September 2008

It should be no surprise that the Korea Development Bank (KDB), South Korea's state-owned lender, is in talks to set up a consortium with private banks to invest in distressed U.S. investment bank Lehman Brothers, whose shares are down 75% this year. A deal could inject as much as $6 billion in capital in return for a stake of up to 25% in the investment bank, which has been hit hard by the ... read more

Delinquencies on home equity loans and lines of credit are at their highest levels in a decade. That should give Wall Street and investors pause. Because when home equity borrowers, default on their lines of credit, bankers don't have first recourse to the underlying property, the home. Mortgage bankers who own the mortgage on the home do. That's why bankers are growing ashen-white over looming ... read more

Hurricane season has blown in, and the fear is that a string of hurricanes lined up like airplanes at LaGuardia, as Fox anchor Neil Cavuto quips, will act as a lead blanket on an already distressed stock market dealing with an epic subprime meltdown and a historic credit crunch. Yes, hurricanes actually create economic activity. Just watch the action in stocks of Wal-Mart (WMT), Home Depot ... read more

Fears that another hedge fund could blow up, along with higher unemployment figures and poor retail sales data, are giving stocks their worst showing in two months. Investors are watching with accelerating alarm as a growing number of hedge funds are treading water. With $1.9 tn under management, hedge funds are big players in the stock market, so any problems in the sector could leave the ... read more

What was implicit now has become explicit. What was feared, and desperately needed, has now become reality. The world's largest government bailout has begun. Finally, after years of ignoring the fire-engine-red alarms clanging at the world's biggest mortgage-finance giants, the government has seized Freddie Mac (FRE) and Fannie Mae (FNM) and tossed their executive management team. I warned ... read more