Bloody Monday

Looking at yesterday's trading in US, it was really sad to see that Lehman brothers has filed for bankrupcy and their workforce is close to 28,000 employees.

The news that caught me by surprise was the Bank of America and Merrill deal. Lehman has been on the news for the past few days and it was more or less expected in the worst case scenario that it will go bankrupt and close down due to the various rejections of buyers. However, Merrill, with a much more robust business model in its organization, took a surprise deal for 50 billion to be acqusitied by BOfA. Apparently, the losses that were stocking up in Merrill could be 1 of the reasons the deal had to be done quickly, possibly the lehman incident is another factor that Merrill's CEO, John Thain took into consideration as well.

Out of the 5 financial investment firms, 3 has been considered 'wiped' off. Will Goldman Sachs and Morgan Stanley suffer the same fate as well?

Next news that caught probably everyone by surprise was AIG. This was an insurance organization, which had incurred tremedous losses due to the subprime and it is now trying to raise capital in order to survive. AIG is one of America's largest insurer and probably more than 1/2 of US citizens own their policies. Anyway, on CNN Money, it was indicated that 20 billion will be injected to AIG from the N.Y state governor to save this insurer from suffering the same fate as Lehman brothers. How will this impact AIG in the long run?

I'm sure everyone is disgrunted on how exposed an insurance company was to the subprime. Would you put your life policy on such an organization in the future? There's going to be alot of PR and restructuring of the whole of AIG in order to restore consumer's confidence and put this incident behind.

Last but not least, WaMu a.k.a Washington Mutual, another large savings and loan company in the US, is also suffering the same fate as what Lehman brothers went through the past few weeks. Will they be able to raise capital to prevent the same fate?