by Mary Danielsen
September 15, 2008, will go down as an historic day.
Bloomberg says this: “In the biggest reshaping of the financial industry since the Great Depression, two of Wall Street’s most storied firms, Merrill Lynch & Co. And Lehman Brothers Holdings, Inc., headed toward extinction….the tectonic plates beneath the world financial system are shifting, and there is going to be a new financial world order that will be born out of this…it’s an ugly and painful process.” Indeed. But this process has to take place. Let’s look at why.
Monday morning, the world woke up to the news that both Lehman Brothers Holdings and Merrill Lynch were officially going under, never to appear on the US economic scene again. Lehman, a 158 year old financial institution, had its start when the Lehman brothers, immigrants from Germany, began to trade in cotton during the years leading up to the Civil War. Lehman went on to underwrite many of the benchmark corporations that Americans would be familiar with even today, including F.W. Woolworth, Gimbel Brothers, R.H. Macy, B.F. Goodrich, and Studebaker. They not only survived the Civil War, the Depression, 2 World Wars and the World Trade Center attacks (they occupied 3 floors of the WTC), but during America’s growth spurt following the world wars, they contributed greatly to the health of companies such as RCA and the growing oil industry (Halliburton, no less). Lehman Brothers has been a part of the American economic landscape through her most economic formative years, largely during the industrial age and the post-war rebuilding era.
Merrill Lynch, also an investment bank specializing in wealth and asset management, opened its doors on Wall Street in 1914. Charles Merrill and Edmund Lynch made several successful investments early on, including RKO Pictures, a major Hollywood motion picture company, and Safeway, the country’s third largest grocery chain of the day, back in the ‘30s.
Enter Bank of America, who made history today by entering into a marriage of convenience (some are saying shotgun wedding) with Merrill Lynch by purchasing that firm. Bank of America was begun as Bank of Italy in San Francisco in 1904, and was based on catering to immigrants. It merged with the LA-based Bank of America and developed the first advanced bank branch system. Not long after they had added insurance services to their banking business, a law was passed in 1956, prohibiting banks from owning non-banking subsidiaries such as, insurance companies. So, Transamerica was formed to handle the insurance business, leaving Bank of America to concentrate it’s efforts on expanding consumer banking outside of California, as regulatory controls had recently eased in the interstate banking area. In 1958, they issued one of the very first credit cards in America, the BankAmerica card – later renamed “Visa”. Not long after that, a competing consortium of California banks issued the “Master Charge” card – later renamed “MasterCard” – to compete with Visa. This brings us up to today, and the resulting massive credit addiction of both Americans and their government. The combined Bank of America Securities-Merrill Lynch Corp. will become the biggest U.S. investment bank by revenue, vaulting past J.P. Morgan Chase, Goldman Sachs Group and Citigroup. Merrill-Bank of America Securities also will become No. 1 in both global stock and debt underwriting, Today, Bank of America is the #1 bank in the United States, and #4 in the entire world, thanks largely to those credit services and the resulting “buy now and pay later” approach to life that a previous generation would have railed against. And oh how we are paying. Cheap credit and surging property values have been slammed into reverse gear after a wild joy ride, and those proverbial chickens have come home to roost.
Currently out of the top 5 investment banking firms in the U.S., Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns, amazingly, only two will remain in business going into the fall of 2008. While there is a combination of financial factors that make this ‘the perfect storm’, the overriding issue is the sub-prime mortgage crisis and the devaluing of the real estate market (which was over-inflated to begin with). Back in 2006, the American housing bubble burst as default rates on sub-prime and adjustable-rate mortgages rose dramatically. (Lynch wrote down $8 billion in mortgage-related losses.) Many believe that these investment bankers should have seen this coming and are only getting what they deserve.
Problem is, while these newly unemployed investment execs sail off into the sunset with millions of dollars in parting gifts (“How the Masters of the Universe Ran Amok and Cost Us the Earth” http://thescotsman.scotsman.com/latestnews/-How-the-Masters-of.4494032.jp)the rest of us are left to pick up the pieces in lost jobs, tax increases (to bail out Bear Stearns and Freddie and Fannie) and perhaps a host of unseen ripples yet to come. The calorically-challenged lady has yet to sing.
On the international scene, things are apparently shaky as well. Oil prices are dropping rapidly, and down to around $90 per barrel as citizens have cut back on their energy consumption (wasn’t that the idea?); Housing prices in China are collapsing; Russia has a major capital crisis; and inflation rates in Japan and India all point to a global recession. American International Group, Inc. (AIG), once the world’s largest insurer, will be the next to go, as their credit number has been downgraded to the point where they will be unlikely to raise the capital needed to stay in business, as happened to Lehman and Lynch. This will send another round of shock waves through the global markets. The dollar continues to slide against global currencies, and today, the European Central Bank (ECB) pumped $61 billion into the market, and the Bank of England offered $30 billion, to buffer the global economy from any more shocks.
In the article referenced above, “How the Masters of the Universe Ran Amok and Cost us the Earth”, which ran today in The Scotsman newspaper, we get a glimpse of just how interconnected the world markets are. And anyone who is familiar with Bible prophecy will be reminded that these things should not surprise any of us as we gallop toward a global money system and pave the way for a financial saviour in the person of the Antichrist. They document the following fascinating series of events:
“The collapse effectively began at 6pm last Friday. The place: the offices of the New York Federal Reserve. The occasion: an emergency meeting of the most powerful figures in American banking and finance aimed at staving off a massive bank collapse.
Those who stepped from their limousines to be present included Richard Fuld, the chairman and chief executive of Lehman Brothers; John Mack, the head of Morgan Stanley; Jamie Dimon, of JP Morgan Chase; Vikram Pandit, of Citigroup; Lloyd Blankfein, of Goldman Sachs; Bob Diamond, the head of Barclays Capital; and senior representatives from Mellon Bank and Royal Bank of Scotland.
“We are the biggest overseas bank in America”, explained an RBS spokeswoman. “There was an ‘all points bulletin’ from the Fed and they called us in”.
Awaiting them along one side of the boardroom table was the United States Federal Reserve chairman, Ben Bernanke – nicknamed Helicopter Ben for having slashed interest rates and showered Wall Street with money earlier this year to avoid the very disaster that was about to unfold.Flanking him was Hank Paulson, the US treasury secretary, and Tom Geithner, chairman of the New York Fed. It was Geithner who opened the meeting – and presented Wall Street’s finest with the fright of their lives.
Either there was a Wall Street rescue for Lehman, or the investment bank would have to face the consequences. An eerie silence ensued.
An analyst at RBS Greenwich in New York summed up the most dramatic meeting of America’s top bankers thus: “I thought last weekend was crazy, but this one was even more chaotic.”Everyone expected to hear by early Sunday evening that the Fed/Treasury had managed to arrange a shotgun wedding for Lehman with someone – Bank of America, Barclays, private equity. A funny thing happened on the way to a deal.The New York Fed called in all of the head honchos and said that they had a great deal for them. One lucky participant would get to buy Lehman’s business and their ‘good’ assets for a bargain price.
“The others would get a consolation prize: a chance to contribute their own precious capital to fund a bank of Lehman’s ‘bad’ assets. The Fed and Treasury were said to be ‘adamant’ that public money would not be involved in any bail-out. “No government money? OK, no deal.”
The meeting set the tone for the weekend. By Saturday morning, more than 100 bankers were involved. Paulson refused to budge on pleas for government underpinning of the Lehman “bad bank” proposal: $41.8 billion of property and up to a further $40 billion of “toxic” assets that had been infected by subprime mortgage loans or derivatives.
Cookies and coffee arrived. Then ghoulish crowds began to gather, reminiscent of those that had assembled in Wall Street 80 years ago as the stock market crashed. The last of the meetings broke up late on Sunday, by which time there were no fewer than three separate frenzied huddles of investment bankers. One comprised credit traders trying to agree an orderly unwinding of Lehman’s default swaps to avoid utter mayhem yesterday morning.
Another room was full of regulators trying to put a floor under AIG, the world’s biggest insurer, whose shares had crashed the previous week. The third was putting together a massive $50 billion rescue takeover by Bank of America of Merrill Lynch – the investment bank to broking giant that is famous for its ‘raging bull’ logo.” (end of quote.)
Now, remember this one thing, and do your homework on this: the Federal Reserve is not a government institution. It is a private bank, set up by the very people who represented the richest men in American in the latter 19th century and is today our all-powerful central bank. These money men gathered on Jekyll Island between 1890 – 1945 to map out the next 100 years of the American economy, their meetings culminating in the Federal Reserve Act of 1914. This illegal piece of legislation was passed while Congress’ back was turned. Or was it? (For a detailed treatment of this momentous period in American History, one that really brought us to this point, read “The Creature from Jekyll Island’ by Edward Griffiths.)
The bottom line: the consolidating of global finances continues, and must continue. The “Merchants of Menace” will see to it that economic power will end up in the hands of the few most powerful bankers and institutions in the world. This is a necessary chain of events to bring about a world where “No man may buy or sell save he that had the mark, or the name of the beast, or the number of his name.” (Rev. 13:17). This system will bring us a world where a loaf of bread will cost a day’s wage, and famine will be a part of every day life in this world (Rev. 6).This system must be the end result of each of these quakes and aftershocks in the market, as more and more signs of the times indicate that Jesus’ coming is quite near. As Christians we must not be alarmed about any of these developments, but continue to trust that the Lord has all things in control, no matter how disturbing. While men’s hearts will “fail them for fear for looking after those things which are coming on the earth” (Luke 21:26), our response to these birth pangs can only be to look up, for our redemption is drawing nigh! Maranatha!
Dr. Bankenstein
by Mary Danielsen
September 15, 2008, will go down as an historic day.
Bloomberg says this: “In the biggest reshaping of the financial industry since the Great Depression, two of Wall Street’s most storied firms, Merrill Lynch & Co. And Lehman Brothers Holdings, Inc., headed toward extinction….the tectonic plates beneath the world financial system are shifting, and there is going to be a new financial world order that will be born out of this…it’s an ugly and painful process.” Indeed. But this process has to take place. Let’s look at why.
Monday morning, the world woke up to the news that both Lehman Brothers Holdings and Merrill Lynch were officially going under, never to appear on the US economic scene again. Lehman, a 158 year old financial institution, had its start when the Lehman brothers, immigrants from Germany, began to trade in cotton during the years leading up to the Civil War. Lehman went on to underwrite many of the benchmark corporations that Americans would be familiar with even today, including F.W. Woolworth, Gimbel Brothers, R.H. Macy, B.F. Goodrich, and Studebaker. They not only survived the Civil War, the Depression, 2 World Wars and the World Trade Center attacks (they occupied 3 floors of the WTC), but during America’s growth spurt following the world wars, they contributed greatly to the health of companies such as RCA and the growing oil industry (Halliburton, no less). Lehman Brothers has been a part of the American economic landscape through her most economic formative years, largely during the industrial age and the post-war rebuilding era.
Merrill Lynch, also an investment bank specializing in wealth and asset management, opened its doors on Wall Street in 1914. Charles Merrill and Edmund Lynch made several successful investments early on, including RKO Pictures, a major Hollywood motion picture company, and Safeway, the country’s third largest grocery chain of the day, back in the ‘30s.
Enter Bank of America, who made history today by entering into a marriage of convenience (some are saying shotgun wedding) with Merrill Lynch by purchasing that firm. Bank of America was begun as Bank of Italy in San Francisco in 1904, and was based on catering to immigrants. It merged with the LA-based Bank of America and developed the first advanced bank branch system. Not long after they had added insurance services to their banking business, a law was passed in 1956, prohibiting banks from owning non-banking subsidiaries such as, insurance companies. So, Transamerica was formed to handle the insurance business, leaving Bank of America to concentrate it’s efforts on expanding consumer banking outside of California, as regulatory controls had recently eased in the interstate banking area. In 1958, they issued one of the very first credit cards in America, the BankAmerica card – later renamed “Visa”. Not long after that, a competing consortium of California banks issued the “Master Charge” card – later renamed “MasterCard” – to compete with Visa. This brings us up to today, and the resulting massive credit addiction of both Americans and their government. The combined Bank of America Securities-Merrill Lynch Corp. will become the biggest U.S. investment bank by revenue, vaulting past J.P. Morgan Chase, Goldman Sachs Group and Citigroup. Merrill-Bank of America Securities also will become No. 1 in both global stock and debt underwriting, Today, Bank of America is the #1 bank in the United States, and #4 in the entire world, thanks largely to those credit services and the resulting “buy now and pay later” approach to life that a previous generation would have railed against. And oh how we are paying. Cheap credit and surging property values have been slammed into reverse gear after a wild joy ride, and those proverbial chickens have come home to roost.
Currently out of the top 5 investment banking firms in the U.S., Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns, amazingly, only two will remain in business going into the fall of 2008. While there is a combination of financial factors that make this ‘the perfect storm’, the overriding issue is the sub-prime mortgage crisis and the devaluing of the real estate market (which was over-inflated to begin with). Back in 2006, the American housing bubble burst as default rates on sub-prime and adjustable-rate mortgages rose dramatically. (Lynch wrote down $8 billion in mortgage-related losses.) Many believe that these investment bankers should have seen this coming and are only getting what they deserve.
Problem is, while these newly unemployed investment execs sail off into the sunset with millions of dollars in parting gifts (“How the Masters of the Universe Ran Amok and Cost Us the Earth” http://thescotsman.scotsman.com/latestnews/-How-the-Masters-of.4494032.jp)the rest of us are left to pick up the pieces in lost jobs, tax increases (to bail out Bear Stearns and Freddie and Fannie) and perhaps a host of unseen ripples yet to come. The calorically-challenged lady has yet to sing.
On the international scene, things are apparently shaky as well. Oil prices are dropping rapidly, and down to around $90 per barrel as citizens have cut back on their energy consumption (wasn’t that the idea?); Housing prices in China are collapsing; Russia has a major capital crisis; and inflation rates in Japan and India all point to a global recession. American International Group, Inc. (AIG), once the world’s largest insurer, will be the next to go, as their credit number has been downgraded to the point where they will be unlikely to raise the capital needed to stay in business, as happened to Lehman and Lynch. This will send another round of shock waves through the global markets. The dollar continues to slide against global currencies, and today, the European Central Bank (ECB) pumped $61 billion into the market, and the Bank of England offered $30 billion, to buffer the global economy from any more shocks.
In the article referenced above, “How the Masters of the Universe Ran Amok and Cost us the Earth”, which ran today in The Scotsman newspaper, we get a glimpse of just how interconnected the world markets are. And anyone who is familiar with Bible prophecy will be reminded that these things should not surprise any of us as we gallop toward a global money system and pave the way for a financial saviour in the person of the Antichrist. They document the following fascinating series of events:
“The collapse effectively began at 6pm last Friday. The place: the offices of the New York Federal Reserve. The occasion: an emergency meeting of the most powerful figures in American banking and finance aimed at staving off a massive bank collapse.
Those who stepped from their limousines to be present included Richard Fuld, the chairman and chief executive of Lehman Brothers; John Mack, the head of Morgan Stanley; Jamie Dimon, of JP Morgan Chase; Vikram Pandit, of Citigroup; Lloyd Blankfein, of Goldman Sachs; Bob Diamond, the head of Barclays Capital; and senior representatives from Mellon Bank and Royal Bank of Scotland.
“We are the biggest overseas bank in America”, explained an RBS spokeswoman. “There was an ‘all points bulletin’ from the Fed and they called us in”.
Awaiting them along one side of the boardroom table was the United States Federal Reserve chairman, Ben Bernanke – nicknamed Helicopter Ben for having slashed interest rates and showered Wall Street with money earlier this year to avoid the very disaster that was about to unfold.Flanking him was Hank Paulson, the US treasury secretary, and Tom Geithner, chairman of the New York Fed. It was Geithner who opened the meeting – and presented Wall Street’s finest with the fright of their lives.
Either there was a Wall Street rescue for Lehman, or the investment bank would have to face the consequences. An eerie silence ensued.
An analyst at RBS Greenwich in New York summed up the most dramatic meeting of America’s top bankers thus: “I thought last weekend was crazy, but this one was even more chaotic.”Everyone expected to hear by early Sunday evening that the Fed/Treasury had managed to arrange a shotgun wedding for Lehman with someone – Bank of America, Barclays, private equity. A funny thing happened on the way to a deal.The New York Fed called in all of the head honchos and said that they had a great deal for them. One lucky participant would get to buy Lehman’s business and their ‘good’ assets for a bargain price.
“The others would get a consolation prize: a chance to contribute their own precious capital to fund a bank of Lehman’s ‘bad’ assets. The Fed and Treasury were said to be ‘adamant’ that public money would not be involved in any bail-out. “No government money? OK, no deal.”
The meeting set the tone for the weekend. By Saturday morning, more than 100 bankers were involved. Paulson refused to budge on pleas for government underpinning of the Lehman “bad bank” proposal: $41.8 billion of property and up to a further $40 billion of “toxic” assets that had been infected by subprime mortgage loans or derivatives.
Cookies and coffee arrived. Then ghoulish crowds began to gather, reminiscent of those that had assembled in Wall Street 80 years ago as the stock market crashed. The last of the meetings broke up late on Sunday, by which time there were no fewer than three separate frenzied huddles of investment bankers. One comprised credit traders trying to agree an orderly unwinding of Lehman’s default swaps to avoid utter mayhem yesterday morning.
Another room was full of regulators trying to put a floor under AIG, the world’s biggest insurer, whose shares had crashed the previous week. The third was putting together a massive $50 billion rescue takeover by Bank of America of Merrill Lynch – the investment bank to broking giant that is famous for its ‘raging bull’ logo.” (end of quote.)
Now, remember this one thing, and do your homework on this: the Federal Reserve is not a government institution. It is a private bank, set up by the very people who represented the richest men in American in the latter 19th century and is today our all-powerful central bank. These money men gathered on Jekyll Island between 1890 – 1945 to map out the next 100 years of the American economy, their meetings culminating in the Federal Reserve Act of 1914. This illegal piece of legislation was passed while Congress’ back was turned. Or was it? (For a detailed treatment of this momentous period in American History, one that really brought us to this point, read “The Creature from Jekyll Island’ by Edward Griffiths.)
The bottom line: the consolidating of global finances continues, and must continue. The “Merchants of Menace” will see to it that economic power will end up in the hands of the few most powerful bankers and institutions in the world. This is a necessary chain of events to bring about a world where “No man may buy or sell save he that had the mark, or the name of the beast, or the number of his name.” (Rev. 13:17). This system will bring us a world where a loaf of bread will cost a day’s wage, and famine will be a part of every day life in this world (Rev. 6).This system must be the end result of each of these quakes and aftershocks in the market, as more and more signs of the times indicate that Jesus’ coming is quite near. As Christians we must not be alarmed about any of these developments, but continue to trust that the Lord has all things in control, no matter how disturbing. While men’s hearts will “fail them for fear for looking after those things which are coming on the earth” (Luke 21:26), our response to these birth pangs can only be to look up, for our redemption is drawing nigh! Maranatha!
About Mary
I have been a believer since 1981. Everything else before that is relatively meaningless. My heart has, from day 1, always been toward the subject of bible prophecy and I have seen the Lord do amazing things in my life through simply studying the Word and applying it to my life. I am a wife, grandmother and work full time in ministry. Life is full, and full of learning curves and seasons.