A pleasant surprise this morning to read that Wachovia is being wholly taken over by Wells.  Wells Fargo in a Deal to Buy All of Wachovia | NY Times Wachovia’s deal with Wells Fargo will further concentrate Americans’ bank deposits in the hands of just three banks: Bank of America, JPMorgan Chase and Wells Fargo would control more than 30 percent of the industry’s deposits. Together, those three would be so large that they would dominate the industry, with unrivaled power to set prices for their loans and services. Given their size and reach, the institutions would probably come under … Continue reading Wells and Wachovia is a much better arrangement

American banking lies in an uncomfortable mix of three big banks, and 8,000 smaller ones (with apologies to Wells).  As the dust settles on the last two weeks the realisation of what has occurred with the disappearance of Wachovia, WaMu, and the investment Banks, will settle, and the result will not offer opportunities, and implications not forseen. US regional bank mergers The US banking food chain is a dangerous place to be. The minnows, though, have got off lightly, while bigger fish have made a meal of each other. Where does that leave prospects for consolidation among the 8,000-odd US … Continue reading What about the US regional banks ?

I would have posted this earlier this evening, but the US House Committee on Financial Services site was down due to the overwhelming response to download the act. Here is the full proposed Act emergency-economic-stabilization-act-2008-ayo08c04_xml (EESA) Here is the more useful part for most their one page summary – emergency-economic-stabilization-act-2008-summary-ayo08c04_xml There are five parts: Stabilizing the Economy Homeownership preservation Taxpayer Protection No Windfall for Executives Strong oversight I took away a few thoughts: Much of the rhetoric in the bill worded to protect the US taxpayer and punish the big bad banker, will do much of neither.  There is a … Continue reading Emergency Economic Stabilization Act of 2008, and the word that is missing

Not that we care or need to comment on personal circumstances of people, but in this situation it is indicative of the excess that Wall Street Banking had come to represent.  Richard Fuld Jr. and his wife, Kathy, a well-known collector of modern art sell art | WSJ It could also evoke the plight of its owners, Richard Fuld Jr. — chairman and chief executive of Lehman Brothers Holdings Inc., the bankrupt holding company — and his wife, Kathy, a well-known collector of modern art. The sketches were consigned in early August following a competitive bidding process between Christie’s and … Continue reading Now we see why Lehmans was allowed to fail

I expect we will see many interesting and unexpected developments in the new few weeks and months.  Don’t rule out Japan, which is largely unaffected by the credit crisis, and may be interested in broadening their investment beyond their shores. Report: Nomura interested in Lehman’s Europe unit TOKYO: Japan’s largest brokerage Nomura Holdings refused to comment Monday whether it was moving to acquire the European unit of U.S. investment bank Lehman Brothers, as reported in the media over the weekend. Continue reading Report: Nomura interested in Lehman’s Europe unit | IHT

The US Banking system is undergoing a crisis moment, driven largely by the Lehman Brothers being effectively bankrupt.  They have not needed to borrow from the Fed since March, but have the ability to do so if required.  It appears some customers have left, but not a run on the Bank just yet.  Nonetheless this is a crisis. US gives Banks a warning As Lehman Brothers teetered Friday evening, Federal Reserve officials summoned the heads of major Wall Street firms to a meeting in lower Manhattan and insisted they rescue of the stricken investment bank and develop plans to stabilize … Continue reading U.S. Gives Banks Urgent Warning to Solve Crisis