Goldman, Morgan to Become Bank Holding Companies

Goldman, Morgan to Become Bank Holding Companies

dealbook.blogs.nytimes.com

In one of the biggest changes to Wall Street in decades, Goldman Sachs and Morgan Stanley, the last two independent investment banks, will become bank holding companies, the Federal Reserve said Sunday night.

The move fundamentally changes one of the mainstays of modern Wall Street. It heralds new regulations and supervisions of previously lightly regulated investment banks.

The move comes after the bankruptcy of Lehman Brothers and the near-collapses of Bear Stearns and Merrill Lynch.

(visit the link for the full news article)

What the heck is going on?
It's like the Fed is steamrolling all these changes under cover of night.

More to come on this.

dealbook.blogs.nytimes.com
(visit the link for the full news article)

Here's the Fed press release:

Press Release

Release Date: September 21, 2008

For release at 9:30 p.m. EDT
The Federal Reserve Board on Sunday approved, pending a statutory five-day antitrust waiting period, the applications of Goldman Sachs and Morgan Stanley to become bank holding companies.

To provide increased liquidity support to these firms as they transition to managing their funding within a bank holding company structure, the Federal Reserve Board authorized the Federal Reserve Bank of New York to extend credit to the U.S. broker-dealer subsidiaries of Goldman Sachs and Morgan Stanley against all types of collateral that may be pledged at the Federal Reserve's primary credit facility for depository institutions or at the existing Primary Dealer Credit Facility (PDCF); the Federal Reserve has also made these collateral arrangements available to the broker-dealer subsidiary of Merrill Lynch. In addition, the Board also authorized the Federal Reserve Bank of New York to extend credit to the London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley, and Merrill Lynch against collateral that would be eligible to be pledged at the PDCF.

Fed. Reserve

Additional source:

In the surprise announcement late Sunday, the central bank said that to provide increase funding support to Goldman (GS, Fortune 500) and Morgan (MS, Fortune 500) during the transition period, they would be allowed to get short-term loans from the Federal Reserve Bank of New York against various types of collateral.

cnn money

Lovely.

The self same Golman Sachs that said oil at $200/bbl by year's end and Morgan Stanley. JP Morgan being the foundation of anti-trust laws in the first place.

As for me, I think contengency plans are now firmly on the "elevated" level. For those keeping score at home next is "standby" followed by "full effect--Grizzley Adams style".

Just Lovely.

I'm not sure who is behind all this and what they are really after.

But I think we're under attack!

I think there's a silent coup going on right under our noses.

The economics of this country have shifted more in the last week than in the last hundred years.

What is the hell is happening here?

What they are after is the same old story. Power, control, better seat at the table, not being kicke down to the kids table...the answer is infinate.

Part of problem is fallout of the housing crisis of lening to those unable to afford it. Why? Tax revenue? Maybe, but with the bailout bill it would seem control is the issue. As I live an apartment with no wife, girlfrien or children. I can pack up and quit the game. Sure quality of life will be harsh but give that rising fuel costs and being stuck in a lease that prevents me from moving closer to work, I am not exactly making money. More of a paycheck to paycheck deal.

But if the ship is sinking then I have no reason to fight the rats that will seek out the flotsam to stay above water. I have reason and means to seek out a different way.

The part of all this that disturbs me most, is I have forseen such a dire situation but this is too soon. 18-24 months too soon by my estimation. While my timeline could be wrong or the pace has been picked up unforeseen forces, I am still not sure of my error, eventhough it was an educated guess from a vision 23 years ago.

Each fall I squirrel away can goods an non-perishables in the event of loss of power through the winter. This year I have been buying other items as well so the food stores have been a bit lax. Thus I was caught with my pants own when Ike hit Ohio's power grid. Fortunately it only put me out $40. Others were not so lucky as many fridges and freezers were emptied this week into the garbage to the tune of $250-$500 or more.

Hmmm...Paulson, current US Treasury Secretary was formerly Chairman AND CEO of Goldman Sachs, now Goldman Sachs is a bank holding company.

Coincidence? I think not.

Originally posted by schrodingers dog
I'm not sure who is behind all this and what they are really after.

But I think we're under attack!

What is the hell is happening here?

BINGO!!!



The word from my sources is, that is a Dead On assessment, SD.




In the 1980's the US, under Ronald Reagan, exploited weaknesses in the old Soviet Union's economy, and, by forcing the USSR to compete in a torturous arms race (SDI, etc.), broke the Russian economy; which, in turn forced the break-up of the Soviet Union as it was then structured..


The Old Bear has since been currying favor and dining on Euros (paid by Western Europe in exchange for a significant portion of its natural gas supply).

Boris is also looking East, at a burgeoning Chinese energy market: I expect many "quiet and lucrative" deals to have been penned in the last few years between China and the "new" Russia.


And as most of you realize, China holds much of those "securitized" mortgages" which are being hastly "shored-up" this weekend.


China presented itself as a new Global powerhouse at the opening of the Beijing Olympics, for those with eyes to see.


And many in Russia still blame the US for the breakup of the old Soviet Union.


Lest WE forget; Payback is a B***h!.

reply to post by schrodingers dog


There is quite a few threads about the fed bailout bill that was leaked saturday ongoing right now that yours ties into.

heres some just on the bailout.
www.abovetopsecret.com...
www.abovetopsecret.com...
www.abovetopsecret.com...
www.abovetopsecret.com...

Martial law starting Oct.1
www.abovetopsecret.com...

Alot has been happening since saturday morning

The Fed and Bush are making a power grab right now as we speak. Right now everyone is holding there breathe to see if congress is going to follow along with it or not.

[edit on 9/21/2008 by Mercenary2007]

reply to post by Mercenary2007


Thanks M,
Yeah, I've been following most of the threads on this.
But turning brokerage firms into banks I think is anew one for everybody.
It's like the fed woke up last week and decided to take over this country.
The question is: On who's behalf?

Originally posted by schrodingers dog
reply to post by Mercenary2007

 

Thanks M,
Yeah, I've been following most of the threads on this.
But turning brokerage firms into banks I think is anew one for everybody.
It's like the fed woke up last week and decided to take over this country.
The question is: On who's behalf?

Thier own.

Sorry for the one liner...its now two!

reply to post by schrodingers dog


no problem SD.

do you really have to ask on who's behalf? I've been following this all weekend and it only benefits the fed and bush. but the bigger question is after the dust settles from the bailouts is bush going to give the crown to the fed or is the fed going to let bush wear the crown?

Now back to your thread. Looks like the fed is jumping the gun a bit. the bill that would allow what they are doing right now hasn't even been read in congress and won't until monday morning. Maybe the fed is giving us a hint that its a done deal already. and we've just become a fascist country over the weekend.

This is going to be an interesting week to say the least

Originally posted by bismarcksea

Originally posted by schrodingers dog
reply to post by Mercenary2007

 

Thanks M,
Yeah, I've been following most of the threads on this.
But turning brokerage firms into banks I think is anew one for everybody.
It's like the fed woke up last week and decided to take over this country.
The question is: On who's behalf?

Thier own.

Sorry for the one liner...its now two!

So it is essentially a COUP then?
In the middle of the night, like freakin thieves.

Originally posted by Bhadhidar
The word from my sources is, that is a Dead On assessment, SD.

Your sources? What sources? People who say things like this are full of crap 99.9999% of the time.

Originally posted by yellowcard

Originally posted by Bhadhidar
The word from my sources is, that is a Dead On assessment, SD.

Your sources? What sources? People who say things like this are full of crap 99.9999% of the time.

All right yellowcard, no need to come barging in like that.

Ask him for his sources, give him a chance to answer, and if he doesn't you're free to pitch a fit.

Cool?

SD its not only a coup but a pefect Coup right now. Not one shot has been fired........ well yet

Originally posted by Mercenary2007
SD its not only a coup but a pefect Coup right now. Not one shot has been fired........ well yet

Man, and I just became a citizen on Saturday.



I picked the wrong week to stop sniffing glue!

I gots to laugh cause the alternative ...

I hear you. This weekend has been way to serious for me.

I've been trying to find ways to atleast smile

I just wanted to include this editorial to add some context to this story:

The latest "Let's do something, anything" move to rescue the financial system is yet another example of expediency trumping sound long-term measures. The motivation for making Goldman and Morgan Stanley banks seems obvious: the powers that be seem determined to prevent either firm from going under. Being banks gives the firms access to a expanded menu of rescue facilities and tools. The other reason for the move is to subject the firms to increased oversight, but given the lack of enthusiasm of the Fed for regulating banks going into this crisis, and its lack of expertise in complex debt products, bringing the firms under the Fed's purview at this juncture is more a political talking point than a risk-reduction measure.

However, as we have mentioned, one of the characteristics of this crisis, as Richard Bookstaber pointed out in his book Demon of Our Own Design, is that processes in financial markers are tightly coupled, which means that they proceed through a series of steps with no possibility of intervention. One way to reduce tight coupling is to introduce interruptions in the sequence, such as the trading halts instituted in the wake of the 1987 crash. Another is to fragment the system by isolating various types of participants from each other by restricting how they interact or what kind of business they can conduct. Thus Glass-Steagall, the separation of commercial banking from investment banking, helped promote systemic stability by creating separate types of institutions that competed with each other only in limited ways.

Thus making Goldman and Morgan Stanley is an embodiment of the philosophy that helped create this mess.

naked capitalism