The Dow is now down by more than 300 points tonight, including loss of fair market value. We can not estimate the impact tomorrow of the weekend events in the financial markets.
Lehman Bros is filing bankruptcy tomorrow. This is a sad end to a company that has been in existence since the Civil War, survived two World Wars and the Great Depression.
The Federal Reserve has forced Merrill Lynch, the largest brokerage, to sell itself to Bank of America, one of the world's largest bank. WAMU and AIG are still in very troubled waters and may also face imminent collapse.
An emergency fund has been created by the Feds to finance losses due to the Lehman Bros. losses. The 10 largest banks in the United States has set up this new emergency fund to try to shore up the banking system, but no one understands right now what this is for. It simply creates a spirit of panic!
Things in the financial markets just went from very bad... to much, much worse! What a weekend!
I was chatting with a friend over the weekend, and we were both expressing considerable concern for the state of the U.S. economy. I asked him his thoughts, somewhat tongue-in-cheek, if we might be facing a national bankruptcy. He said something that I thought was insightful. He said that nations don't declare bankruptcy. Instead, they hyperinflate! I had never thought about this before, but I thought it was an interesting perspective on the state of affairs.
I think I just became a gold bug! Grains iare flat tonight. Crude oil is down. The Dollar is crumbling. But gold is substantially stronger.
I think I just became a gold bug! Grains iare flat tonight. Crude oil is down. The Dollar is crumbling. But gold is substantially stronger.
