Sep 15, 2008

 

There were two disasters in the past few days that produced images that both shocked and saddened. In both, a cataclysmic event swept down on people, washing away their homes, destroying their property, changing their lives forever. One was an act of God. The other was of our own creation. 

Contrariwise, this morning we awake to find that an equally terrible storm has swept away 25,000 jobs at Lehman Brothers (LEH) and will certainly threaten the lives and homes of 60,000 others at Merrill Lynch (MER). Our feelings are somewhat more mixed here, although certainly not for the people.


 
 
"The Bank of Japan will carefully monitor recent situations surrounding the U.S. financial institutions and their influences, and will continue to strive to ensure smooth settlement of funds and maintain stability in financial markets through measures such as appropriate money market operations," Gov. Masaaki Shirakawa said as the institution pumped 2.5 trillion yen into money markets through two separate injections.
 
In China, the mainland central bank cut a key interest rate Monday for the first time in more than six years. Hong Kong’s monetary chief emphasized plans in place to flush more cash into the banking system if necessary during a "severe crisis" in global markets.
 
Reeling from $60 billion in toxic real-estate debt, Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy in New York on Monday. The storied, 158-year-old Wall Street firm _ once America’s fourth-largest investment bank _ was unable to secure an investment partner despite a flurry of last-minute negotiations over the weekend.
 
Investors were also shaken by news Monday that Merrill Lynch sold itself to Bank of America Corp. for about $50 billion.

"We are facing one of the most difficult times in international financial markets," Australia Treasurer Wayne Swan told Parliament on Tuesday. "We don’t face the same problems being experienced in the United States," he added. "But nevertheless, events on international markets are having an impact on confidence around the world."
http://money.cnn.com/news/newsfeeds/articles/apwire/bc7c0e44f5546d16580ab9052818772e.htm

 
It is hard to imagine a bleaker picture. As another longtime Detroit executive said last week: "Six months ago, car buyers were upside down on their car loans. Today, they are upside down on their lives." 
http://money.cnn.com/2008/09/14/news/companies/detroit_downturn.fortune/index.htm
 
The company already said last month that it is seeing "continued conservatism" in IT spending in the U.S., and this has extended into Western Europe and parts of Asia.
http://money.cnn.com/2008/09/16/technology/Dell_weakdemand.ap/index.htm
 
 
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One Response to Sep 15, 2008

  1. Kit says:

    they come, they go. that’s all we should know.

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