Wall Street in Financial Crisis

A Plummeting Market

Merrill Lynch gone, Lehman Brothers gone, AIG and Washington Mutual on the brink. This is said to be the biggest financial crisis since the crash in the 1930s.

The United States government was not willing to help Lehman after rescuing mortgage finance giants Freddie Mac, Fannie Mae and investment bank Bear Sterns.

Lehman Brothers was pushed towards bankruptcy early last week. On Sunday 9/14 Bank Of America bought Merrill Lynch for over $50 billion. American International Group, (AIG) one of the planets biggest national insurers was bailed out for $85 billion.

Some people are recalling the stock market crash back in '87.

With the purchase of Merrill Lynch, Bank Of America will transform into the nation's largest institution in wealth management. It already acquires the biggest branch network, it is the largest issuer of credit cards, auto loans and home equity loans. Back in January Bank Of America took over troubled lender Countrywide Financial for $4 billion.

Wall Street was brought to Main Street by Merrill Lynch in the past, but Merrill lost more than $45 billion on poor mortgage investments. With that happening they finally agreed to sell itself for $50.3 billion. Which was a devastatingly hard fall after 94 years of successful business.

Merrill was a kind of solid organization whose order and duration of service throughout the years was taken for granted and was reassuring to most people.

Customers with brokerage accounts at Merrill are unlikely to be financially affected, but who knows now. Merrill was America's largest brokerage firm, and was one of the earliest Wall Street firms to go public in 1971. Merrill chairman and chief executive John A. Thain last December was brought in to try to salvage the suffering institution.

Ever since the credit crisis first started showing early signs of deterioration more than a year ago. Merrill has been among the most hurt and has been trying to right itself ever sine. The company was forced to lay off more than 4,000 employees.