Monday sees a dawn for markets--a false dawn, though.
Investors greeted the weekend development of the US Treasury taking over Fannie Mae and Freddie Mac, seeing it as a sign the housing problem was under control. Stock markets around the world rocket upward.
Lehman Brothers stock, however, does not participate in the party, losing 13 percent, despite reports company officials hope to cement plans to raise capitaland sell off bad debts sometime in the coming week.
But CNBC's Charlie Gasparino reports that Lehman is moving closer to selling its asset management division—including the "crown jewel," Neuberger Berman—in a sign that other efforts to raise capital have not been successful.
Others are also voicing misgivings: "This euphoria might fade, because Fannie and Freddie are not the problem," Christopher Low, chief economist at FTN Financial, tells CNBC. "Their woes are a symptom of a worldwide contraction in credit that may not be cured by the [bailout] decision."
Top investor Jim Rogers denounces the Treasury's moves as "communist" and "insanity":
"They have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I'm not quite sure why I or anybody else should be paying for this," Rogers tells CNBC.
Elsewhere in the financial industry, Washington Mutual — destined to be bought out by JPMorgan Chase — ousts Kerry Killinger as its CEO, planning to replace him with Alan Fishman, currently chairman of mortgage broker Meridian Capital Group, according to The Wall Street Journal.
What You Were Reading:
- US Is 'More Communist than China': Jim Rogers
- Lehman Is Moving Closer To Selling Key Business
- What the Fannie Bailout Will and Won't Do
Stocks careen in a way that would become all too familiar to investors through the autumn: The
Dow
