September 19, 2008 at 10:49 pm
· Filed under Market News ·Tagged 1987 market crash, AIG, Bank of America, bankruptcy, DJIA, dmz, Dow Joes, Federal Reserve, Lehman Brothers, merger, Merrill Lynch, short selling, short selling ban, shotgun merger, takeover
Source: Wall Street Journal
Synopsis:
- American financial system has undergone a complete reshaping. More changes expected in the coming years.
- Current events “eclipsed” the events preceding the 1987 market crash, according to president of Alexander Trading.
- Week ending September 19, 2008 has seen a 1000-point swing in the Dow Jones Industrial Average.
- In one 5-day period, Lehman Brothers (LEH) goes bankrupt, Merrill Lynch seeks $55 Billion merger with Bank of America Corp, and AIG taken over by Federal Reserve.
- American International Group (AIG) needs $15 Billion to $25 Billion to remain solvent.
- Short-selling prohibited for 799 different stocks until October 2.
- Markets called “financial demilitarized zone”.
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September 19, 2008 at 9:43 pm
· Filed under Market News ·Tagged breaking the buck, CD, certificate of deposit, high-yield, market panic, money market, money market mutual funds, NAV, net asset value, Reserve Primary Fund, secure investment, stock market, T-bills, treasury department
Source: Bankrate
Synopsis:
- The U.S. Treasury Department establishes Temporary Guaranty Program for elligible money market mutual funds.
- Money Market Mutual Funds are not normally guaranteed by FDIC.
- Panic in markets partly due to Reserve Primary Fund’s Net Asset Value being reduced to $0.97.
- T-bills being purchased at a loss because of their security.
- Money Market Accounts and High-Yield CDs recommended as safer alternatives.
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