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N.Y. Fed Holds Emergency Talks on Lehman Future
Effect of Possible Rescue on Firm's Trading Partners Discussed
By Heather Landy and Neil Irwin
Washington Post Staff Writers
Saturday, September 13, 2008; D01
NEW YORK, Sept. 12 -- Senior federal officials met last night with leading Wall Street executives to discuss the potential sale of ailing investment bank Lehman Brothers and review how an acquisition could affect those doing business with the firm, according to sources familiar with the discussions.
. . . the discussions centered on a wide range of issues that would arise for Lehman's trading partners and other business associates if a rescue were launched.
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Fannie, Freddie to Be Kept Off Federal Budget
Saturday, September 13, 2008; D02
The White House budget office said yesterday that it has decided not to incorporate mortgage-finance giants Fannie Mae and Freddie Mac into the federal budget, citing the temporary nature of the Treasury Department's takeover and "the level of federal ownership" of the firms.
The decision affects the way public expenditures on the two companies will be reflected in official budget projections. Treasury Secretary Henry M. Paulson Jr. has pledged to invest as much as $200 billion to keep the firms solvent.
On Tuesday, two days after the takeover, officials at the Congressional Budget Office announced that the deal had bound the government so tightly to the firms that their business operations, assets and liabilities should be included in the government's balance sheets.
Yesterday, Office of Management and Budget director Jim Nussle said he had decided differently, but may "reevaluate their budgetary status in the future, should conditions change."
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AIG Shares Tumble On Capital Concerns
By Zachary A. Goldfarb
Washington Post Staff Writer
Saturday, September 13, 2008; D01
Shares of American International Group, the nation's largest insurance company, plunged yesterday on fresh fears that it will have trouble remaining on firm financial footing as a result of the turmoil in the mortgage market.
AIG's shares fell $5.41, or 31 percent, to $12.14, the lowest point in 15 years and 83 percent below the 52-week high reached in October. The company joined a handful of other big U.S. financial institutions in suffering severe declines this week. Shares of mortgage giants Fannie Mae and Freddie Mac, taken over by the government last weekend, and investment bank Lehman Brothers lost most of their value this week.
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God only knows how Hank Paulson is getting the grass cut and leaves raked, what with spending weekend after weekend bailing out leaky Wall Street institutions. But to reach for a sports metaphor, college and professional football schedules have been replaced as weekend sports, by the new game of trying to keep up with what's slipped under the financial carpet while Congress and the markets are elsewhere.
I keep thinking of that famous 1964 photo of NY Giants quarterback, Y.A. Tittle, bloodied, dazed and on his knees after being sacked in the end-zone. 44 years later, an equally bald, bold and determined H. M. Paulson keeps throwing hail-Mary passes into financial markets, but it's 4th and goal, Hank and you're on your knees.
Tittle and Paulson are both Hall of Famers, but there have to have been days at the end of either career when they wished they'd stepped down gracefully before that final season.
Football and finance are each essentially about keeping the crowd on its feet.
No one can rationally say why the Dow Jones average stands resolutely above 11,000 while every possible disaster happens on the field. No one can account for Ganesha High School's football team defeating Citrus College to break a 49-game losing streak or why the Cubs remain the darlings of Chicago's north side.
It's hope and that American talent for beating the odds.
But it's still 4th and goal, Hank and the opposing forces of markets righting themselves are hunkered down, shoulder to shoulder. They're big and they're ugly and they're hungry for the sack.
* For more in-depth articles by Jim on Washington at Work, check out Opinion-Columns.com
