Financial headlines

Interesting week.

German state and private banks shored up IKB Deutsche to the tune of… well, they’re not saying, exactly… “in the interest of the financial market stability“. How could the U.S. housing market cause a German investment bank to threaten “financial market stability” enough to draw a multi-billion-Euro government bail-out? (Then again, a British economist much smarter than I says let them fail.)

American Home Mortgage is done. They laid off 6000 of their remaining 6500 employees with 24 hours’ notice. Stock went from $40 a year ago to $20 a month ago to $0.65 yesterday. Analysts helpfully revising their price targets to $0.

Indymac Bancorp’s CEO published a remarkable letter. “Unprecedented”, indeed.

Wells Fargo increased their rate for a 30-year fixed prime “jumbo” (> $417,000) mortgage from 6.87 to 8.00 percent. In one week. Other banks are following suit. Note the word “prime”. Sub-prime and Alt-A are disappearing completely, at least for now.

Bear Stearns’s heir apparent is getting canned next week. Yeah, that’ll help.

Jim Cramer blew a gasket on national TV. Do not miss this; it’s great television. (Although I admit I did not know who William Poole is.) Moral: When Wall Street forces a real-economy company to lay off half its workforce, that’s just the market being efficient. But when those same folks — who by the way created this little mess — face losing their half-million-dollar cars and multi-million-dollar homes and lingerie model mistresses… Well that’s a crisis, dammit, and it’s time for the Fed to get on the hump!