Wow ! KLCI is really strong and moving to try to close on the positive.
Tuesday, September 30, 2008
11:14 am - Market Report on DJIA -777 plunge by Bill Wermine
Dear Traders,
There has been threats by George Bush that if the congress does does not pass the bailout bill the world financial system will collapse. Bush used the same tactics to scare the public and congress to authorize the invason of Iraq. His action was based on lies as Iraq was never a threat to the US and had nothing to do with 9-11 and had no weapons of mass distructions.
Bush with his chronies Bernenke and Paulson are lying to the public again by using fear and panic to force the congress to agree to a plan which is ill conceived. They have got the media behind them to brainwash the public.
This plan is not in the public's interest but in the interest of the super rich, the well connected and the banking establishment. The insiders will engineer a stock market panic to scare the public into agreeing with their plan. The super rich insiders will buy the shares sold by the sheep who are caught up in fear and doom and gloom
Do not be fooled- never sell a low. Smart money will take the other side of your trade.
Michael Moore who is a thorn in the side of Bush and his band of crooks and thieves wrote an interesting analysis which I share below.
Also, I am happy to be living in Malaysia where the markets and the economy are run more prudently than in the US, UK and Europe. Malaysian banks are not caught up in the mortgage sub prime collapse which was engineered by the investment banks on Wall St to enrich the priviledged few.
Continue to hold quality KLSE shares and do not panic !
Keep your cool
Bill
Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies -- who must soon vacate the White House -- are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door.
No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four paragraphs of the lead story in last Monday's New York Times and you can see what the real deal is:
"Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it. "Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages. "At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees. "Nobody wants to be left out of Treasury's proposal to buy up bad assets of financial institutions."
Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even Rudy Giuliani is lobbying for his firm to be hired (and paid) to "consult" in the bailout.
The problem is, nobody truly knows what this "collapse" is all about. Even Treasury Secretary Paulson admitted he doesn't know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of the congressional budget office said he can't figure it out nor can he explain it to anyone.
And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu! Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling!
Falling for whom? NOTHING in this "bailout" package will lower the price of the gas you have to put in your car to get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health insurance.
Health insurance? Mike, why are you bringing this up? What's this got to do with the Wall Street collapse?
It has everything to do with it. This so-called "collapse" was triggered by the massive defaulting and foreclosures going on with people's home mortgages. Do you know why so many Americans are losing their homes? To hear the Republicans describe it, it's because too many working class idiots were given mortgages that they really couldn't afford. Here's the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me state this simply: If we had had universal health coverage, this mortgage "crisis" may never have happened.
This bailout's mission is to protect the obscene amount of wealth that has been accumulated in the last eight years. It's to protect the top shareholders who own and control corporate America. It's to make sure their yachts and mansions and "way of life" go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them end the war immediately and save us all another half-trillion dollars!
I have to stop writing this and you have to stop reading it. They are staging a financial coup this morning in our country. They are hoping Congress will act fast before they stop to think, before we have a chance to stop them ourselves. So stop reading this and do something -- NOW! Here's what you can do immediately:
1. Call or e-mail Senator Obama. Tell him he does not need to be sitting there trying to help prop up Bush and Cheney and the mess they've made. Tell him we know he has the smarts to slow this thing down and figure out what's the best route to take. Tell him the rich have to pay for whatever help is offered. Use the leverage we have now to insist on a moratorium on home foreclosures, to insist on a move to universal health coverage, and tell him that we the people need to be in charge of the economic decisions that affect our lives, not the barons of Wall Street.
2. Take to the streets. Participate in one of the hundreds of quickly-called demonstrations that are taking place all over the country (especially those near Wall Street and DC).
3. Call your Representative in Congress and your Senators. (click here to find their phone numbers). Tell them what you told Senator Obama.
When you screw up in life, there is hell to pay. Each and every one of you reading this knows that basic lesson and has paid the consequences of your actions at some point. In this great democracy, we cannot let there be one set of rules for the vast majority of hard-working citizens, and another set of rules for the elite, who, when they screw up, are handed one more gift on a silver platter. No more! Not again!
Yours,Michael MooreMMFlint@aol.comMichaelMoore.com
P.S. Having read further the details of this bailout bill, you need to know you are being lied to. They talk about how they will prevent golden parachutes. It says NOTHING about what these executives and fat cats will make in SALARY. According to Rep. Brad Sherman of California, these top managers will continue to receive million-dollar-a-month paychecks under this new bill. There is no direct ownership given to the American people for the money being handed over. Foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 billion is going to be given directly to Chinese and Middle Eastern banks. There is NO guarantee of ever seeing that money again.
P.P.S. From talking to people I know in DC, they say the reason so many Dems are behind this is because Wall Street this weekend put a gun to their heads and said either turn over the $700 billion or the first thing we'll start blowing up are the pension funds and 401(k)s of your middle class constituents. The Dems are scared they may make good on their threat. But this is not the time to back down or act like the typical Democrat we have witnessed for the last eight years. The Dems handed a stolen election over to Bush. The Dems gave Bush the votes he needed to invade a sovereign country. Once they took over Congress in 2007, they refused to pull the plug on the war. And now they have been cowered into being accomplices in the crime of the century. You have to call them now and say "NO!" If we let them do this, just imagine how hard it will be to get anything good done when President Obama is in the White House. THESE DEMOCRATS ARE ONLY AS STRONG AS THE BACKBONE WE GIVE THEM. CALL CONGRESS NOW.
There has been threats by George Bush that if the congress does does not pass the bailout bill the world financial system will collapse. Bush used the same tactics to scare the public and congress to authorize the invason of Iraq. His action was based on lies as Iraq was never a threat to the US and had nothing to do with 9-11 and had no weapons of mass distructions.
Bush with his chronies Bernenke and Paulson are lying to the public again by using fear and panic to force the congress to agree to a plan which is ill conceived. They have got the media behind them to brainwash the public.
This plan is not in the public's interest but in the interest of the super rich, the well connected and the banking establishment. The insiders will engineer a stock market panic to scare the public into agreeing with their plan. The super rich insiders will buy the shares sold by the sheep who are caught up in fear and doom and gloom
Do not be fooled- never sell a low. Smart money will take the other side of your trade.
Michael Moore who is a thorn in the side of Bush and his band of crooks and thieves wrote an interesting analysis which I share below.
Also, I am happy to be living in Malaysia where the markets and the economy are run more prudently than in the US, UK and Europe. Malaysian banks are not caught up in the mortgage sub prime collapse which was engineered by the investment banks on Wall St to enrich the priviledged few.
Continue to hold quality KLSE shares and do not panic !
Keep your cool
Bill
Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies -- who must soon vacate the White House -- are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door.
No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four paragraphs of the lead story in last Monday's New York Times and you can see what the real deal is:
"Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it. "Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages. "At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees. "Nobody wants to be left out of Treasury's proposal to buy up bad assets of financial institutions."
Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even Rudy Giuliani is lobbying for his firm to be hired (and paid) to "consult" in the bailout.
The problem is, nobody truly knows what this "collapse" is all about. Even Treasury Secretary Paulson admitted he doesn't know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of the congressional budget office said he can't figure it out nor can he explain it to anyone.
And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu! Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling!
Falling for whom? NOTHING in this "bailout" package will lower the price of the gas you have to put in your car to get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health insurance.
Health insurance? Mike, why are you bringing this up? What's this got to do with the Wall Street collapse?
It has everything to do with it. This so-called "collapse" was triggered by the massive defaulting and foreclosures going on with people's home mortgages. Do you know why so many Americans are losing their homes? To hear the Republicans describe it, it's because too many working class idiots were given mortgages that they really couldn't afford. Here's the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me state this simply: If we had had universal health coverage, this mortgage "crisis" may never have happened.
This bailout's mission is to protect the obscene amount of wealth that has been accumulated in the last eight years. It's to protect the top shareholders who own and control corporate America. It's to make sure their yachts and mansions and "way of life" go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them end the war immediately and save us all another half-trillion dollars!
I have to stop writing this and you have to stop reading it. They are staging a financial coup this morning in our country. They are hoping Congress will act fast before they stop to think, before we have a chance to stop them ourselves. So stop reading this and do something -- NOW! Here's what you can do immediately:
1. Call or e-mail Senator Obama. Tell him he does not need to be sitting there trying to help prop up Bush and Cheney and the mess they've made. Tell him we know he has the smarts to slow this thing down and figure out what's the best route to take. Tell him the rich have to pay for whatever help is offered. Use the leverage we have now to insist on a moratorium on home foreclosures, to insist on a move to universal health coverage, and tell him that we the people need to be in charge of the economic decisions that affect our lives, not the barons of Wall Street.
2. Take to the streets. Participate in one of the hundreds of quickly-called demonstrations that are taking place all over the country (especially those near Wall Street and DC).
3. Call your Representative in Congress and your Senators. (click here to find their phone numbers). Tell them what you told Senator Obama.
When you screw up in life, there is hell to pay. Each and every one of you reading this knows that basic lesson and has paid the consequences of your actions at some point. In this great democracy, we cannot let there be one set of rules for the vast majority of hard-working citizens, and another set of rules for the elite, who, when they screw up, are handed one more gift on a silver platter. No more! Not again!
Yours,Michael MooreMMFlint@aol.comMichaelMoore.com
P.S. Having read further the details of this bailout bill, you need to know you are being lied to. They talk about how they will prevent golden parachutes. It says NOTHING about what these executives and fat cats will make in SALARY. According to Rep. Brad Sherman of California, these top managers will continue to receive million-dollar-a-month paychecks under this new bill. There is no direct ownership given to the American people for the money being handed over. Foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 billion is going to be given directly to Chinese and Middle Eastern banks. There is NO guarantee of ever seeing that money again.
P.P.S. From talking to people I know in DC, they say the reason so many Dems are behind this is because Wall Street this weekend put a gun to their heads and said either turn over the $700 billion or the first thing we'll start blowing up are the pension funds and 401(k)s of your middle class constituents. The Dems are scared they may make good on their threat. But this is not the time to back down or act like the typical Democrat we have witnessed for the last eight years. The Dems handed a stolen election over to Bush. The Dems gave Bush the votes he needed to invade a sovereign country. Once they took over Congress in 2007, they refused to pull the plug on the war. And now they have been cowered into being accomplices in the crime of the century. You have to call them now and say "NO!" If we let them do this, just imagine how hard it will be to get anything good done when President Obama is in the White House. THESE DEMOCRATS ARE ONLY AS STRONG AS THE BACKBONE WE GIVE THEM. CALL CONGRESS NOW.
8:58 am - U.S. Stocks Plunge After House Votes Against Bailout Plan
U.S. Stocks Plunge After House Votes Against Bailout Plan
By Eric Martin
Sept. 29 (Bloomberg) -- U.S. stocks plunged and the Standard & Poor's 500 Index tumbled the most since the 1987 crash after the House of Representatives rejected a $700 billion plan to rescue the financial system.
The Dow Jones Industrial Average slid 778 points for its biggest point drop ever as $1.2 trillion in market value was erased from American equities. The MSCI World Index of 23 developed markets slid 6.9 percent, the most in 21 years.
Wachovia Corp. tumbled 82 percent after the bank was sold to Citigroup Inc. in a deal brokered by the Federal Deposit Insurance Corp., sending shares of Sovereign Bancorp Inc. down 72 percent and National City Corp. 63 percent lower. Goldman Sachs Group Inc. and Morgan Stanley, the two largest Wall Street securities firms, fell more than 12 percent. General Motors Corp., Chevron Corp. and Intel Corp. sank more than 10 percent each as all 30 Dow average stocks lost at least 2.8 percent.
``We've completely decimated confidence in the markets,'' said James Dunigan, managing executive of investments at PNC Wealth Management, which oversees $66 billion in Philadelphia. ``I appreciate their wanting to be a watchdog. On the other hand, if the kitchen's on fire, you don't want it to spread to rest of the house.''
The S&P 500 decreased 106.59 points, or 8.8 percent, to 1,106.42. The Dow slid 7 percent to 10,365.45. The Nasdaq Composite Index declined 199.61, or 9.1 percent, to 1,983.73, its steepest plunge since April 2000. Twenty-five stocks fell for each that rose on the New York Stock Exchange as 2 billion shares were traded on the floor, 35 percent more than the three- month average.
Four-Year Low
The S&P 500 sank to its lowest level since October 2004 as all 10 of its industry groups tumbled at least 4.2 percent. Campbell Soup Co. was the only stock in the benchmark index for U.S. equities to advance. The Dow average's retreat was its steepest on a percentage basis since the first trading day after the September 2001 terrorist attacks, sending the 30-stock gauge to an almost three-year low. A gauge of expected stock-market volatility climbed to a record.
Congressmen voted 228 to 205 against the measure to authorize the biggest government intervention into markets since the Great Depression, extending the S&P 500's decline in September to 14 percent, its worst month since the collapse of hedge fund Long Term Capital Management 10 years ago. The defeat of the legislation set off a scramble among the plan's backers for additional support before another vote, which likely won't come until later in the week.
`Unimaginable'
``They've got to come up with something or the damage is unimaginable,'' said Henry Herrmann, Overland Park, Kansas-based president and chief executive officer of Waddell & Reed Financial Inc., which manages $70 billion.
Benchmark indexes extended earlier declines spurred when Wachovia joined three European banks in requiring government- orchestrated rescues.
Sovereign Bancorp, the second-largest U.S. savings and loan, plunged $6.04 to $2.33. National City, Ohio's biggest bank, lost $2.35 to $1.36.
State Street Corp., the world's biggest money manager for institutions, tumbled 27 percent. Fifth Third Bancorp slid 44 percent and CIT Group Inc. declined 25 percent, while Bank of New York Mellon Corp. lost 27 percent.
Morgan Stanley dropped $3.76, or 15 percent, to $20.99, a 10-year low. The fifth-largest bank-holding company, seeking to shore up investor confidence after borrowing costs climbed and its stock fell by half, agreed to sell a 21 percent stake to Japan's Mitsubishi UFJ Financial Group Inc. for $9 billion. Goldman Sachs declined $17.29 to $120.70.
`A Nightmare'
The S&P 500 Financials Index slid 16 percent, its steepest tumble since the gauge's creation in 1989. American Express Co., Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. lost more than 10 percent each.
``It's pretty much a nightmare,'' said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages $5 billion in San Antonio. ``This is the worst we've seen it since the credit mess started. Until we know exactly why they didn't pass it, we're going to be selling off for a while.''
Wachovia, Citigroup
Wachovia sank $8.16 to $1.84. The FDIC helped arrange the takeover of Wachovia's banking operations by Citigroup, the largest U.S. bank by assets. Citigroup will absorb as much as $42 billion of losses on Wachovia's $312 billion pool of loans, the FDIC said in a statement. The all-stock deal equals about $1 a share for the Charlotte-based bank, ranked sixth by assets in the U.S. All depositors will be protected, according to the FDIC
Citigroup lost $2.40 to $17.75. The New York-based bank plans to cut its own dividend in half and raise $10 billion in capital as it takes on Wachovia's senior and subordinated debt.
An index tracking the performance of stocks the U.S. Securities and Exchange Commission banned investors from selling short retreated 12 percent today.
Energy producers posted the second-biggest drop among 10 groups in the S&P 500 after financials, losing 11 percent for their steepest tumble since 1989. Crude oil plunged $10.52, or 9.8 percent, to $96.37, leading commodities including copper and corn lower on concern global economies will slow after the failure of the bailout plan in Washington.
Exxon, Apple Tumble
Exxon Mobil Corp., the largest U.S. energy company, dropped $6.59, or 8.2 percent, to $74.06. ConocoPhillips, the third- biggest U.S. oil company, fell $6.93, or 9.1 percent, to $69.31.
Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, lost $10.60 to $53.22. Copper fell 5.5 percent to $2.9065 a pound on the Comex division of the New York Mercantile Exchange.
Apple Inc. dropped $22.98, or 18 percent, to $105.26 on the Nasdaq Stock Market, its steepest loss in eight years. The maker of the iPod media player, iPhone and Mac computers was cut to ``equal weight'' from ``overweight'' by Morgan Stanley analysts, who predicted a 10 percent slump in the shares and said the stock's price doesn't yet reflect slowing demand.
The VIX index of U.S. options, as the Chicago Board Options Exchange Volatility Index is known, rose 34 percent to a record 46.72. The VIX gauges the cost of using options as insurance against further losses in the stock market.
Today's sell-off extended the S&P 500's decline from an October record to 29 percent. Financial firms in the S&P 500 lost half their value over the same time, dragged down by more than $591 billion in losses from the collapse of the subprime mortgage market. Third-quarter earnings at S&P 500 companies declined 3 percent on average, according to analysts' estimates compiled by Bloomberg, weighed down by a 56 percent slide in profits at financial firms.
`Unwind Into Chaos'
``There's a real opportunity for this thing to totally unwind into chaos if we can't get some real direction from Washington,'' said Russ Kamp, chief executive officer of Invesco Quantitative Strategies, which manages about $461 billion in New York.
A gauge of financial-services companies in Europe's Dow Jones Stoxx 600 Index slid 9.8 percent, the steepest retreat since the gauge was created in 1991, after three banks in the region required government-orchestrated rescues.
Belgium, the Netherlands and Luxembourg invested 11.2 billion euros ($16.3 billion) in Brussels and Amsterdam-based Fortis, Belgium's largest financial-services firm, to restore confidence in the bank. Bingley, England-based Bradford & Bingley Plc, Britain's biggest lender to landlords, was seized by the U.K. government after the credit crisis shut off funding. Hypo Real Estate Holding AG, Germany's second-biggest commercial-property lender, received a 35 billion euro loan guarantee to fend of insolvency.
Borrowing Costs
The euro interbank offered rate, or Euribor, rose 10 basis points to 5.24 percent, the biggest jump since June, the European Banking Federation said today. Singapore's benchmark rate for three-month U.S. dollar loans rose to the highest level in eight months.
``It's critical that we get something done here,'' Jeffrey Saut, who helps oversee $190 billion as chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said in a Bloomberg Television interview. ``The credit system is seizing up.''
Traders booed on the floor of the New York Stock Exchange as the closing bell rang.
The Dow average swung by more than 200 points during fifteen trading days in September as the government seized the two largest U.S. mortgage-finance companies, Fannie Mae and Freddie Mac; Lehman Brothers Holdings Inc. filed for bankruptcy; Merrill Lynch & Co. agreed to sell itself to Bank of America; American International Group Inc. was taken over by the Treasury; and Washington Mutual Inc. was seized by regulators in the biggest U.S. bank failure in history.
Treasury prices surged, sending two-year note yields down 39 basis points to 1.71 percent. The dollar fell against the yen, while rising against the euro and climbing the most against the British pound in 16 years.
By Eric Martin
Sept. 29 (Bloomberg) -- U.S. stocks plunged and the Standard & Poor's 500 Index tumbled the most since the 1987 crash after the House of Representatives rejected a $700 billion plan to rescue the financial system.
The Dow Jones Industrial Average slid 778 points for its biggest point drop ever as $1.2 trillion in market value was erased from American equities. The MSCI World Index of 23 developed markets slid 6.9 percent, the most in 21 years.
Wachovia Corp. tumbled 82 percent after the bank was sold to Citigroup Inc. in a deal brokered by the Federal Deposit Insurance Corp., sending shares of Sovereign Bancorp Inc. down 72 percent and National City Corp. 63 percent lower. Goldman Sachs Group Inc. and Morgan Stanley, the two largest Wall Street securities firms, fell more than 12 percent. General Motors Corp., Chevron Corp. and Intel Corp. sank more than 10 percent each as all 30 Dow average stocks lost at least 2.8 percent.
``We've completely decimated confidence in the markets,'' said James Dunigan, managing executive of investments at PNC Wealth Management, which oversees $66 billion in Philadelphia. ``I appreciate their wanting to be a watchdog. On the other hand, if the kitchen's on fire, you don't want it to spread to rest of the house.''
The S&P 500 decreased 106.59 points, or 8.8 percent, to 1,106.42. The Dow slid 7 percent to 10,365.45. The Nasdaq Composite Index declined 199.61, or 9.1 percent, to 1,983.73, its steepest plunge since April 2000. Twenty-five stocks fell for each that rose on the New York Stock Exchange as 2 billion shares were traded on the floor, 35 percent more than the three- month average.
Four-Year Low
The S&P 500 sank to its lowest level since October 2004 as all 10 of its industry groups tumbled at least 4.2 percent. Campbell Soup Co. was the only stock in the benchmark index for U.S. equities to advance. The Dow average's retreat was its steepest on a percentage basis since the first trading day after the September 2001 terrorist attacks, sending the 30-stock gauge to an almost three-year low. A gauge of expected stock-market volatility climbed to a record.
Congressmen voted 228 to 205 against the measure to authorize the biggest government intervention into markets since the Great Depression, extending the S&P 500's decline in September to 14 percent, its worst month since the collapse of hedge fund Long Term Capital Management 10 years ago. The defeat of the legislation set off a scramble among the plan's backers for additional support before another vote, which likely won't come until later in the week.
`Unimaginable'
``They've got to come up with something or the damage is unimaginable,'' said Henry Herrmann, Overland Park, Kansas-based president and chief executive officer of Waddell & Reed Financial Inc., which manages $70 billion.
Benchmark indexes extended earlier declines spurred when Wachovia joined three European banks in requiring government- orchestrated rescues.
Sovereign Bancorp, the second-largest U.S. savings and loan, plunged $6.04 to $2.33. National City, Ohio's biggest bank, lost $2.35 to $1.36.
State Street Corp., the world's biggest money manager for institutions, tumbled 27 percent. Fifth Third Bancorp slid 44 percent and CIT Group Inc. declined 25 percent, while Bank of New York Mellon Corp. lost 27 percent.
Morgan Stanley dropped $3.76, or 15 percent, to $20.99, a 10-year low. The fifth-largest bank-holding company, seeking to shore up investor confidence after borrowing costs climbed and its stock fell by half, agreed to sell a 21 percent stake to Japan's Mitsubishi UFJ Financial Group Inc. for $9 billion. Goldman Sachs declined $17.29 to $120.70.
`A Nightmare'
The S&P 500 Financials Index slid 16 percent, its steepest tumble since the gauge's creation in 1989. American Express Co., Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. lost more than 10 percent each.
``It's pretty much a nightmare,'' said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages $5 billion in San Antonio. ``This is the worst we've seen it since the credit mess started. Until we know exactly why they didn't pass it, we're going to be selling off for a while.''
Wachovia, Citigroup
Wachovia sank $8.16 to $1.84. The FDIC helped arrange the takeover of Wachovia's banking operations by Citigroup, the largest U.S. bank by assets. Citigroup will absorb as much as $42 billion of losses on Wachovia's $312 billion pool of loans, the FDIC said in a statement. The all-stock deal equals about $1 a share for the Charlotte-based bank, ranked sixth by assets in the U.S. All depositors will be protected, according to the FDIC
Citigroup lost $2.40 to $17.75. The New York-based bank plans to cut its own dividend in half and raise $10 billion in capital as it takes on Wachovia's senior and subordinated debt.
An index tracking the performance of stocks the U.S. Securities and Exchange Commission banned investors from selling short retreated 12 percent today.
Energy producers posted the second-biggest drop among 10 groups in the S&P 500 after financials, losing 11 percent for their steepest tumble since 1989. Crude oil plunged $10.52, or 9.8 percent, to $96.37, leading commodities including copper and corn lower on concern global economies will slow after the failure of the bailout plan in Washington.
Exxon, Apple Tumble
Exxon Mobil Corp., the largest U.S. energy company, dropped $6.59, or 8.2 percent, to $74.06. ConocoPhillips, the third- biggest U.S. oil company, fell $6.93, or 9.1 percent, to $69.31.
Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, lost $10.60 to $53.22. Copper fell 5.5 percent to $2.9065 a pound on the Comex division of the New York Mercantile Exchange.
Apple Inc. dropped $22.98, or 18 percent, to $105.26 on the Nasdaq Stock Market, its steepest loss in eight years. The maker of the iPod media player, iPhone and Mac computers was cut to ``equal weight'' from ``overweight'' by Morgan Stanley analysts, who predicted a 10 percent slump in the shares and said the stock's price doesn't yet reflect slowing demand.
The VIX index of U.S. options, as the Chicago Board Options Exchange Volatility Index is known, rose 34 percent to a record 46.72. The VIX gauges the cost of using options as insurance against further losses in the stock market.
Today's sell-off extended the S&P 500's decline from an October record to 29 percent. Financial firms in the S&P 500 lost half their value over the same time, dragged down by more than $591 billion in losses from the collapse of the subprime mortgage market. Third-quarter earnings at S&P 500 companies declined 3 percent on average, according to analysts' estimates compiled by Bloomberg, weighed down by a 56 percent slide in profits at financial firms.
`Unwind Into Chaos'
``There's a real opportunity for this thing to totally unwind into chaos if we can't get some real direction from Washington,'' said Russ Kamp, chief executive officer of Invesco Quantitative Strategies, which manages about $461 billion in New York.
A gauge of financial-services companies in Europe's Dow Jones Stoxx 600 Index slid 9.8 percent, the steepest retreat since the gauge was created in 1991, after three banks in the region required government-orchestrated rescues.
Belgium, the Netherlands and Luxembourg invested 11.2 billion euros ($16.3 billion) in Brussels and Amsterdam-based Fortis, Belgium's largest financial-services firm, to restore confidence in the bank. Bingley, England-based Bradford & Bingley Plc, Britain's biggest lender to landlords, was seized by the U.K. government after the credit crisis shut off funding. Hypo Real Estate Holding AG, Germany's second-biggest commercial-property lender, received a 35 billion euro loan guarantee to fend of insolvency.
Borrowing Costs
The euro interbank offered rate, or Euribor, rose 10 basis points to 5.24 percent, the biggest jump since June, the European Banking Federation said today. Singapore's benchmark rate for three-month U.S. dollar loans rose to the highest level in eight months.
``It's critical that we get something done here,'' Jeffrey Saut, who helps oversee $190 billion as chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said in a Bloomberg Television interview. ``The credit system is seizing up.''
Traders booed on the floor of the New York Stock Exchange as the closing bell rang.
The Dow average swung by more than 200 points during fifteen trading days in September as the government seized the two largest U.S. mortgage-finance companies, Fannie Mae and Freddie Mac; Lehman Brothers Holdings Inc. filed for bankruptcy; Merrill Lynch & Co. agreed to sell itself to Bank of America; American International Group Inc. was taken over by the Treasury; and Washington Mutual Inc. was seized by regulators in the biggest U.S. bank failure in history.
Treasury prices surged, sending two-year note yields down 39 basis points to 1.71 percent. The dollar fell against the yen, while rising against the euro and climbing the most against the British pound in 16 years.
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