Running down the press:
After carving themselves another Ground Zero in Manhattan (without the actual deaths), Wall Street's bankers are frantically rebuilding.
Their jobs — and your jobs — are at stake.
I'm not trying to disrespect the 9/11 tragedy or minimize that day's deaths. But the New York Times's headline this morning does use a physical-space metaphor for a fiscal-space collapse: "Bids to Halt Crisis Reshape Wall St. Landscape."
Loading their aging cannons with adjectives and even a colorful verb, the Times team crafts this lede:
In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, said it would seek bankruptcy protection and hurtled toward liquidation after it failed to find a buyer.
The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.
For my lack of money, I'll take the Wall Street Journal's tighter lede, headlined "Crisis on Wall Street as Lehman Totters, Merrill Is Sold, AIG Seeks to Raise Cash":
The American financial system was shaken to its core on Sunday. Lehman Brothers Holdings Inc. said it would file for bankruptcy protection, and Merrill Lynch & Co. agreed to be sold to Bank of America Corp.
What about our mortgages and our shaky grip on our jobs and our real estate? I guess news about the impact of Wall Street's meltdown on us will just have to wait.
Anyway, at least the Times's third and fourth grafs give us a glimpse of the stress felt by those poor Wall Street bankers:
But even as the fates of Lehman and Merrill hung in the balance, another crisis loomed as the insurance giant American International Group appeared to teeter. Staggered by losses stemming from the credit crisis, A.I.G. sought a $40 billion lifeline from the Federal Reserve, without which the company may have only days to survive.
The stunning series of events culminated a weekend of frantic around-the-clock negotiations, as Wall Street bankers huddled in meetings at the behest of Bush administration officials to try to avoid a downward spiral in the markets stemming from a crisis of confidence.
Meanwhile, the New York Post couldn't resist punning (who canned?) the scary threat to Wall Street's fairy-tale profit-taking: ' "DOOMED" LEHMAN NOW BROS. GRIM'
But you won't go wrong this morning if you stick to the Post (which, after all, is the WSJ's sister Murdoch paper). At least the Post's Mark DeCambre mentions us commoners in its lede:
In one of the biggest financial disasters in Wall Street history, investment-banking powerhouse Lehman Brothers filed for bankruptcy early this morning after the feds refused to put taxpayers on the hook for a bailout.
And the Post mentions our jobs in its third graf, followed by a quick review of the tragedy by Ayn Rand acolyte Alan Greenspan (see the website run by Rand's own followers):
Former Federal Reserve chief Alan Greenspan described the financial hurricane that has swept away Lehman, Merrill Lynch, Freddie Mac, Fannie Mae and Bear Stearns as "a once-in-a-century event" that can still take down other firms. Mayor Bloomberg put off a trip to San Francisco to help deal with the crisis, since New York City collects a disproportionate share of its revenues from the financial sector.
DeCambre is clearly the city's best journo this morning. His sidebar "Thain Plays It Sane" (that's his editors' headline, so don't blame him) is seriously excellent, and he plays that tune in only seven grafs. On this historically frightening day, I'm stealing the whole thing for you:
Merrill Lynch CEO John Thain
might be the shrewdest man on Wall Street.
In engineering the sale of his firm to Bank of America for $44 million, Thain avoided the calamity that befell Lehman Brothers, which was poised to be liquidated after failing to find a buyer.
A conservative executive known on Wall Street as "I, Robot," from his days as CEO of the New York Stock Exchange, Thain pushed to strike a deal with the encouragement of Federal Reserve officials rather than see his storied investment franchise placed in a shaky market's cross hairs.
He took over Merrill Lynch in December from Stanley O'Neal, who had racked up tens of billions in losses on funky mortgage-related debt. A former Goldman honcho, Thain came with an impressive pedigree, and many assumed he would try to gussy up Merrill for an eventual sale.
Unlike Lehman Brothers CEO Richard Fuld, however, Thain opted to take a big balance-sheet hit now rather than wait for the market to recover. That resulted in Merrill's shopping $30.6 billion in mortgage securities at pennies on the dollar to private-equity investor Lone Star and its stake in media company Bloomberg LP. [Yes, that's Mayor Mike Bloomberg's company.]
But after back-to-back weekends featuring the Federal Reserve bailout of Fannie Mae and Freddie Mac and the certain liquidation of Lehman, finding a bigger partner became unavoidable.
It's too early to determine Thain's next move, but he's believed to have political aspirations.
A fine analysis and he even followed Post style by using the word "funky" and squeezing "honcho," "pedigree," and "gussy" into the same sentence.
I'm not faulting him, but DeCambre didn't mention some relevant background concerning O'Neal. Four long years ago, on July 7, 2004, I noted, under the subhead "For Bush, Black Is Beautiful, if by 'Black' You Mean Stan O'Neal":
Merrill Lynch CEO E. Stanley O'Neal, the most prominent black Wall Streeter, set an all-time fundraising record for Bush by writing a letter in June 2003 to Merrill's senior execs, asking them to contribute.
As the Washington Post's Thomas B. Edsall and Jonathan Weisman pointed out [in May 2004], that letter generated $279,750 in less than three weeks' time, a record for such a short period.
Stan O'Neal is one of nine Wall Street "Rangers" — the super fundraisers of the Bush campaign, the Post noted. And the Bush regime has done right by Wall Street with tax cuts on investments, capital gains, corporations, and estates.
Go back and read the May 24, 2004, Washington Post story I mentioned above. Just its headline gives you some good background on the current slide toward a depression: "Wall Street Firms Funnel Millions to Bush: Finance Sector Produces Surge of Cash to President Who Cut Taxes on Dividends, Gains."
Back to the New York Post: DeCambre's not the only person on Wall Street who pulled an all-nighter, but he's one of the few whose stock is rising. In an item posted at 4:02 a.m., he strikes yet again with another brief but pungent morsel, "GOV'T FORCING GIANT TO SWALLOW BITTER PILL". His lede:
The feds have decided that it's time for Wall Street to take its medicine after years of wracking up big returns and then sticking it to the taxpayer when things go sour.
Treasury Secretary Henry Paulson and Federal Reserve Bank President Timothy Geithner signaled the end of public-funded bailouts last night by letting Lehman Brothers collapse rather than enticing a buyer with a big check to cover its losses.
The Wall Street meltdown is bad timing for the Democrats — not to mention the grim future an Obama Administration would have to deal with. After all the puff pieces on Sarah Palin were widely disseminated in the first blush of her unvetted selection, now some real news is unfolding about her shenanigans — and a blatant lie from John McCain — and yet it's buried beneath the meltdown.
For example, the Wall Street Journal's intriguing piece this morning that got pushed back to page A5:
'Palin Sought Millions in Earmarks'
Last week, Republican presidential candidate Sen. John McCain said his running mate, Alaska Gov. Sarah Palin, hadn't sought earmarks or special-interest spending from Congress, presenting her as a fiscal conservative. But state records show Gov. Palin has asked U.S. taxpayers to fund $453 million in specific Alaska projects over the past two years.
And the story gets better:
Sen. McCain has made the battle against earmarks and wasteful spending a centerpiece of his campaign. He has never sought earmarks for his state of Arizona and vows to veto pork-barrel spending bills that come to his desk as president, saying these projects should go through normal budget review. And he derides the argument that states often make: that they're funding important projects.
"If they're worthy projects they can be authorized and appropriated in a New York minute," he explained on his campaign bus earlier this year, before Gov. Palin joined the ticket. "If they're worthy projects I know they'd be funded."
During an appearance Friday on ABC's The View, Sen. McCain said Gov. Palin shared his views, and hasn't sought congressional earmarks. "Not as governor she hasn't," he said.
In fact, in the current fiscal year, she is seeking $197 million for 31 projects, the records show. In the prior year, her first year in office, she sought $256 million for dozens more projects ranging from research on rockfish and harbor-seal genetics to rural sanitation and obesity prevention.
In other news, people were killed in a commuter train crash in L.A. (which didn't even have commuter trains until a few years ago), we're still losing the war in Afghanistan, stuff is happening in Zimbabwe, and, as the New York Post reports in a preview of a September 18 event, "Britney look-alikes show 'pieces' of the famous pop tart."