Penny for your bank, sir?

Well, someone has to be buying...

On a more serious note, Russia has now halted trading on their stock markets for the second straight day, after a 17% fall yesterday, and a 57% drop today. Sure, they may have rafts of non-Opec oil, but their prosperity has become strongly linked to the West, and if the West is having a bad day...

In unrelated news, Saudi Arabia left Opec last week. Saying that this ends the Opec years for all intents and purposes would not be far off.

I'm working on a much more thorough post about the current state of the US and world economy, but I should note in passing that I think that the Fed choosing to backstop AIG is a very, very good thing. Although it does fill my black little heart with glee that A Republican Administration has now presided over the largest nationalizations in the history of the United States.

The Continuing Story Of...

Beyond the troubles at Countrywide, Bear Sterns, Fannie and Freddie Mac, Lehman, and AIG, a number of other institutions have been in a world of hurt as well.

Washington Mutual has a mortgage portfolio that has a lot of mortgages that are probably going to go bad. They've finally managed to persuade their primary investor that hanging on by themselves is unlikely to end well, and they're talking with BofA and Citibank about possibly buying WaMu.
Wachovia Bank has a rotting-mortgage-portfolio problem as well. Morgan Stanley also has some amount of mortgage-backed-security business that is probably in trouble, and while they're profitable, their numbers have been significantly underwhelming this quarter. They're now talking about merging, which would probably get both of them off the watch list of potential spectacular failure.

That looks to me like everything stabilizes, for a while, in the next few weeks. It'll take a little bit of time for those deals to get done, but it also looks like the rate of sub-prime mortgage collapse is starting to ebb, and foreclosure sales are actually getting done, so we could soon be on a road to improvement.

Until next summer, when the all of the people who have adjustable rate mortgages that they can't really afford at market rates start having trouble. But that's a good nine months away. And in the meantime, I really hope you don't work for a technology company whose primary clients are major banks and investment banking firms, because your sales are about to have a dismal day, unless you have some clever way to increase the recovery they make on the sale of foreclosed properties.

PS: It looks like Barclay's will pick up the bulk of Lehman for a song. Possibly a Beatles song, but still.