August 2008

Will the recent garage sale at Merrill Lynch trigger a new round of gut clenching writedowns at places like Citigroup and UBS? That's the talk on Wall Street, as Merrill Lynch (MER) recently unloaded $30.6 bn in collateralized debt obligations once rated Triple-A for just 22 cents on the dollar to Lone Star Capital. On closer look, the private equity fund in Dallas is saying these CDOs are ... read more

As the one-year anniversary of the housing and credit crunch approaches, investors in Fannie Mae and Freddie Mac have nothing to celebrate. They won't see an end to the losses at these mortgage finance giants until after next year. Moreover, a report from the regulator of the two mortgage finance giants gives embarrassing new detail on how Fannie (FNM) and Freddie (FRE) were mindlessly gunning ... read more

John Thain, having taken over the wreckage left by former chief executive Stanley O'Neal at Merrill Lynch, is now out defending himself against criticism of the nine statements he's made since December,  that Merrill Lynch was adequately capitalized--despite having to subsequently return to the markets to raise capital. Be careful of these statements, as well as anything said in the future. ... read more

With oil prices dropping to less than $120 a barrel, its lowest price in three months, and the Federal Reserve not hiking interest rates, the Dow industrials rallied 331 points yesterday to 11615.77, its highest one day uptick since April 1 and a jump of 6% from the bearish July 15 low. The debate now is whether the oil markets will turn even more bearish and oil goes to $100.   But with ... read more

Lehman Brothers, the beleaguered Wall Street investment bank, must raise capital, sell as much as $50 bn in distressed debt securities, and cut its dividend by 90%, among other moves, to calm deep concern over its liquidity problems, says Ladenburg Thalmann & Co. analyst Richard Bove in a research note. Bove, a sharp-as-a-pencil numbers cruncher who is a top banking and brokerage analyst with ... read more