The global market is having serious problem. Watch your investment carefully. There are many bad news in the US market. Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. Lehman was forced into bankruptcy after Barclays Plc and Bank of America Corp. abandoned takeover talks yesterday. Other news which is quite good, Bank of America Corp., the biggest U.S. consumer bank, agreed to acquire Merrill Lynch & Co. for about $50 billion as the credit crisis claimed another of America’s oldest financial companies. This news is good for the market. But this also tells us that current subprime mortgage crisis is far from over.
Stocks tumbled worldwide, the dollar fell and U.S. Treasuries surged after the bankruptcy of Lehman Brothers Holdings Inc. drove investors to the safety of government debt.
Equities dropped in Europe and Asia, led by a 36 percent tumble in HBOS Plc and a 10 percent decline in Macquarie Group Ltd. Futures on the Standard & Poor’s 500 Index fell 4 percent as American International Group Inc. sank 46 percent. Russia’s Micex Index declined 5.3 percent, leading a retreat in emerging markets. Crude oil fell more than $7 to a seven-month low as speculation turmoil on Wall Street and the worsening credit crisis may slow the global economy, cutting energy demand.
This year crisis in one of the worst in history. So protect your money. Be prepare for big rally, because In the past two decades, after a big plunge in the aftermath of Sept. 11, the 1998 Russian debt default and Mexico’s 1994 peso devaluation, the index gained 20 percent or more in the next three months.
Source: bloomberg.com
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Yes – Very troubled times indeed. And still now – many months on, we’re still in a right financial meltdown aren’t we! Another US bank went down last week.
James, Unfortunately we are :) But getting ready for the recovery wave is probably the best thing we can do.
We’re now coasting on government money. If that doesn’t do the trick, then things could get ugly. I mean ‘call in the IMF economic collapse’ ugly.
Stocks is not really doing well and I think this is not the best time to place our money in stock.
Jan, That's really depends how you play in stock investing. If you know your game, stock investing can makes money in good times or bad times ;)
Well i think you are totally right because in this time risk is every where. I hope the conditions will change afters few months and we will fell a healthy environment again.
In my opinion there is only one thing to blame for the crisis and that is the bonus based culture that bank directors live in. Look at it this way… if the bank has to give out x amount of mortgages for the directors to get their huge 6 figure bonus and he is only a few away is he going to give out a few risky mortgages to get this? From evidence, yes he is. Multiply this by thousands of directors across America then billions of dollars worth of defaulted mortgages later (and bonuses paid) the bank isnt liquid anymore. The government is well aware of this yet are still allowing bank that have been bailed out to pay huge bonuses. The financial world has gone mad.
Yes the condition will change but i will take some time.Bankruptcy protection is no longer a shameful experience of which to take advantage. A few of the nation’s most trusted and respected professionals and corporations have taken advantage of this same bankruptcy protection, such as GM, Northwest Airlines, Delta, Lehman Brothers Holding, Inc., Chrysler, and countless more.
it makes me wonder what we are going to do from here on out. will there be a depression like before?
Any feedback from you?