Fort Worth, TX (WiredPRNews.com)—Lehman Brothers files for bankruptcy, Bank of America buys Merrill Lynch, AIG to be restructured and Washington Mutual plans a large write down. A financial hurricane hit Wall Street as the lingering effects of the credit crisis pushed independent investment giant Lehman Brothers into bankruptcy while Bank of America bought troubled Merrill Lynch for $50 billion.
According to a September 15, 2008 Associated Press article by Joe Bel Bruno, Christopher S. Rugaber and Martin Crutsinger, which appeared on Yahoo.com, Lehman Brothers’ $60 billion in bad real estate loans prompted the bankruptcy filing.
The buyout of Merrill Lynch by Bank of America, according to the Yahoo.com article, is a good fit because there is little overlap between to two groups. Merrill Lynch’s stock price closed at $29 on Friday after a high of just over $98 in the first part of 2007, according to the Yahoo.com article.
Insurance giant AIG went into restructuring to help prevent a further drop in business, according to a September 15, 2008 Associated Press article by Ivea Augstums and Stephen Bernard, which appeared on the Chicago Tribune.com website. In the previous week, AIG’s stock dropped 45%, according to the article, and the firm is seeking $40 billion in immediate funds to prevent a credit downgrade.
Seattle-based Washington Mutual announced Friday that it had to write off $2.7 billion in bad loans for the second quarter, according to an article written by Jonathan Stempel of Reuters, which appeared at Yahoo.com’s news page. Investor confidence in the bank sank as Moody’s reduced Washington Mutual’s credit rating to “junk,” according to the article.