US financial woes offer lessons
The worsening US subprime crisis has turned in to the "financial hurricane of the century" that is wreaking havoc on Wall Street.
On Monday, the Lehman Brothers filed for bankruptcy, Merrill Lynch was sold to Bank of America. The US government has agreed to provide a $85 billion emergency loan to rescue the huge insurer American International Group (AIG). The three "bomb blasts" rocked Wall Street to the core, sending shockwaves through the US economy and very likely the presidential election as well.
On Sept 14, Bank of America acquired the 94-year-old brokerage Merrill Lynch, the third largest investment bank in the US. On the same day, AIG, once the top insurance company in the world, applied for $40 billion in federal loans to stay afloat through the worst period of the disaster.
