Wall Street giant Lehman Brothers has fallen, Merrill Lynch has sunk into the arms of Bank of America and traders smell blood from global insurer AIG. Who’s next?
The New York Times has called this one of the most dramatic days in Wall Street’s history. The whole thing brings ominous tidings, says Fortune magazine. Expect more dramatic articles in the coming days as the media is whipped up into a writing frenzy.
Lehman employs around 3,000 staff in Asia and everyone must be on pins and needles waiting to find out what will happen to them. On the local front, only AIG among the big names mentioned in the news today, has a big consumer base in the Philippines, Philamlife being a member-organization of the insurer. (UPDATE: My local source says Philamlife has its own financial resources and will not be affected much by AIG’s troubles. I am waiting for an official statement from the company.)
But its no wonder gold prices are again on the rise (people tend to flock to gold whenever they are scared). This level of fear has gotten 10 big banks to come together and create a $70-billion fund to protect financial institutions from fallout coming from Lehman’s collapse.
The mechanics for this fund is not yet clear (for example, AIG is asking the Federal Reserve for a $40-billion lifeline to survive. Can it access the fund if the Fed demurs?). As it is, market watchers are concerned that bailing out companies in trouble may give financial markets temporary uppers, but it doesn’t mean the costs will not show up somewhere else. The US taxpayer’s bill, for instance.
All in all, this is a recipe for sleepless nights. Get ready for financial ramifications as this time, Wall Street’s troubles could really end up, in a big way, on our shores.
September 16th, 2008 at 6:58 am
My CEO has been tracking this problem and providing very accurate predictions for several months now. At first we thought he might be exaggerating but pretty much everything he has predicted has come true. http://canadianbullshit.com/crisis.html
We think that real estate will fall in value by up to 70%, 50% if we are lucky. Unfortunatley the worst is yet to come and even Alan Greenspan is warning this is the worst crisis in 100years. That is a subtle way of saying this is worse that the 1929 stock market crash.
Unfortunately the traditional media backed by the rich and powerful finanncial interests have too much to loose to tell us what is actually going on right now. So I think we just need to review the facts. It could very well be that we are headed to a world depression before bottom is reached and the situation enters a new cycle. This is not good. Good Luck everybody and remember that every day above ground is a good thing!
Marcie M. Farsea (Miss) Corporate Secretary, Author (YOUR VERY FIRST BILLION)
September 16th, 2008 at 3:32 am
scary, could this be the start of the “dominoe effect”?
September 16th, 2008 at 12:55 am
This news reminds me that what happens here in US affects the whole world’s economy. Having reside here in US for sometime, I am sometime oblivious that the mortgage crises here also affects other parts of the world.
September 16th, 2008 at 12:15 am
I got really sad after seeing people suddenly unemployed in the news. My first reaction was fear, then suddenly, came the an overwhelming desire to reach my financial goals faster, taking a positive outlook out of the negative.
September 15th, 2008 at 10:46 pm
if you have some money to spare, this is the best time to start accumulating shares of compnies with high potential rebound. for a start check alliance global, megaworld, meralco, benpres, first philipine holdings, ayala land, sm, among others. the ball is round….