This turning out be a real bad week. First, Lehman Brothers tumbled into bankruptcy, followed by Merrill Lynch's shotgun sale to Bank of America and the government's $85 billion bailout of insurer American International Group.
Poor tax payers!!.. A.I.G. is borrowing the Fed’s money on expensive terms, and it must pay it off within two years. Well that's a relief heh?
I don't know when this is going to end. I hope we have reached the bottom. As I write this, Wachovia is looking at Morgan Stanley for merger to come out their mess.
Money market funds have been among the few places that investors could put their cash and sleep peacefully. But with this kind of financial crunch even that is not safe...
What, in today’s world, is truly safe?
Just look at the bail outs
Bear Stearns - $29 billion
Fannie & Freddie - $200 billion
AIG -$85 billion
How long can they keep doing this ? How are they going to keep raising funds for these?