seeing red
There is carnage across American stock markets as they react to the collapse of Lehman Brothers (4th largest investment bank in the US) and the near collapses of AIG and Washington Mutual. The top 3 investment banks in the US are now gone. Lehman Brothers is the largest collapse in US history, worth $700 billion.Lehman Brothers collapsed after an unsuccessful search for buyers. The US Government had already bought out Freddie Mac, Fannie Mae (both mortgage giants) and Bear Sterns to calm market jitters. They refused to buy out Lehman Brothers and also refused to offer guarantees over the billions of dollars of bad debts to potential buyers. It was bound to sink along with the US economy.
This led to Merril Lynch selling itself to Bank of America in a deal settled in less than 48 hours. If not for the BOA purchase, Merril Lynch would almost certainly find itself in the same position as Lehman Brothers.
Wall Street reacted by plunging 508 points (4.5%), the most since September 11.
The ramifications here are increased interest rates as wholesale money is now more tight. Superannuation earnings will dive along with the stock market. Local councils that bought bonds from Lehman Brothers are now left hanging.
benny | Tuesday, September 16, 2008 
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benny
I HATE ML!!!!!!!!!!!!!!! >:(