September 15, 2008

Will the financial system crash tomorrow? Will the stock market? We’re about to find out.

Lehman Brothers went bankrupt today (Sunday). AIG will go under mid-week. Merrill Lynch has just sold itself to Bank of America to stave off failure. Washington Mutual, the country’s largest savings and loan, is teetering on the edge of disaster.

Not to be a debbie downer, but shit, shittily, shit, shit.

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4 Responses to “ 1929? ”

  1. RustedJesus on September 15, 2008 at 1:43 am


  2. Fortuna Köln on September 15, 2008 at 8:44 am

    I think the stock market will drop a couple hundred points but I don’t think it’s quite as bad as 1929. It seems more like a final round of blood-letting by the Fed and a (temporary) end to overt public bailouts. BoA has been eying Merrill for awhile and rumour has it that the sale is only going through because the Fed forced Merrill to sell itself (trying to get rid of all the deadweight on one day?). Let’s wait and see how Lehman’s assets and trading positions are liquidated before we jump to any conclusions.

  3. RustedJesus on September 15, 2008 at 10:46 am

    Fortuna, I don’t know what you just said, but I think it makes me feel better.

  4. MrOink on September 15, 2008 at 11:35 am

    Yea, it’s true that BoA has been trying to buy Merrill all year, but it’s also true that Merrill was in dire straights and perhaps headed toward bankruptcy if BoA didn’t buy it. While the deal is good for Merrill Lynch, a lot of folks seem to think that BoA made an impulsive purchase. How can BoA handle the acquisition of both Countrywide and Merrill in one year? Not to mention the fact that BoA has a lot of MBNA-related credit card bad debt.

    It appears you were right, though This wasn’t (so far) 1929 and it wasn’t 1987. But before we speak too quickly, we’ll have to see how this all shakes out by the end of the week.

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