Bank of America Will Buy Merrill Lynch, Lehman Brothers Declares Bankruptcy, What’s Left for Washington Mutual?
by Flexo on September 15, 2008. Filed under Economy.
Going into the weekend, it looked like Bank of America was poised to save the failing Lehman Brothers. In an interesting dramatic twist, Lehman Brothers will file for bankruptcy while Bank of America will buy Merrill Lynch for $50 billion in stock.
After the deal, Bank of America will be managing assets of $2.5 trillion.
The two events may offset each other and limit any potential collapse of the stock market today. Today’s big question, something that will affect today’s market, is whether Washington Mutual will have its own savior. The Dow is already down 340 points.
For some interesting thoughts on the matter, take a look at the comments on this article at BoingBoing.
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About the Author
Flexo, the owner and creator of Consumerism Commentary, has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow him on Twitter.
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{ 6 comments… read them below or add one }
I’ve been playing with the stock market for less than a year. When I heard about the government bailout of Freddie Mac and Fannie Mae, I thought it would mean doom for financial stocks, so I dumped a bank stock that I had profited from and replaced it with a pharma stock. I’d planned to dump all financial stocks as soon as doing so meant any gain. I’m on the verge of doing it again today, but I am puzzled about something and hope you can explain it to me. Why are tobacco stocks considered good? Smoking is so un-pc, and it doesn’t look to me like many people smoke. It looks more to me as though it is on the road to being outlawed. The cost of cigarettes is mostly tax.
Right now, it looks like I am wrong in thinking that the bank stocks will be big losers. Is is possible that the bailout won’t mean doom for financial stocks?
Remember that tobacco companies have overseas markets that are profitable. If you were Big Tobacco, you’d be looking at China and India and drooling!
uhhhmmm, I think you answered your own question right there my freind.
“…The cost of cigarettes is mostly tax….”
isn’t nice to see how Big Brother really cares for YOU!
Thanks, Kaylan, that makes sense.
Where is the US Government getting all the money to do all these bailouts? I thought it was already too indebted…well before the @#$% hit the fan?
Or is it just a gigantic version of using credit cards to pay now and let the future generations be taxed to pay for these excesses?
I would love to see an analysis on this.
Cheers
The US is getting, or I should say, the US will get the bail out money from future taxpayers. You are 100% correct.