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Wall Street pillars come crashing down: Lehman Brothers file Bankruptcy, Merrill Lynch sale to Bank of America; AIG heading for bankruptsy

This is a shocking day, we thought someone would have pulled Lehman, Merrill Lynch like Bear Stearns, Freddie, Fannie. But it is shaking time!

We have some tough challenges here. Get ready to stand up on your own! Expect real harsh conditions in 2009!

A stunning makeover of the Wall Street landscape sent stocks falling precipitously Monday, with the Dow Jones industrials sliding 500 points in their worst point drop since the September 2001 terrorist attacks. Investors reacted badly to a shakeup of the financial industry that took out two storied names: Lehman Brothers and Merrill Lynch Co.

Stocks also posted big losses in markets across much of the globe as investors absorbed Lehman's bankruptcy filing and what was essentially a forced sale of Merrill Lynch to Bank of America for $50 billion in stock. While those companies' situations had reached some resolution, the market remained anxious about American International Group Inc., which is seeking emergency funding to shore up its balance sheet. A faltering of the world's largest insurance company likely would have financial implications far beyond that of Lehman, the largest U.S. bankruptcy.

The swift developments that took place Sunday are the biggest yet in the 14-month-old credit crises that stems from now toxic subprime mortgage debt.

Investors are worried that trouble at AIG and the bankruptcy filing by Lehman, felled by $60 billion in bad debt and a dearth of investor confidence, will touch off another series of troubles for banks and financial institutions that may be forced to further write down the value of their own debt assets. Wall Street had been hopeful six months ago that the collapse of Bear Stearns would mark the darkest day of the credit crisis.


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Comments

  1. me too, I didn't expect that Lehman Brothers would be file a bankruptcy. I thought US government would save them.

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