It's unlike seeing pantyless Britney Spears. On Monday, Sept. 15, Lehman Bros. filed the largest bankruptcy case in history. It's assets before filing for bankruptcy were at least USD639 billion. That's seven times the pre-filing assets of the second-largest bankruptcy since 1980. How many times of Malaysia's GDP is that?
Lehman Bros. collapse was soon followed by the once impregnable, 158 year-old American International Group (AIG). Through its insurance policies AIG touches far more consumers around the world. There goes all my insurance policies with AIA. AIG is in a much scarier situation than Lehman — the insurer has assets of USD1 trillion, more than 70 million customers and intimate back-and-forth dealings with many of the world's biggest and most important financial firms.
The iconic Merrill Lynch, known for with its famous bull logo in the Wall Street, suffering billions in losses in the last year due to fallout in the U.S. mortgage market proved too much for the 94-year old firm. Bank of America rescued it for USD50 billion.
Now the US Treasury is putting together a mother of all bailout plan of USD700 billion for the troubled institutions.
Even some of the smartest, savviest people in the financial world — like the folks running the U.S. Treasury and the Federal Reserve Board — find themselves reacting to rather than getting ahead of them. The top financial market analysts and writers like those of Time and Fortune magazines, with a combined 65 years of writing about business, say they have never seen anything like what's going on.
How did this financial tsunami come about? Should the tsunami hit Malaysia, which institutions would collapse first? How could such institutions that have endured for over a century, admired by many management gurus and students, and featured in books as built to last, finally suffer such devastating blow. Anyway, does anyone need to explain a mind-blowing blow job?
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