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The Path

Life & Events > Shock Wave Hits Wall Street
 

Shock Wave Hits Wall Street


Shock waves hit Wall St. as 2 big firms fall






Published - Sep 15 2008 10:57AM CDT | AP





EXCERPT:
In a stunning reshaping of America's financial landscape, two venerable Wall Street firms fell from the shock waves of a credit crisis that has plunged the financial system into turmoil, as stocks tumbled across the globe Monday in response.
Lehman Brothers, a 158-year-old bank burdened by $60 billion in soured real-estate holdings, filed for federal bankruptcy protection in U.S. Bankruptcy Court after attempts to rescue firm failed. Bank of America Corp. said it is snapping up Merrill Lynch & Co. Inc. in a $50 billion all-stock transaction.
Stock markets fell precipitously and Treasury bond prices soared as investors reacted to some of the most dramatic economic news in modern U.S. history. The Dow Jones industrial average fell 300 points, though the market's initial losses were not as steep as some investors had feared.



The developments took place as U.S. voters, who rank the economy as their top concern, prepare to elect a new president in seven weeks. Presidential candidates John McCain, a Republican, and Democrat Barack Obama, immediately called for stricter financial regulation.
Obama called the news "the most serious financial crisis since the Great Depression" of the 1930s.
President George W. Bush meanwhile signaled that the government would not continued to bail out Wall Street, saying only that "we are working to reduce disruptions and minimize the impact of these financial market developments on the broader economy."
"The policymakers will focus on the health of the financial system as a whole," Bush said during the White House appearance with visiting Ghanian President John Kufuor.
The demise of the independent Wall Street institutions comes six months after the collapse of Bear Stearns and 14 months after the beginning of the credit crisis, sparked by bad mortgage finance and real estate investments.
Ominously, American International Group Inc., the world's largest insurance company, was asking the Federal Reserve for emergency funding and planned to announce a major restructuring Monday
A global consortium of banks, working with government officials in New York, announced a $70 billion pool of funds to lend to troubled financial companies. The aim of the bank consortium, according to participants who spoke to The Associated Press, was to prevent a worldwide panic on stock and other financial exchanges.
FULL STORY
https://www.rr.com/view/content/story.cfm?storyId=5808179&view=HOME&newsgroup=9000&sSect=HOM_1

posted on Sept 15, 2008 10:28 AM ()

Comments:

This is horrible and the new gets worse every single day.
comment by elderjane on Sept 16, 2008 9:10 AM ()
And, I thought that the high gas prices and the terrible state of the economy was the end... Will this nightmare never end???
comment by sunlight on Sept 15, 2008 11:23 PM ()
Laissez-faire capitalism is the republican goal. It never existed and will never work. The closest we ever came to it was in the days of child labor, company-town coal mines, sweatshops without fire exits, unregulated strip-mining and even worse violations on humanity. I want to se "re-regulation," so that manic greed and its dangerous tentacles such as the sub-prime mortgage scheme and the ethanol scam are not repeated. We are seeing the price of unrestrained greed this week as Wall Street bleeds. When the voters realize that Mr. McCain and Ms. Palin are hand-in-hand with the bunch of rats that are behind this debacle, the voters will turn to a new direction and a man of vision for our future - Barry Obama. Tomorrow they should look at what happened today to their 401k and wake up.
comment by jondude on Sept 15, 2008 3:01 PM ()
Isn't this something? It is going to get a lot worse and affect all of us before it's over.
comment by troutbend on Sept 15, 2008 11:18 AM ()
Bush and his supporters, including McCain, have created this mess. McCain has not supported one piece of legislation to regulate the financial or credit or real estate markets. This nightmare on Wall Street is coming home to roost in the ballot box in November. Enough is enough!!
comment by marta on Sept 15, 2008 11:08 AM ()
anyone jumping out.I pulled out of ML many years ago.
Glad that I did.
comment by fredo on Sept 15, 2008 10:48 AM ()
Are the brokers standing in the windows yet?
comment by jondude on Sept 15, 2008 10:42 AM ()

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