The kings who used to decide the financial destiny
of an economy as well as of whole world are now either
reduced to miniscule creatures or they are completely vanished.
The robust kings got badly defeated from the onslaught of `the
financial monster', i.e., the global economic turmoil. No one could
have afford to imagine that tycoons of financial markets, whether it is
investment banks or commercial banks or leading securities
firms and likewise, will crumble down.
Fannie Mae and Freddie Mac, Merill Lynch, Lehman
Brothers, AIG and likewise many big bulls have been severely injured by
global economic turbulence. The financial contagion which
originated in the US spread like a wild fire to other economies of
the globe. The immediate impacts apart from financial instability
all around the globe was huge job cuts and this, in turn,
rendered numerous working population unemployed.
An unpleasant and unexpected event happened in the
Wall Street's history when Merill Lynch on one fine Sunday
morning took a bitter decision to sell itself to Bank of America
(BoA) for a price somewhat around
$50 bn to escape from the evil of deepening financial crisis
while another prominent securities firm, Lehman brothers, filed
for bankruptcy protection and hurtled toward liquidation after
it failed to find a buyer. But even as the fates of Lehman and
Merill hung in the balance, another crisis loomed as the insurance
giant American International Group (AIG) appeared to teeter.
Suffering from heavy financial downturns due to credit crises,
AIG asked for rescue from the Federal Reserve for an amount of $40
bn in absence of which the company's hope of existence would have
become extremely remote. It was like a mammoth financial surprise
of the 21st century as Peter G Peterson, Co-Founder of the
private equity firm the Blackstone Group said that in his 35 years
of professional experience, he has rarely seen such
extraordinary events. |
