As of January this year the five largest investment banks in the US were:
1) Goldman Sachs
2) Morgan Stanley
3) Merrill Lynch
4) Lehman Bros
5) Bear Stearns
As of today numbers 5 through 3 have failed, leaving the top two.
Were you, like me, puzzled Monday when it was announced that these two remaining large investment banks have suddenly become “real” banks? The Fed bypassed their normal 30-day waiting period and blessed the transition effective immediately. (Of course, if you’re Goldman you just figure it’s just one of the “bennies” of having your former CEO as the Secretary of the Treasury.)
Look at GS’ web site for the explanation: “We understand that the market views oversight by the Federal Reserve and the ability to source insured bank deposits as providing a greater degree of safety and soundness.”
IOW, they’re just doing it to reassure everyone they’re sound.
Morgan Stanley and Goldman Sachs were made “real” banks so they can now belly up to the Fed’s begging bowl“short-term loan” window and get billions in cash on short notice. This handout is paid for by you and me. And yes, the “short-term” loans roll over indefinitely.
These two guys must really be on the ropes if they need to position themselves for emergency cash infusions.
◊◊◊◊ Now: Gold @ $881.50, Silver @ $13.26, USDX @ 76.94 ◊◊◊◊
◊◊◊◊ Now: DJIA 10,825.17