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Why do banks fail? Open discussion about the current economic situation
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Abu Dhabi does not allow England to buy more Barclays
The British government has found out that even if they want to help Barclays, by putting in more investment, they can’t. Turns out that a “clause inserted during the Abu Dhabi Royal Family’s investment in Barclays last October has made it pract...
England on a path with Stagnation
We have been talking about the United State printing money for some months now, but it looks like Britain has been drinking the same cool-aid. Someone will have to pay for these bailout outs. The Taxpayer. Regulation is needed, not protection, an...
Microsoft to layoff up to 5,000 jobs
Just in, Microsoft plans to eliminate up to 5,000 positions over the next 18 months. The news follows an 11% drop in net income. Revenue increased 2% to $16.63 billion (still not bad from my perspective, given the adoption issues with Vista, and wh...
Citi / Bank – Splitisville
The era of the super financial has come to an end, at least for Citibank. Citigroup Inc will split into two companies. Citicorp and Citi Holdings, reverting back to running a banking business. “The new structure will have the bank operating ...
A good thing is never enough, Bank of America to get more Bailout dollars
Buy low, sell high. It’s the mantra of smart investing. But how do you know something is at its bottom. In the financial crisis of 08/09, I would not want to be making those bets. The problem is that money is getting thrown around, and good money ...
Banks Fail, Paulson Wins
John Paulson profited more than anyone else (that we know of) during the depression/recession/crash of 2008. He is a hedge fund manager. Before we were talking about $7 billion in bailout funds, he had already cashed in a $3.7 billion payday in...
The Breakup - Citigroup
Citigroup’s Smith Barney and Morgan Stanley’s Brokerage operation are close to deal. This move would create the largest retail brokerage company, surpassing that of Bank of American who became number one with mergers this year. As the financi...
Short Squeeze: How Porsche hacked the financial system and profited
Want to know how to make money? Lets say you’re a high end automative producer, Porsche for example. Do you: Appeal to a broader demographic, create lower end vehicles leveraging technology in higher end cars Take advantage of lower wages an...
$10 Million for a job poorly done.
In another example on why it’s better to do your job poorly Dell is paying its Michael Cannon, president of global operations $10 million Breakdown: · Cash severance payment · $5 million paid on or before ...
England cuts rates – Everyone wants to print money
In move that aligns it self closer to other modern economies including Japan, US, and Europe, the Bank of England has cut its benchmark rate by half a percentage point. The move is seen as an effort to help the struggling economy and provide further ...
It’s because they need the money… or so they say.
An article featured on Forbes.com by Dan Gerstein, Chrysler’s Hidden Coffers, highlights the real story behind Chrysler’s begging. The Big Three are asking for a bailout to prevent shutting down. They want to prevent job loss, and prove...
New Name - Why American Car Companies fail
Recently we have thought about changing our name to reflect what ever the current industry in crisis was, but since that just about everyone, we will stick to Whybanksfail. It looks like GMAC, which was trying to get additional bailout funds by c...
Are American cars worth $125 billion?
What will the final cost be to fix Detroit’s Three automakers? A comprehensive bailout for General Motors, the Ford Motor Company and Chrysler could cost as much as $125 billion, and even the companies themselves are hard pressed to dispute that...
Dow Chemical to cut 5,000 full time jobs
The AP announced recently, Dow Chemical to cut 5,000 jobs, close 20 plants. That equates to 11% of the company’s total workforce. We should change the name of the site to Why Jobs Get Cut … there have been so many job cuts recently....
Bank Of America may cut 30,000 jobs
CNBC reported, Jobs Cuts in BofA-Merrill Merger May Reach 30,000. Now we’re adding Bank Of America to the list? Going to be some depressing Christmas parties out there. Take a look at some more depressing news from Seven Corporate Developments,...
Credit Suisse to cut 5,300 jobs
More job cuts (it just doesn’t stop) … at least this one isn’t only in the US. Credit Suisse announced an additional 5300 jobs to be cut from its global workforce. This comes after already losing 1800 jobs this year. That accou...
AT&T to cut 12,000 jobs
AT&T (NYSE:T 29.08 on 12/04/2008) just announced that they will be cutting 12,000 jobs. The layoff will total 4% of the workforce. Is this another “we can get in under the radar”? I don’t think so. After all, it’s ge...
Adobe announces layoffs, not attending Macworld
Where’s FuckedCompany.com when you need it? In a press release announced on adobe.com, Adobe will be laying off roughly 600 full-time positions globally. Adobe, a crucial partner in the realm of Apple, is not going to have a booth at Macworl...
CDO destruction would save banks, unfreeze credit markets, and destroy investors worldwide
Alan Kohler, of Business Spectator, wrote an article A tsunami of hope or terror?. The article covers what will happen if more companies go under. The Breakdown: A synthetic CDO cataclysm could save the global banking system (with horrible consequ...
Bailout Details for Citigroup, Guarantees on $306 Billion
In an effort to keep Citigroup, Inc (NYSE: C 3.77 11/21/08) afloat, the US government announced a plan to make available guarantees on over $300 billion of troubled mortgages and other assets after a week were Citibank lost more then 60% of its value...
Third bank shut down Friday, Most in one Day
On Friday, the FDIC and Georgia regulators shut down the third Georgia-based bank this year. The Community Bank, based in Loganville, Ga. became the 20th nation bank failure this year and was followed by two bank failures in California, making the to...
22 bank failures, Downey S&L and PFF B&T of California fail
Federal Deposit Insurance Corp was appointed receiver when the Fed was forced to shut down two large banks in California. The banks became the latest victims of acute distress in the real-estate market in that state. Latest two failures brings the...
Could Citibank Fail
The Saudi Prince has spoken, but it’s not enough to help Citigroup out of the downward plunge it is on. Citibank opened 4% lower, but it got much worst as the day went one. Losing more then 26% to trade close the day at 4.71 Breakdown: Citiban...
Multi-year low on Treasury Yields
Turmoil in the market has caused many investors continue to flock to the safety of government debt, and has increased the demand so greatly for these assists, that yields on the benchmark rate has fallen to a 5 year low. “Investors appear to be...
China Construction Bank stake increased by Bank of America
In an effort to control more of China Construction Bank, Bank of America(NYSE: BAC 15.33 11/17/08) has decided to exercise option this month to purchase additional shares of the Bank. This purchase will bring the stake in China Construction to 19.1%....
Citigroup — to cut jobs by 14%, 50,000 jobs lost
Bloomberg.com reports Citigroup’s Pandit to Reduce Headcount by 50,000, Cut Expenses. After many other job cut announcements, Fidelity cuts 1300 jobs (and many more job cuts), here comes a big one. Citigroup announces that it will reduce expe...
Starbucks earns $332.80 per STORE in Q3 ‘08
Starbucks (NASDAQ:SBUX 9.40 on 11/12/2008) has reported total earnings of $5.4m. That is generated from 16226 outlets worldwide. In real numbers, that is $332.80 generated in the last 3 months, on average, at a store. Suddenly going and spendin...
GM under $3, time travel to the 40’s
When talking about stocks for the past few weeks I have been using the term “time travel”. We can buy stocks for prices that we haven’t seen in years, or even decades. Who wouldn’t like that? General Motors (NYSE:GM 2.92 o...
