This morning, Lehman Brothers (a 158 year old investment firm) filed for bankruptcy, and Merrill Lynch is selling itself to Bank of America. These two investment banks are number 2 and 3 out of the top 5 investment banks on Wall Street. The only two that remain are Goldman Sachs and Morgan Stanley.
It seems like the financial meltdown can’t get much worse.
While this may seem like financial Armageddon, there is a positive ray of light behind these events. First of all, it shows that the financial markets are finally dealing with bigger chunks of the bad debt that’s out there. Restructuring for the future is a necessary move and will lead to a stronger banking system on the other end.
To see an interview about the situation, watch this:
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Great concise writeup here Andrew. It’s 5AM EST and I just read this. I think this is a very scary situation but like everything else we’ve talked about, I doubt people will “change their ways.”