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US Crisis rebounds: Merryll Lynch and Lehman Brothers enter the fray

Mon, Sep 15 2008, 15:42 GMT
by Tatsuya Kawanishi, Mauricio Carrillo, Noemi Jansana

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Dollar/EuroLast weekend the US damaged economy had to deal with a new severe blow. Merryll Lynch was sold to the Bank of America for $29 a share at a value of $50 billion. Meanwhile, Lehman Brothers faces the bankruptcy after failing in its attempt to find potential buyers.
The Federal Reserve board announced on Sunday several initiatives to provide additional support to financial markets, including enhancements to its existing liquidity facilities.

It is the worst economic slump in postwar history. The credit crunch sent companies scrambling for funds. Lehman's (the fourth-largest U.S. investment bank) debts was noted at $668.6 billion (Morgan Stanley, with $1 trillion, and Merrill Lynch, with $988 billion.) The bail-out package for the Lehman was broken down and it has filed for Chapter 11 bankruptcy-court protection. The USD was depreciated against all the majors. Meanwhile the stock markets plunged across the board. As Investors sought to hedge against Lehman's collapse, U.S bonds prices went up.

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