Posts

Showing posts from September, 2008

World Financial Turmoil after AIG?

As expected, we say GoodBye to our beloved Lehman Brothers, instead of "GoodBuy" rated by many before. In fact, this is just the beginning. Although investor want to put a dot to all these bad news, things would not end so easily once the fire had started. After Lehman, AIG could be the next potential victim. Do not stop yet, and it's still counting... Japanese Banks, Goldman Sachs, Merill Lynch, UBS, Barclays, RBS, and so on... As to date, AIG have been fallen by more than 90%. Its market capitalisation hovering about $8billion only. Now, AIG is seeking a 'rescue tube', in orger to rides through this tough financial wave. Potential outcome: Yet, Fed come-in for another financial institution. (Boring, Dear Fed) Sold its valuable assets, e.g. insurance arm (can live few more days) Again, Say GoodBye After all, we could declare - Economy's World War III

Lehman Brothers case

Sad is all we can say about one of the world's largest investment bank. What are the measures to rescue the company? And, it is rescue-able? And, to what extend? As expected, Lehman Brothers is hardest hit resulting from the popular subprime mortgage crisis (for the moment). Its stock price was down about 95% from its 52-week high of $67.73 to $3.65 on 12/09/08. Mainly, due to the grewing concerned by investors. If you were one of them, would you still holding it? Sure, mainly because you can't even sell though, where no one was brave enough to buy it. Then, what can you do? Relax, sit down and get prepared to face the only consequence - losing all the hard earned money. Really cannot turn the table around? 3 solutions: Fed Reserves to bail it out. After the famous Freddie & Fannie bail-out, Lehman is just another troubled financial institution out there. Find other financial firms to swallow it. Who dare to? Last, and the most effective way - natural death.