Paulson is doling out cash to recapitalize struggling lenders and jump-start takeovers in an industry suffering from the worst housing crisis since the Great Depression. SunTrust, Capital One, KeyCorp and PNC Financial Services Group Inc. are among regional lenders that have agreed to take cash so far by selling preferred shares to the U.S...

Niagara Falls, Beverly Hills

The latest U.S. banks to benefit from the government's Troubled Asset Relief Program, or TARP, spanned the nation, ranging from City National Corp., in Beverly Hills, California, to First Niagara Financial Group Inc., based in upstate New York near Niagara Falls. The banks may be joined by life insurance companies, some of which are now in talks with the government about potential Treasury investments...

Following are banks that have announced participation in the Treasury program:

Citgroup $25 billion
Wells Fargo $25 billion
JPMorgan Chase $25 billion
Bank of America $15 billion
Merrill Lynch $10 billion
Goldman Sachs $10 billion
Morgan Stanley $10 billion
Bank of New York $3.0 billion
State Street $2.0 billion
TOTAL $125 billion

PNC $7.7 billion
Capital One $3.6 billion
SunTrust $3.5 billion
Regions Financial $3.5 billion
Fifth Third $3.4 billion
BB&T $3.1 billion
KeyCorp $2.5 billion
Comerica $2.25 billion
Northern Trust $1.5 billion
Huntington $1.4 billion
First Horizon $866 million
City National $395 million
Valley National $330 million
Washington Federal $230 million
UCBH Holdings $298 million
First Niagara $186 million
Old National $150 million*
HF Financial $25 million
Redding Bank $17 million
Provident --**
TOTAL $34.93 billion (35.18)

*Old National hasn't decided whether to participate.
**Provident didn't say how much it expects.
Deal Journal / Wall Street Journal:
Terrible Ideas of the Financial Crisis: Goldman Sachs and Citigroup -- There are bad ideas that seemed like a good idea at the time. Then there are bad ideas that didn’t make sense from the beginning. That is pretty much most of the big merger ideas rumored in the past six weeks.

Take, for example, Goldman Sachs Group CEO Lloyd Blankfein’s call to Citigroup Vikram Pandit to sound out the possibility of a combination of the two companies, as reported by the FT, and note that the call took place in the panic-filled week just after Lehman Brothers Holdings filed for bankruptcy and Merrill Lynch ran into the arms of Bank of America...
Words to remember...

Dean Barnett:
The Plucky Smart Kid with the Fatal Disease --
As I grew sicker, I had what for me was an extremely comforting insight. I came to view serious and progressive illness as an ever constricting circle with oneself at the center. The interior of the circle represents the contents of one’s life. As the circle gets smaller, things that were inside get forced out. Some of these things are dearly missed; others that were once thought precious get forced to the exterior and turn out to go surprisingly unlamented.

At the innermost point of the circle are the things that really matter: family, faith, love. These things stay with you until the day you die. At the very end, because the circle has shrunk down to its center, they’re all you have left. But as we approach that end, we finally realize that all along, they were what mattered most. As a consequence, life often remains beautiful and worthwhile right up until the end...
William Kristol / Weekly Standard:
Dean Barnett, 1967-2008 — It's my sad duty to report that our good friend and valued contributor Dean Barnett passed away today. He was a remarkable man—principled, witty, and to all of us, a model of grace and courage. We mourn his passing and cherish his memory.

Hugh Hewitt / Townhall.com:
Farewell, Dean
— My friend and colleague Dean Barnett died today, and the world is a much poorer place for it. As anyone who listened to him on my radio show or read his work at Soxblog, here or at the Weekly Standard knows, and as everyone who had the great, great pleasure of knowing Dean will attest …

John Podhoretz / Commentary Magazine: Dean Barnett, 1967-2008
The Hill's Blog Briefing Room: DAY'S END ROUNDUP
Michelle Malkin: Dean Barnett, R.I.P.
Sean Hackbarth / The American Mind: DEAN BARNETT, R.I.P.
Andrew Sullivan / The Daily Dish: Dean Barnett, RIP
iowahawk: Dean Barnett, 1967-2008 — I am deeply saddened to learn …
Achenblog: Dean Barnett
Allahpundit / Hot Air: Horrendous: Dean Barnett passes away
Spencer Ackerman / ATTACKERMAN: If I Ever Thought About It
Bookworm Room: Dean Barnett, RIP
Baseball Crank: Dean Barnett, Rest in Peace
The Wide Awake Cafe: Dean Barnett, Already Missed
Kathy Shaidle / five feet of fury.: Dean Barnett: 1967 - 2008 (with updates)
Patrick Ruffini / The Next Right: Dean Barnett, RIP

Calculated Risk

MishTalk - Mike Shedlock

Paul Krugman - NY Times

The Big Picture - Barry Ritholtz

naked capitalism - Yves Smith

Pragmatic Capitalism

Washington's Blog

Safe Haven

Paper Economy

The Daily Reckoning - Australia