Fearfully Fascinating Financials: Is the U.S. Financial System Leaving the Building?

Take a very deep breath. It looks almost certain that this week will be the one where we see the financial implosion in U.S. banking and brokerage that many have been expecting for some time. It reminds me a little of that awful feeling you have when you think you're going to vomit, but hold off for a surprisingly long time, knowing how dreadful the experience is going to be -- only to have nausea overwhelm you and be finally forced to say "f**k it" and hurl.

Marginally more seriously, the U.S. financial system last Friday and a few months from Friday looks like it will be a very different place. It will be smaller, less levered, more transparent, and have fewer people in the moving business of trading and banking. Dare I say it? The U.S. shadow banking system will soon be only a shadow of its shadowy self.

What that means for the rest of the economy is far from certain, but cash is more king than ever -- and there will be less of it extended as credit than at any time since Nixon was president.

Comments

[SW Richmond:]

Friday was clearly "save what you can". He who loses least, wins.

2008 Sep 14 09:30 PM

[chux08:]

Wow...this week, huh?? That's pretty cut and dry...

I would've bet on making it till (at least) election day but what do I know??

Good luck to us all!!

2008 Sep 14 10:08 PM

[wb100:]

I've been waiting for someone to use that analogy.

2008 Sep 14 10:30 PM

[ozcutty2:]

Wow, its going to be a heck of a week.
I reckon the stock market will be all over the place, big falls and big gains.

Who's next? WM?, how about Morgan Stanley, how are they looking?

Looks like everything will be owned by BAC and JPM after all this is over!

What will happen to LEH's asset management business?, thats a good business.

2008 Sep 14 11:08 PM

[GKM:]

And by cash will be king you mean yen right?

2008 Sep 14 11:10 PM

[AlexS:]

You never count your money when you're sittin' at the table. There'll be time enough for countin' when the dealin's done.

2008 Sep 14 11:24 PM

[Nikola:]

GOLD RUSH!

Ready, set.... go!

2008 Sep 14 11:27 PM

[Distressed ...:]

futures getting killed! What if, what if, what if... Neuberger gets sold by Monday Morning?

2008 Sep 14 11:56 PM

[Kevin Lamson:]

READ EM AND WEEP AND LET THE CHIPS FALL WHERE THEY LAY!

In my opinion it is high time that these Wall Street executives and their respective firms are exposed for what THEY, not the "shorts", have done to their companies and American finance by playing it fast and loose with the TRUTH. The truth about how much bad debt they flipped into the domestic and international markets and the truth about how much there executives reaped by reporting false profits tied to this mortgage loan flipping scheme. Flooding the markets with phony paper. The American public should be outraged at how our government regulators, politicians and the Bush administration allowed Wall Street to get away with this international fleecing of investors. It is an international embarrassment that America’s bankers ripped off the world in the new "global economy". But, we must now "let the cards read and the chips fall where they may". We need to turn out these crooks, their companies and their disastrous scheme in order in order to regain trust and return international confidence in the American business and banking practices. Not allow them to continue to hold their cards and pretend they have a winning hand because they don't have the chips to cover the losing hand they hold.

2008 Sep 15 02:00 AM

[Kevin Lamson:]

READ EM AND WEEP AND LET THE CHIPS FALL WHERE THEY MAY!

In my opinion it is high time that these Wall Street executives and their respective firms are exposed for what THEY, not the "shorts", have done to their companies and American finance by playing it fast and loose with the TRUTH. The truth about how much bad debt they flipped into the domestic and international markets and the truth about how much these executives reaped by reporting false profits tied to this mortgage loan flipping scheme. Flooding the markets with phony paper. The American public should be outraged at how our government regulators, politicians and the Bush administration allowed Wall Street to get away with this international fleecing of investors. It is an international embarrassment that America’s bankers ripped off the world in the new "global economy". But, we must now "let the cards read and the chips fall where they may". We need to turn out these crooks, their companies and their disastrous scheme in order in order to regain trust and return international confidence in the American business and banking practices. Not allow them to continue to hold their cards and pretend they have a winning hand or pretend they have chips to cover their losing hand.

2008 Sep 15 02:04 AM