QuickStockAnalysis.com

Goldman Sachs, Morgan Stanley become bank-holding companies

The Federal Reserve said in a statement Sunday night that Goldman Sachs‘ and Morgan Stanley’s applications to become bank-holding companies were approved. The move effectively put an end to the industry of independent investment banking, although boutique security firms remain. The Fed will have oversight of and lend to Morgan Stanley and Goldman. The firms also will be subject to bank-capital requirements.

Australia, Taiwan, Netherlands join short selling ban

After crackdowns in the U.S. and the U.K. on short selling, Australia, Taiwan and the Netherlands announced restrictions to the strategy. Australia banned short selling of any stock, Taiwan plans to restrict short selling of the market’s 150 top stocks and the Dutch regulator prohibited naked short selling of banks for three months. The U.S. Securities and Exchange Commission is expected to alter its temporary ban on short selling.

Critics: Ratings downgraded too slowly at first, now too fast

After being criticized for cutting ratings on financial-service companies too slowly, credit-rating agencies are being attacked for downgrading too aggressively. Critics said rating agencies are again missing the mark with rapid downgrades, which have added to market volatility. They cited the way agencies handled AIG as an example.

U.S. officials consider creating vehicle for troubled assets

Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and leading lawmakers met Thursday to discuss the financial crisis. The Treasury said the meeting was held to discuss a “comprehensive approach to address the illiquid assets on bank balance sheets that are at the underlying source of the current stresses in our financial institutions and financial markets.” Speculation is mounting that the officials may create a government-backed vehicle similar to the Resolution Trust Corp. to take over troubled assets.

Russian index becomes world’s cheapest after trading halted

Russia’s RTS Index went from being the world’s best performer to the worst after the government stopped trading on two main exchanges Wednesday to prevent stocks from plummeting further. The index is valued at 5.6 times the earnings of its nearly 50 firms. The country reopened the stock exchanges Friday. The Russian Trading System lost more than 60% of its value since the beginning of July.