Not the first line you want to read in the top story in every major newspaper on the first day of the week. There it is, though. Today was one of the most bleak days ever in Wall Street's history, and Monday looks like it's gonna suck. The headlines will surely be easy to find; I'm publishing this post mostly just to create an open thread for the BB community to discuss whatever unfolds, and where it all leads. Snip from today's lead item in the WSJ:
The American financial system was shaken to its core on Sunday. Lehman Brothers Holdings Inc. faced the prospect of liquidation, and Merrill Lynch & Co. agreed to be sold to Bank of America Corp. The U.S. government, which bailed out Fannie Mae and Freddie Mac a week ago and orchestrated the sale of Bear Stearns Cos. to J.P. Morgan Chase & Co. in March, played much tougher with Lehman. It refused to provide a financial backstop to potential buyers. Without such support, Barclays PLC and Bank of America, the two most interested buyers, walked away. Late Sunday night, Lehman said it intends to file for protection under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York.Hang on to your bindles, friends.
Here's more on insurer AIG's related meltdown, and here's the article from which the preceding graf was snipped: Crisis on Wall Street as Lehman Totters, Merrill Is Sold, AIG Seeks to Raise Cash (Wall Street Journal). Greenspan today characterized this as a "once-in-a-century" crisis. Referring to smaller regional institutions most vulnerable to consolidation -- commercial banks, not the troubled investment banks at the center of this news cycle -- one particularly pessimistic investor quoted by CNBC predicts "a thousand banks will close" in the coming months. Krugman in the NYT: "Will the U.S. financial system collapse today, or maybe over the next few days? I don’t think so – but I’m nowhere near certain." I'm also following Floyd Norris' liveblogging on Monday.
BB commenter Seg says:
Image: Ape Lad's prescient Laugh Out Loud Cats, a sweet illustration not actually created with any of this in mind.
For anyone wanting a primer on how the mortgage crises started, I highly recommend listening to the whole hour of This American Life: #355: The Giant Pool of Money. It's the best reporting I have ever heard on anything, let alone the housing crises. While it doesn't go beyond events after April 08, it will bring you mostly up to speed.
Boing Boing editor/partner and tech culture journalist Xeni Jardin hosts and produces Boing Boing's in-flight TV channel on Virgin America airlines (#10 on the dial), and writes about living with breast cancer. Diagnosed in 2011. @xeni on Twitter. email: firstname.lastname@example.org.