In "Fed Calls Emergency Consultants to Treat AIG, Stricken Markets," some startling news. This crisis is a big revenue generator for financial companies:
In addition to hiring consultants, the Fed and the Treasury have retained Wall Street firms to help manage more than $2 trillion in bailout and emergency-loan programs.
Pacific Investment Management Co. runs a $259 billion program to backstop the commercial-paper market. Blackrock Inc., Goldman Sachs Asset Management, Pimco and Wellington Management Co. are managing the Fed’s purchases of up to $500 billion of mortgage-backed securities. JPMorgan Chase & Co. oversees a separate program under which the Fed may lend up to $540 billion to support money market mutual funds.
All this while (also Bloomberg.com):
S&P 500 Dividends May Decrease 13.3%, Most Since 1942
Dividends for Standard & Poor’s 500 Index companies will probably plunge 13.3 percent this year, the steepest annual decline since 1942, S&P forecast.
Companies in the 500-stock index are on pace to make $214.7 billion in payouts in 2009, compared with $247.9 billion, S&P projected in a statement today.
This is not war-time in any way similar to 1942. What is going now is largely self-inflicted. It is a mess. Anyone who tries to pick a bottom in the economy or the markets is a gambler. Anyone who has a lot of confidence in the right things to do with money in these circumstances has a strong ego.
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