Harold Maass of The Week The Best of Today's Business

NEWS AT A GLANCE

Commodities claw back from the bottom

After having their best fiscal first half in 35 years, commodities have had a rough third quarter, dropping 22 percent since June 30, according to the Reuters/Jefferies CRB index. Everything from oil to wheat and copper was hit by the strengthening dollar and weakening economy. But after Treasury Secretary Henry Paulson announced his sweeping plan to buy up illiquid mortgage-backed assets, commodities jumped 18 percent in three days through last Friday, the biggest such jump in 18 years. (Bloomberg) Although the details of the bailout are still being worked out, foreign banks successfully lobbied over the weekend to have their U.S. units' toxic debt included in the bailout, raising the plan's scope and cost. (The New York Times)

Goldman, Morgan Stanley end investment banking era

Goldman Sachs and Morgan Stanley will give up their status as the last two major Wall Street investment banks and become bank holding companies, the Federal Reserve said last night. The change in status, requested by the banks, will bring the two firms under the tighter regulation of the Federal Reserve, instead of just the SEC. (The New York Times) In return, Goldman and Morgan Stanley will be able to take bank deposits, buy commercial banks, and draw on the full range of Fed lending facilities. (AP in Yahoo! Finance) Their new status will reduce risk, but also cut profits. "The decision marks the end of Wall Street as we have known it," said former FDIC chairman William Isaac. "It's too bad." (Bloomberg)

Japan's Nomura buys Lehman Asian assets

Japanese bank Nomura Holdings has agreed to buy Lehman Brothers' Asian operations for $250 million, The Wall Street Journal reported. The deal reportedly includes the bankruptfirm's equities and investment banking units but not any of its balance sheets. (MarketWatch) Nomura is also bidding on some of Lehman's European assets. (Financial Times) Lehman's Asian operations employ about 3,000 people in 10 offices. The bank's Asia-Pacific net revenue was $1.4 billion in the first half this year. Over the weekend, a bankruptcy judge approved Barclays purchase of Lehman's U.S. operations. The firm liquidating Lehman's European assets says the bank suspiciously transferred $8 billion to New York right before Lehman folded. (Reuters)

Houston, we have a program

As the country has been focusing on the Wall Street roller coaster, four Houston TV station have been using the Internet to broadcast their exhaustive coverage of Hurricane Ike's aftermath to interested viewers around the world. The Web streaming fills a gap left by cable TV, which largely abandoned the ongoing problems in Galveston and Houston for the presidential race and market turmoil. And people have tuned in as far away as Australia, Belgium, India, Norway, and Saudi Arabia. "The reach of local broadcasters has never been greater," said Keith Connors, the news director for Houston CBS affiliate KHOU. (The New York Times)

BEST COLUMNS OF THE DAY

Looking back to the future

Back in the "prehistoric 1970s," says Irwin Kellner in MarketWatch, "bankers followed the 3-6-3 rule: they paid 3% for deposits, lent them out at 6%, and were on the golf course by 3 in the afternoon." Banks were "boring, but they were safe." Now, facing a massive taxpayer bailout and an abandonment of the investment banking model, the financial system will once again become less flashy, and more regulated, "regardless of who is elected president." Expect fewer exotic securities and securitized mortgages, and more down-to-earth rewards. In our "brave new world" of finance, "the 'Masters of the Universe' will have to be content with two cars, one home and no private jet."

Don't blame the short sellers

As in all times of "financial convulsions," we're looking for someone to blame, says James S. Chanos in The Wall Street Journal. This time "the guardians of our economy" have landed on short sellers, or "those investors who believe certain stocks are overvalued for fundamental reasons." The SEC banned shorting 799 financial stocks, without soliciting comment and without any supporting data. Well, short selling has long been "misunderstood and maligned," starting in the 1630s, but now more than ever we need these pessimists in the market. Short sellers keep things honest. They foresaw the troubles at Enron, Fannie and Freddie, and this whole credit crisis -- instead of blaming them, regulators should have listened to them.

GOOD DAY FOR: Rolling the credits, as Hollywood has largely managed to avoid last week's freezing up of lending. Production company Media Rights Capital closed on a $350 million line of revolving credit from JPMorgan and Comerica on Friday, and Steven Spielberg secured $700 million through JPMorgan last week to start a production unit with India's Reliance Big Entertainment. (The New York Times)

BAD DAY FOR: Good help, as the collapses in the banking world are starting to be felt in the world of the elite British nanny. Paying up to $73,000 a year for top-notch child care is harder to justify when you've lost your top-dollar banking or money management job. Nanny staffing agencies in London say they're starting to see layoffs and lower salaries. (Reuters)

NOTED: Recently ousted AIG CEO Robert Willumstad has reportedly turned down his $22 million severance package, saying that in his three months at the helm he had not completed a turnaround plan. Meanwhile, AIG shareholders opposed to the U.S. takeover of the insurance giant -- including Hank Greenberg, whose stake of the company he helped build has lost $5 billion this month -- are meeting today to discuss their options. (Bloomberg)

This column was written by Peter Weber and edited by Harold Maass of TheWeek.com.