Ctrl BG: A Shortcut to Financial News 9/28

Since I enjoyed writing the last post so much, I've decided to continue to do so. It has proven to be a great way to help me put everything into perspective and it's been fascinating reading what everyone else thinks as well. Again, feel free to correct me and put in your two cents, as obviously, I am no expert. I'm just a girl who happens to be interested in the current state of the economy.

Last Sunday night, Goldman Sachs (GS) and Morgan Stanley (MS) were approved by the Fed to become bank holding firms, officially ending the era of the independent investment banking model on Wall Street. They will now be able to open their own commercial banking arms and take in deposits, which they can then use to back up their investment banking operations- as JP Morgan, Bank of America (BofA) etc already does- thus ending investor concerns about the sustainability of their business model model. They now also have permanent access to borrow federal money (instead of within the window temporarily opened for them) and can become a FDIC insured bank, which insures indivisuals up to $100,000 of bank deposits. The following day, MS announced that they were getting as much as $8.5 billion of cash injection from Japan's Mitsubishi UFJ Financial Group (MUFG) in exchange for up to 20% equity stake in MS, further fortifying their position. I guess the deal with China fell through (or were the Chinese getting too greedy and the US govt didn't like that?). This is probably a better move anyway, since MUFG is the world's No. 2 bank by deposits, so surely it will help MS's transition into commercial banking go more smoothly. MS apparently already has about $36 billion in bank deposits from their private wealth management (PWM) business and are looking to expand into Asia. Or so, that's what CNBC said, but I didn't know PWM deposits count as bank deposits, but if they do, I guess this means that MS are looking to expand their PWM business in Asia. Or perhaps this $36 billion comes from their Utah-base industrial bank, which will be converting into a national banking association, names the Morgan Stanley Bank, National Association? Goldman Sachs' approach is must easier to understand (or so I think). They currently already have two deposit taking subsidiaries, with about $20 billion in deposits, and plan to create a new one called GS Bank USA, that will have more than $150 billion of assets.

This conversion is not all good and dandy though. Becoming a bank holding also puts both banks under more intense scrutiny and regulations from the Fed, which will probably limit their proprietary trading capacities (the division where they trade company assets like a hedge fund, taking on great risks), which happens to be one of their most lucrative divisions. I don't know about MS but personally I'm feeling quite optimistic about GS. On Tuesday, Warren Buffet invested $5 billion in GS preferred stocks and will also recieved warrants to purchase another $5 billion in common stock within the next 5 years- effectively give him about a 10% stake in GS. They also raised another $5 billion from a public stock offering, all within a few days. This and Buffet's approval, which in the investment world is the equivalent of getting Anna Wintour's approval in the fashion world, make me quite optimistic. Besides, I have always had great confidence in the power of brand image, Buffet just likes to call it "franchise."

On Thursday, Washington Mutual (WaMu), was seized by the FDIC, making it the biggest banking failure ever. Within 9 days, customers withdrew about $16.7 million in deposits from WaMu, literally breaking the bank. JP Morgan picked up WaMu's banking assets for only $1.9 billion. JP has had its eye on WaMu's operations in CA and FL for a while, and had offered for them in March, but was rejected in favor of a capital injection from TPG private equity (whoops!). It seems like JP got yet another bargain. JP is not the only one who got a sweet deal in all this however. It appears that Mr. Alan Fishman, WaMu's CEO for only 2 weeks, is eligible for $11.6 million in cash severance AND get's to keep his $7.5 million signing bonus. Not bad for two weeks worth of work.

It seems that the financial tsunami is expanding abroad too. Fortis, the largest Belgian financial-services firm, just received an $11.2 billion euro bailout from Belgium, the Netherlands and Luxembourg in exchange for 49% stakes in the Fortis in their respective countries. It's almost like the European version of AIG.

The next bank on the chopping block is Wachovia- funny since a week ago they were in talks to merge with MS. Citigroup and Wells Fargo are currently in a bidding war over a possible emergency takeover of Wachovia, since it's stocks dropped dramatically on Friday.

While all this was going on, politicians were hard at "work" trying to get the $700 billion bailout bill to pass Congress. I'm not that into politics, but even I tuned in Wednesday morning to hear Paulson and Bernanke defend their case to the people at Congress. I'm not sure how politics usually go, but to my untrained ears, it sounded like a verbal merry-go-around, placing blames and trying to trick each other into saying something wrong. A members ask a simple yes/no question, Paulson/Bernanke would answer in a very roundabout way which prompts the member to ask, "so was that a yes or a no?" to which they'd repeat what they'd just said again. This would go on until the time is up or someone finally gives up from the frustration of it all. No wonder it takes them months to get a bill to past. I'd imagined it to be more diplomatic and sophisticated. Anyway, I think the gist was that people didn't think taxpayers should have to bailout Wall Street (and individual homeowners) for taking too on stupid risks. But they had to do something. So they moved onto putting clauses on the plan, for oversight to monitor the use of the money, a cap on CEO pays and for warrants in companies who will be using this plan, so taxpayers would at least get something back for the $700 billion they spent. There was a gliche, when a bunch of Republicans rejected the plan and proposed some other plan to privately insure mortgage backed securities (there was shouting involved!), but it sounds like they're back on track now and a bill will be voted on Monday.

Personally I don't know what to think about this bill. On one hand, I don't think tax payers should have to bail out people who took on unnecessary stupid risks and expect everyone else to wipe up their mess when things go down just because the mess is big enough. As if our future generations didn't already have a big enough debt to clear up already, with the war and the social security problem etc. but now we have this. On the other hand, just like a bad trend, someone has to step in and put a stop to it before it spreads through the population. With the newly added clauses, it's the next best step there is. By taking the distressed debts out of "weak" hands and into "strong" hands, they might even make money in the future when the housing prices go back up! Besides, if the likes of Paulson, Bernanke and Buffet, says this is a sound plan, who am I to gainsay the experts?

I Really Feel Okay About The Patricia Field For Home Shopping Network Collection!

I really really am. No irony, no shame. Now, I'll be honest, I watched like four total episodes of Sex and the City. Couldn't stand the show, had no patience for it. Thought they were obnoxious trannies perpetuating obnoxious myths about city dwelling (though Friends did a good job of that too with that 24,000-square-foot apartment and mouse-free coffee shop), and their version of being in control of their lives was acting like men with inverted penises. And they looked like trannies.

But I DID like the Patricia Field element of the show, though I do absolutely realize she was single-handledly responsible for trannifying the ladies. Regardless, Patricia Field has always been a style hero of mine, and I truly love the funners that is her Destination Style New York collection for Home Shopping Network:

($149, Patricia Field, Home Shopping Network)

Yes, it's THE SARAH-JESSICA PARKER SEX AND THE CITY FLOWER SHOULDER CORSAGE dress, but in black, and I think I like it better in black, actually. Especially if you're not Sarah Jessica Parker-weensy:
Also, the HSN version isn't AS intense -- doesn't look like an entire garden is blossoming upon your shoulder and rising up to eat your face. And that's a good thing. Granted, the model is a WEEEE bit too '80s-ed up AND like an underaged Balkan prostie, but it'd be super fun to wear the black version to a party, no? I sorta wanna have it just so I can look at it in what's referred to as a closet, but is really just a small crack in my wall that I've shoved clothing into.

($149, Patricia Field, Home Shopping Network)

Sequins are HAWT now, y'all. If this were red or white or silver or something, that'd be bad bad bad, but I love it in black. Very Dynasty. Makes me wish I were Joan Collins and I could rip Linda Evans' head off.

($49, Patricia Field, Home Shopping Network)

Love these black skinny jeans the F on the butt. Hee! Great deal too, and they go up to size 32. Which is nice!

More Patricia Field FashionBinge lurves here.

Now, two pieces from Patricia Field's online shop...

($88, Andrew Hamilton Crawford, Patricia Field)

Again, last thing I need is more chunky rings, but I love this Buddha ring!

($98, Patricia Field)

I didn't see the Sex and the City movie, but apparently trannyboy SaMANtha wore this, which wouldn't actually stop me from wearing it. It'd look so smooth with a little fitted blazer and tank.

Also, on a side note, I'm watching The Rachel Zoe Project right now. The episode where her studio floods. I love that she refers to that as a disaster. Um, now I'm not meteorologist, but wasn't Katrina a bit more of a disaster than a few couture gowns that need to be hung out to dry? Also, I love how, at Fashion Week, her token gay boy refers to the second row as "right behind the front row." Yes! Very good! And the alphabet consists of letters! Also, Rachel Zoe is like drowning is her own fat.

Finally, check out this amazing clip from Dynasty. By the time Joan Collins takes a spill down the stairs, you can TOTALLY tell it's a stunt woman in a wig. Classic.

Remembering Paul Newman

This is a very sad day for entertainment. Paul Newman passed away surrounded by loved ones at his Connecticut Home. The actor, philanthropist, and legend was 83 years old.

Hollywood will remember his long, successful career which included roles in the films Cat on a Hot Tin Roof, Butch Cassidy and the Sundance Kid, and the Color of Money. He was nominated for an Oscar ten times. Newman is also known for creating his own food empire, Newman's Own. His company has donated over $250 million dollars to charities personally selected by the actor.

Newman was the picture of class and honor. He was married to actress Joanne Woodward.

*WireImage

Kanye Has Something To Smile About

Looks like Kanye West will not face felony charges for the paparazzi scuffle involving him and his road manager, Don Crowley, at the LA airport earlier this month. Crowley has also been let off the hook for felony charges. Kanye blogged about the incident, saying, "We back in the lab!!! I'm cool with the paparazzi. This guy wasn't cool."

Zipper Dress

I adore this dress. It has a great juxtapostion of funky (the zipper) and soft and feminine. The fabric is crumbled paper print silk charmeuse. Available $260 at Basic Boutique.

DJ AM Back Home in L.A.

After spending six days in the hospital following a devastating plane crash that killed four people, DJ AM (Adam Goldstein) has been released from care and returned back to his home in Los Angeles. His famous friend and co-survivor, Blink 182's former drummer Travis Barker, is expected to be released in a couple weeks. Both underwent treatment for burns after surviving the crash last Saturday in South Carolina.

Lindsay Lohan's Lips Belt Buckle

(Credit: Revolution Pix/Fame Pictures/ People magazine)

Uh, that almost sounded bad... anyway, Lindsey's lips belt is really cute. (BTdubs, she looks like Blake Lively in this photo.) I'm sure it's like a bazillion-dollar vintage Vivienne Westwood piece, but here's a more affordable down-market version:

($14.99, Bucklecity.com)

Bucklecity -- city of buckles!

($16.95, Amazon)

Token sparkly lips.

(14.99, Catacombscds.com)

From deep within the catacombs of this rando website comes a very mod lips belt buckle I'd totally wear under the right circumstances.


... Also, feel free to track down Lala (of Lala The Art Geek), who MADE this belt HERSELF!!!!
Maybe she'll sell it to you!

($83, Golden-charms.com)

I would wear these fun dangly lips earrings under ANY circumstances.

($40, Dimoutshoes.com)

Um, so yeah. The platform of these shoes also pull double duty as a TIP JAR! For PUTTING COINS INTO! For when you work EXTRA HARD at work... and earn... CHANGE! For working REALLY REALLY HARD. On a POLE! With NO PANTS ON!

($199, Myfreakyfamily.com)

And a lips chair -- in red or pink! -- for when you've tired yourself out collectin' pennies in your platforms all night, gurlz!

Oh yeah, lest we forget, the inimitable Lipps Inc's "Funkytown" video! Classic!