Treasury Will Guarantee Mitsubishi's Investment In Morgan Stanley

In what could set an important precedent, federal officials assured a big Japanese bank late Sunday that its planned investment in the embattled Wall Street giant Morgan Stanley would be protected, The New York Times's Andrew Ross Sorkin reported, citing people involved in the talks.

After two days of tense negotiations, Treasury officials urged a hesitant Mitsubishi UFJ Financial Group to proceed with its $9 billion investment in Morgan Stanley, which has sought the capital infusion to reassure investors and customers about its stability, The Times reported.

The deal is considered a crucial step in the government's strategy for revitalizing the financial system by luring outside investment while it considers buying stock in banks directly. The transaction's failure would deal a blow to that effort and potentially unnerve the financial markets.

Read the whole story here.

Comments

[truthskr]

Gee, I guess Zoe Cruz's dismissal didn't solve all of their problems, huh? Big shocker. Well, I guess that took more than one sub-prime mortgage evangelizing idiot to sink the Morgan Stanley ship.

I love that these massive investment firms, who supposedly employ the best and the brightest, and whose business it is to advise investors, seem utterly incapable of investing or managing money. Instead, they appear to know nothing as it pertains to their primary lines of business, and once in debt want to be bailed out, either by solvent foreign firms who actually know what they are doing, by and large, or by our government who, 55 trillion in the hole, has no business giving any company or industry a penny, particularly in a much lauded free trade market.

I thought free trade was suppose to self-regulate? Well, if that's the case, they why are we bailing out companies and industries (airline, automotive, financial) that have proven themselves incapable of operating or surviving on their own in the marketplace? The individual citizen is certainly expected to sink or swim on their own with little in the way of anything resembling a government bailout.

I certainly see why it is in nearly everyone's best interests that these institutions are not allow to simply collapse, thereby descending the global economy into a deep and lasting depression, but at what point do we abandon this free trade fairytale and get back to the necessary market regulations?

[Pete2069]

Our government can guarantee foreign investment in financial markets , in which they are buying our country though a back door,,, but do nothing for our infrastructure and social programs...
Now Maryland is going to drop the gas tax and charge people per mile they travel on the roads...
Of course corporations will be controlling the tolls and money for this very expensive tax to the American citizen...They are creating a EXXON controlling our roads and transportation system...
When is enough ,,, enough.....
We are spending over 50 or 60 percent of our tax money for our Military and to invade other countries for the benefit of oil companies and Bush's dreams.... Corporation has just about stop paying into our tax funds , while our government hands our resources and infrastructure to private corporationsfor their control and wealth..and again and again we get screwed...
They just keep finding new ways of taxing us without calling it a tax..
Hell or a job Bush ,, you have destroy the American citizen from having a say or part in our government and it's policies...
When is the TEA PARTY to begin...

[Pete2069]

Now we know why they wanted our tax money....
Our government and corporations (not U.S. anymore) are out of control and the American citizens are no longer any of their concerns....
Except for our money they so arroganty use as they d... well please.
WAKE UP AMERICANS the 12th hand on the clock is about to strike...

[Pete2069]

Where have our jobs , manufacturing plants , government contracts , corporations left for .
Where is our money going that we have to borrow from China to put on "OUR" credit card to pay their crimes/bills...
Do you believe Goldman Sac , Morgan Stanley , Carlyle Group , Bank America , Citigroup or any of their global empires give a d... about the litte people...

**************************
Carlyle connection to Citigroup.....and the financial interprise..
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=104&topic_id=2123068&mesg_id=2140428
February 22, 2004
Citigroup to Acquire KorAm Bank for KRW 3.18 Trillion ($2.73 Billion)*
Seoul, Korea and New York, NY " Citigroup (NYSE: C) and KorAm Bank (KSE: 016830.KS) today announced that they, together with an investor consortium led by The Carlyle Group and JP Morgan Corsair II, have signed an agreement for the acquisition of KorAm by Citigroup. The terms of the transaction include the acquisition of the consortium"s 36.6% stake in KorAm and a tender offer for up to 100% of the remaining shares at a price of KRW 15,500 per share in cash, or a total of KRW 3.18 trillion ($2.73 billion).

******
http://www.citi.com/locations/
With 1,400 branches and 3,800 ATMs in 46 countries, Citibank offers banking when and where you need it. Whether you are discussing your personal financial information with our knowledgeable branch staff or need cash while traveling, you will find Citibanking comfortable and convenient.
*******

[Jack45]

Sure, Mitsubishi gets humongous guarantee and we go from $100K to $250K insured savings limit. Whoopee. We seem to be taking a huge gamble--correction, huge gambles--all around. Paulson may be smart, but the smell of Goldman Sachs is all over this puppy.

[Pete2069]

Do you every wonder what our representatives are getting out of this....
We Know Bush's father has and is profitting with large amounts of wealth and power with his part in the Carlyle Group..

http://www.guardian.co.uk/business/2003/mar/23/iraq.theobserver
Ex-presidents club' gets fat on conflict
High-flying venture capital firm Carlyle Group cashes in when the tanks roll, writes Jamie Doward

[jon-mullen]

So now China owns your home and your job and Japan owns your bank?

I'm about to start my own little sphere of influence and sell whatever the East will buy. Cheap labor, grain, opium, whatever.

[iambusto]

US companies own a lot of companies overseas too. i dont people whining about that then. its an interconnected world.

people were freaking out similarly when the Japanese were buying up US real estate during the NIKKEI runup in the 80's. where are all those people now?

[David Paul - Huffpost Blogger]

Wow. I owned some Fannie Mae preferred, investments that the Fed was vocally encouraging regional banks to purchase as part of their capital accounts, and that were presumed safe as a Government Sponsored Enterprise. But all of the holders of the preferred were wiped out as part of the Treasury "bailout." Now, Mitsubishi will get a 10% preferred, with a US guarantee, for its investment in Morgan Stanley--a private investment bank. Can I get a piece of that action? Or just reinstatement of the preferred dividend from Fannie. But I guess our investments are just the private holdings of US citizens...

[ImpalaSuperSport]

We really don't need this on our heads.

[bitabingbitabangbitaboom]

The Japanese are very wiery........................they have gotten totally Vucked by the US a few times before.................................come on Palin deny the US did not Nuke Japan...................please

[thebeerdoctor]

The discipline of the market? Where? The free enterprise system? Where?

[darthdarcy]

Had Sec. Paulson only been acting in America's best interests rather than Goldman Sachs, he would have allowed Lehman Bros. to survive as well, and that would have prevented the cascade effect that occurred after Goldman Sachs choose to get rid of one of it's top competitors Lehman Bros. using the Secretary of the Treasury as their hit man..!

[boatswain]

I don't understand why the Treasury doesn't go farther and save Morgan Stanley. Paulson is acting like a CEO, and forgetting his responsibilities as a govt. official. That's the problem, in my opinion.

[leftLibertarian]

Comrade Bush welcomes you to the USSA. His Soviet masters are proud.