.
September 18th, 2008
10:10 PM ET

How Financial Madness Overtook Wall Street

Andy Serwer and Allan Sloan
Time Magazine

If you're having a little trouble coping with what seems to be the complete unraveling of the world's financial system, you needn't feel bad about yourself. It's horribly confusing, not to say terrifying; even people like us, with a combined 65 years of writing about business, have never seen anything like what's going on. Some of the smartest, savviest people we know — like the folks running the U.S. Treasury and the Federal Reserve Board — find themselves reacting to problems rather than getting ahead of them. It's terra incognita, a place no one expected to visit.

Every day brings another financial horror show, as if Stephen King were channeling Alan Greenspan to produce scary stories full of negative numbers. One weekend, the Federal Government swallows two gigantic mortgage companies and dumps more than $5 trillion — yes, with a t — of the firms' debt onto taxpayers, nearly doubling the amount Uncle Sam owes to his lenders. While we're trying to get our heads around what amounts to the biggest debt transfer since money was created, Lehman Brothers goes broke, and Merrill Lynch feels compelled to shack up with Bank of America to avoid a similar fate. Then, having sworn off bailouts by letting Lehman fail and wiping out its shareholders, the Treasury and the Fed reverse course for an $85 billion rescue of creditors and policyholders of American International Group (AIG), a $1 trillion insurance company. Other once impregnable institutions may disappear or be gobbled up.

The scariest thing to average folk: one of the nation's biggest money-market mutual funds, the Reserve Primary, announced that it's going to give investors less than 100 cent on each dollar invested because it got stuck with Lehman securities it now considers worthless. If you can't trust your money fund, what can you trust? To use a technical term to describe this turmoil: yechhh!

Read More...


Filed under: Andy Serwer • Raw Politics • Wall St.
September 18th, 2008
09:40 PM ET

Live Blog from the Anchor Desk 9/18/08

For what’s in the program take a look at tonight’s Evening Buzz.

Don’t forget to watch Erica Hill’s webcast during the commercials.  LINK TO WEBCAST

And take a look at Anderson and Erica on our live web camera from the 360° studio. We’ll turn the camera on at 945p ET and turn it off at 11p ET. LINK TO THE BLOG CAMERA

Wondering why some comments are posted while others aren’t?  Here’s a post that may help: LINK TO COMMENTS POST

We’ll start posting comments at 10p ET and stop at 11p ET.


Filed under: Live Blog
September 18th, 2008
09:19 PM ET

Evening Buzz: Another Bailout Planned

Maureen Miller
AC360° Writer

Rescue Plan: Take 5? Or maybe it's 15? There have been so many lately. Now comes word the federal government is crafting a plan to rescue banks from bad mortgage debt. Just moments ago, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke talked about the possible options with leaders on Capitol Hill.

The proposal could be made public in a matter of hours. "We hope to move very quickly. Time is of the essence," House Speaker Nancy Pelosi said. We'll have the very latest on this breaking story tonight on 360.

Do you think the move will help resolve the crisis? We'd love to hear your thoughts.

Tonight, there's also a new development from Alaska on the investigation into Gov. Sarah Palin's firing of the state's public safety commissioner. A state Senate committee is scheduled to meet tomorrow to take statements from 12 people they subpoenaed last week, including Palin's husband. But the McCain-Palin campaign says Todd Palin won't comply with the subpoena. We'll have a live report from 360's Randi Kaye in Anchorage.

And, we've got the raw politics of going negative on the campaign trail. I'm sure you've seen some negative campaign ads. But who's doing airing them more these past couple of weeks? Barack Obama or John McCain? Find out, tonight on 360.


Filed under: Maureen Miller • The Buzz
September 18th, 2008
09:19 PM ET

Market mayhem survival tips

Editor's Note: Suze Orman will be on AC360° tonight at 10pm ET to discuss how to keep your money safe.  One way: check out her new partnership with the FDIC at myFDICinsurance.gov. On that site you can use her calculator to make sure the money you put in the bank is safe, and backed by the FDIC.

Suze Orman
Personal Finance Expert

I know this is a very scary time for all of you. Every day brings news of another Wall Street meltdown that triggers a big market loss. So far this week we have had two days when the major stock indexes lost more than 3%. AIG, the world’s largest insurance company, was on the brink of its own meltdown; for any of you with an AIG policy, that had to have ratcheted up your blood pressure. The Reserve Primary Fund—which is a large institutional money market fund—had to reduce its price from $1 to 97 cents, committing the cardinal sin of safe investing by “breaking the buck.”

It is perfectly reasonable to feel like the sky is falling. But I need you to listen to me: There is no need to panic. In fact, if you do panic and make rash financial moves today you will probably do the most damage to your long-term financial security.

Here’s what I DO WANT YOU TO DO HOWEVER:

Keep Your Money in the Bank.
I want you to open up another browser window on your computer right now and go to your bank’s website. Scroll around and look for the FDIC insured label. Seriously, go do that right now, I’ll wait.

Keep reading...


Filed under: Economy
September 18th, 2008
09:04 PM ET

Todd Palin: The "First Dude" of Alaska

Gov. Sarah Palin and her 'First Dude' Todd Palin

Gov. Sarah Palin and her 'First Dude' Todd Palin

Randi Kaye
AC360° Correspondent

ANCHORAGE, Alaska (CNN) – He’s the man Alaska Gov. Sarah Palin likes to affectionately call her “First Dude.”

Todd Palin was introduced to the nation at the Republican National Convention as a blue-collar oil worker. A laid back father of five and a world-record holding snowmobile racer.

He was also a member of Alaska’s Independence Party until 2002, a radical group that has long advocated secession of the state from the United States.

Todd and Sarah met in high school at a basketball game and eloped in 1988, six years after graduation. Todd grew up in Alaska and is part Eskimo. He’s an avid outdoorsman and champion of the Iron Dog snowmobile race.

Another image of Todd Palin has also emerged – he’s known by many as his wife’s greatest adviser and most loyal protector. One family friend told CNN, “Todd is incredibly supportive and is willing to do whatever it takes to help Sarah.”

FULL POST


Filed under: Randi Kaye • Raw Politics • Sarah Palin
September 18th, 2008
08:29 PM ET

360 Webcast: Baby names, blackberries, websites and recounts

David M. Reisner
AC360 Digital Producer

Ok so if you watched our '360 Webcast' last night you now know what all the fun is about.

We talked about the 'Sarah Palin Baby name generator' (What your name would really be if you were a member of the Palin family – more importantly, what Anderson, Erica, and Ali Velshi's names would be!)

We talked Blackberries, learned about CNN.com.... a possible recount in Florida...I could go on and on, but really, you should watch!

For those of you who didn't catch it – be sure to watch tonight – during commercial breaks!
all you have to do is click here – and the rest is magic!

Read more about what the '360 Webcast' is all about


Filed under: 360 Webcast • Behind The Scenes • T1
September 18th, 2008
06:54 PM ET

Blame boards of directors for financial mess

Traders on the floor of the New York Stock Exchange

Traders on the floor of the New York Stock Exchange

Nell Minow
Corporate Governance Expert

Failure this broad and deep takes a village, and regulators, lawyers, compensation consultants, auditors, executives, shareholders, and the press all played a part. But the people who are most responsible for the massive meltdowns of these institutions are the boards of directors.

Their sole responsibility is to act as fiduciaries for the shareholders in managing risk. They not only failed to perform this task but indeed, in their approval of outrageous pay plans with perverse incentives, they all but guaranteed the current disaster.

I am a capitalist. I love it when executives earn boatloads of money. But it infuriates me when they get it without earning it.

If the executives' compensation is tied to the volume of business rather than the quality of business, we should expect dealmakers to be more attentive to the number of transactions than the value they create. This is the basis for much of the sub-prime mess, whose collateral damage is taking down the biggest firms on Wall Street.

Keep Reading

Editor's Note: Nell Minow is editor and chair of The Corporate Library, an independent research company specializing in corporate governance. Minow was named one of the 20 most influential people in corporate governance by Directorship magazine in 2007 and "the queen of good corporate governance" by BusinessWeek Online in 2003. She has written more than 200 articles and co-written three books. Since 1995, Minow has also written "Movie Mom," an online parents' guide to "media, culture and values."


Filed under: Economy
September 18th, 2008
06:25 PM ET

Beat 360° 9/18/08

Ready for today's Beat 360°?

Everyday we post a picture – and you provide the caption and our staff will join in too.

Tune in every night at 10p ET to see if you are our favorite!
Here is 'Beat 360°’ pic of the day:

U.S. film director, Woody Allen gestures during the press conference promoting his new film at the 56th San Sebastian Film Festival in San Sebastian, Spain Thursday.

Have fun with it. We're looking forward to your captions!

Make sure to include your name, city, state (or country) so we can post your comment.
________________________________________________

Beat 360° Challenge

But wait!… There’s more!

When you win ‘Beat 360°’ not only do you get on-air prime-time name recognition (complete with bragging rights over all your friends, family, and jealous competitors), but you get a “I Won the Beat 360° Challenge” T-shirt!

Read more here….

Good luck to all!

Update: Check out today's winner!


Filed under: Beat 360° • T1
September 18th, 2008
05:00 PM ET

Once a defendant, now a defender

Editor’s Note:
O.J. Simpson is on trial for robbery and kidnapping charges nearly a year after police arrested him in Las Vegas, Nevada. Prosecutors say Simpson and five other men stormed into a Las Vegas hotel room last September 13 to recover sports memorabilia that Simpson said belonged to him. They say at least two men with Simpson had guns as they robbed two sports memorabilia dealers. The following dispatches come from our Paul Vercammen covering the trial.

--------------------------–
Paul Vercammen
CNN Senior Producer

One of the lawyers in the O.J. Simpson and Clarence Stewart armed robbery and kidnapping trial knows all about being arrested and being locked up.

E. Brent Bryson was accused of manslaughter for the death of a man in Wyoming in the early 1980s

"I have a little insight that a lot of guys (defense lawyers) don't," the third attorney added to the Stewart defense team told CNN. "I know what if feels like to sit in that chair."

The event that led Bryson to that defendant's chair was a 45 second fight in a Casper lounge.

"I was a professional musician playing with my band," the 51 year old remembers.

During the band's break, Bryson was attacked by a patron who accused him of taking his seat next to two women.

In a bloody brawl the assailant's neck was cut by a broken wine glass.
FULL POST

September 18th, 2008
03:06 PM ET

O.J. trial: "We're going to get him"

Editor’s Note:
O.J. Simpson is on trial for robbery and kidnapping charges nearly a year after police arrested him in Las Vegas, Nevada. Prosecutors say Simpson and five other men stormed into a Las Vegas hotel room last September 13 to recover sports memorabilia that Simpson said belonged to him. They say at least two men with Simpson had guns as they robbed two sports memorabilia dealers. The following dispatches come from our Paul Vercammen covering the trial.

--------------------------–

O.J. Simpson speaks to a member of his defense team.

O.J. Simpson speaks to a member of his defense team.

Paul Vercammen
CNN Senior Producer

11:39am PT

Judge Jackie Glass called an unusual early lunch break as the attornies whizzed through three police witnesses.

Simpson defense attorney Yale Galanter hammered away at detective Andy Caldwell.

Galanter asked Caldwell about an audio recording in which officers could be heard allegedly saying 'They didn't get him (Simpson) in California, we're going to get him now."

The detective said he did not recall hearing those words.

Court broke at 11:15 and resumes at 12:30pm PT.

« older posts