“The Big Takeover” by Matt Taibbi is probably the best article written to date explaining the financial crisis and how we got to where we are now. Taibbi’s necessarily lengthy article explains the problems, names the “poipetrators”, and exposes all of the conflicts of interest— absolutely a must read.

AIG, Goldman Sachs, and J. P. Morgan turn out to be the major players causing perhaps the greatest financial crisis in modern history— even if the pain is unlikely to get near Great Depression proportions, the dollar losses to individual investors have certainly gone as far.

JPM was the brewmeister of the CDO, a vat full of various kinds of income securities, determined to be less risky because the income on most would almost certainly keep flowing— kind of like the once popular junk bond fund that Wall Street insisted was not risky …

By Jason Simpkins Associate Editor After a disappointing string of failed takeovers, CNOOC Ltd. (ADR: CEO) has reignited its foreign expansion initiative with a $2.49 billion buyout of Norway’s Awilco Offshore ASA. China Oilfield Services Ltd., a unit of China’s top offshore oil and gas producer will pay $16.66 (85 kroner) a share, an 18.7% premium to last week’s closing price. Awilco’s board unanimously approved the offer and the deal, which still requires regulatory approval, but should be closed by October. China Oilfield will borrow about $2.3 billion to finance the deal. "I think 85 kroner a share is a good price," Stian Eliassen, an analyst at Carnegie ASA in Oslo, told Bloomberg News. "They’re very interested in Awilco’s jack-up rigs, seven of which will be available to be leased by clients next year."...

Lehman Brothers (LEH:NYSE) is one of the nation’s major investment banks. Lehman was founded in 1850 and has a rich history on Wall Street. However, Lehman’s stock price has been taking a beating this year as they have been painted with the same brush as Bear Stearns. There are rumors floating around Wall Street nearly every day about how Lehman is rapidly running out of liquidity and Lehman’s need to go to the Federal Reserve’s discount borrowing window on a regular basis.

All investment banks, including Lehman, are built on two items - liquidity and trust. When either of these items is lost, investment banks cease to exist and the best that be hoped for is similar to what happened to Bear Stearns-an arranged takeover by a stronger firm. Lehman’s efforts to raise fresh capital have caused the markets to fear that Lehman is going down the same path Bear Stearns

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