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Would you like a savings account with Goldman Sachs or Morgan Stanley?

Wizard's First Rule

User ID: 338227
United States
09/21/2008 10:25 PM

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Would you like a savings account with Goldman Sachs or Morgan Stanley?
Now you can. The last two remaining independent investment banks are now linked to the Fed Reserve and the central banking system.

Last major investment banks change status
[link to news.yahoo.com]
Wizard's Rule #1: "People are stupid. Given proper motivation, almost anyone will believe almost anything. People will believe a lie because they want to believe it's true, or because they are afraid it might be true. People’s heads are full of knowledge, facts, and beliefs, and most of it is false, yet they think it all true. People can only rarely tell the difference between a lie and the truth, and yet they are confident they can, and so are all the easier to fool."
Primordial Rule: "The rule unwritten. It is the secret of all life. It is the essence of life itself. You are a creator and master of your own reality. You ultimately make your own rules."
All the Wizard's Rules: [link to sot.wikia.com]

User ID: 458746
United States
09/21/2008 10:39 PM
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Re: Would you like a savings account with Goldman Sachs or Morgan Stanley?
Wow, there's about 4 thread on this already, but your will get my bump.
Here 's an article from CNBC:

[link to www.cnbc.com]

Goldman, Morgan Switch To Bank-Holding Firms
Topics:China | Wall Street | Banking | Stock Market
Companies:Wachovia Corp | Goldman Sachs Group Inc | Morgan StanleyBy CNBC.com With Wires | 21 Sep 2008 | 09:48 PM ET Font size: The Federal Reserve says it has granted a request by the country's last two major investment banks—Goldman Sachs and Morgan Stanley—to change their status to bank holding companies.

The Fed announced late Sunday that it had approved the request of Goldman.

The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.

It also will put them directly under the regulatory supervision of the U.S. central bank.

To provide increased liquidity to the companies, the Fed agreed to lend to the firms' broker-dealer subsidiaries on the the same terms as the Fed discount window for banks and the central bank's Primary Dealer Credit Facility lending window for investment banks.

It said it was making the same collateral deals available to the broker-dealer subsidiary of Merrill Lynch [MER 29.50 7.44 (+33.73%) ].

The change continued the biggest restructuring on Wall Street since the Great Depression.

Because of the change, Morgan Stanley is unlikely to do some kind of deal with Wachovia [WB 18.75 4.25 (+29.31%) ] or even get a cash infusion from the Chinese government.

Shares of both institutions had come under pressure ever since the bankruptcy filing last week by investment bank Lehman Brothers [LEH 0.2151 0.1631 (+313.65%) ] and the forced sale of investment bank Merrill Lynch to Bank of America [BOFA Unavailable () ].

Investors feared that the last remaining independent investment banks would not be able to survive in their current form.

There had been speculation that both institutions would be acquired by commercial banks, whose ability to take deposits would give them a stable source of funding.

The decision by the two giants of finance to get approval from the Fed to change their own status represented another dramatic development in one of the most turbulent periods in Wall Street history.

In the surprise announcement late Sunday, the central bank said that to provide increase funding support to the two institutions 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.

The decision means that the Goldman and Morgan Stanley will be able not only to set up commercial bank subsidiaries to take deposits, giving them a major resource base, but they will also have the same access as other commercial banks to the Fed's emergency loan program.

After the collapse of Bear Stearns and its forced sale to JP Morgan Chase last March, the Fed used powers it had been granted during the Great Depression to extend its emergency loans to investment banks as well as commercial banks.

However, that extension was granted on a temporary basis.

But as commercial banks, Goldman Sachs and Morgan Stanley will have permanent access to emergency loans from the Fed, the same privilege that other commercial banks enjoy.

The action by the Fed's board of governors in Washington came on a day when the Bush administration continued to campaign for quick congressional approval of its request for authority to use $700 billion to purchase a mountain of bad mortgage debt held by financial companies.

The effort represented the boldest action yet aimed at stabilizing chaotic financial markets.

Democrats in Congress said they would demand provisions in the bailout measure to protect people in danger of losing their homes as well as seeking to cap executive compensation at firms who get to unload their bad mortgages debt onto the government.

But the proposal was expected to win quick congressional passage because both parties are concerned about the adverse reaction in financial markets should the measure look like it was being delayed.

—Reuters and AP contributed to this report.

So, no deal for Wachovia.

User ID: 507889
United States
09/21/2008 10:41 PM
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Re: Would you like a savings account with Goldman Sachs or Morgan Stanley?
WTF??, now i'm worry
Nibiru is coming are you ready? :eq:

User ID: 458746
United States
09/21/2008 10:43 PM
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Re: Would you like a savings account with Goldman Sachs or Morgan Stanley?
Man, if you weren't worried before then you've got nerves of steel.

User ID: 437351
United States
09/21/2008 10:46 PM
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Re: Would you like a savings account with Goldman Sachs or Morgan Stanley?
easiest question i have answered all day. NO! they are doing this because they have no other means to generate investment capital, i.e. very few are willing to invest with them anymore.


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