United States

Weekly musings from your editor, who looks like a goose on Thursday morning as the US market did exactly the opposite he thought it would do. Wednesday’s version has been amended.

A Fed rate cut of only 75bps was still enough to add impetus to a rally started when Goldman and Lehman beat the Street. The Dow jumped 420 points.

It has been revealed that as the Fed assisted in orchestrating the end of Bear Stearns on the weekend, it was simultaneously appealing to investment banks to rally around colleague Lehman Bros.

As the Fed steps up its financial market rescue, expectations are increasing that the G7 will be forced to intervene to save the US dollar.

A 21 point rise in the Dow belied another rollercoaster session in which traders tried to decide whether Bear Stearns could have signalled a bottom. The commodities bubble popped in a dash for cash.

Bear Stearns is small fry compared to America’s large commercial banks. James Turk looks at the biggest of them all – Citibank – and how it shapes up alongside the investment banks.

JP Morgan has acquired Bear Stearns not for US$20ps, but for US$2ps – all scrip. Goldman Sachs set to announce big losses. The Fed cuts the discount rate.

JP Morgan may have bought Bear Stearns by this morning while the Fed could cut 100 points.

The temporary bail-out of distressed US investment bank Bear Stearns poses all sorts of problems of its own.

There were two casualties of war on Wall Street on Friday – the truth, and Bear Stearns. Dow down 194. Gold over US$1001/oz.