In the year to Sept 10, 2008, in addition to the LHC that could make people afraid whether the world would doomsday with the creation of Blackhole.
For some people the world is "Will" doomsday other reasons.
Lehman Brothers holdings, Inc. One of the world's largest financial services company defaulted Outstanding Debt amounted to 8 billion USD. This is caused by the Sub Prime mortgage crisis that occurred some time ago, Lehman Brothers linking nearly 70% of its investments in the property market and its derivatives.
They have been trying to find new investors and anyone interested in buying such as Barclay and Bank Of America but ultimately the talks failed in the street.
Their shares tumbled nearly 42% in a period of only one month after they published financial statements. The last position merea share was USD 4.42 / share. The highest shares of their position within the last 3 yrs this was USD 10.82 / share.
Governor of the Bank of America as well as 10 bankers bank2x big in the US and dozens of CEOs of financial institutions Top American convene for 3 days consecutive to determine what strategy they should do because of the amount of capitalization that stake here is USD 13 trillion if the crisis continues and "pull" Wall Street headed for destruction.
Lehman Brothers initially requested US government assistance to Bail-Out and ask for liquidity loans indefinitely. But two months ago US Goverment has just agreed to Bail-out for 2 GIANT property finance companies Fannie Mae and Freddie Mac amounted to approximately USD 100 billion.
This can be rescued while 400,000 Home-owners in the US who threatened foreclosure of the bank.
But in the case of Lehman Brothers US government does not want to bail out, and finally on January 11 - Septermber - 2008 (9/11) they propose petition Bankrupt (Filing bankruptcy).
Sept 12th, 2008, the stock market nosedive straight Wallstreet and make all the world stock markets took a nosedive jg. Lehman Brothers had to lay off 26,000 employees in the US and will be followed by the liquidation of all assets in this world are expected to reach a value of USD 450 billion (almost 3 times greater than the total debt LN Indonesia).
Merill Lynch fared about the same as Lehman Brothers finally "surrendered" to the Bank of America offers who wish to acquire it only at the price of USD 50 billion only. (In terms of Value Merill Lynch, the amount of money that has been very cheap.)
Merill Lynch defaulted debt outstanding amounted to USD 220 billion, experienced as like Lehman Brothers that links most of its investment in the property sector which suddenly crumbling.
Results Acquisition of Merrill Lynch and Bank of America creates a new force that could FACE-TO-FACE with the world's largest financial institutions Citicorp.
Total assets to third parties that are managed by the Joint BOA and ML is USD 2.3 Trillion.
Singapore with TEMASEK holding is the largest shareholder after the Bank of America. they controlled 13% stake in Merrill Lynch, total investment that has been disbursed to nearly 10% of Total Reserves Singapore (USD 160 billion). Bank Of America provides an option to buy 10% from 13% shares owned Temasek Merrill Lynch for USD 9.8 billion. Temasek is still considering whether it is better to sell and post a loss of nearly $ 5 billion or always maintain that the potential stock continued to decline.
12th September 2008, is considered as Black Friday by analysts in the stock market and global economy.
This is to make Alan Grenspan, the Global financial guru and former governor of the Bank of America Center of the longest serving should come down from the "hermitage".
He deliberately held a Press Confrence to remind that this is not the End but just the beginning of a domino effect that will soon take place.
Although he is a Republican but he has warnon John McCain, Republican presidential candidates that do tax cuts for employers of USD 3.3 Trillion is not feasible to do except reduce government spending or borrowing abroad.
Reduction of government spending would make the world economy slows and loan LN will make the US increasingly bloated financial deficits. Both feature a by-product that is bad.
Monday on 15th Sept 2008, US financial markets experienced "Meltdown". The Dow Jones fell by 500 points and is the lowest in the seven years since the 9/11.
It meyeret the world's largest insurance company AIG who were forced to write-off of its books related to the case of Sub Prime of USD 117 billion. AIG shares fell nearly 60% in the past one week and USD 20 billion vanished from their books. Now they are busy looking for a loan to finance their operational needs and will suffer the same fate if they can not find banks willing to lend in the near future. AIG has made application for a long-term soft loan of USD 40 billion to the US Federal Bank but not yet approved.
US Treasury Secretary Henry Paulson said he would not help Lehman Brothers based on the consideration that the market should regulate itself. In the trial of President Bush's cabinet jg instructed not to intervene to bail out and instead prefer the issued bonds to absorb liquidity remedy the market due to the many customers who no longer trust them to keep Bank's Money investment.
Today, the EU Central Bank to inject 30 billion euros into the market to withstand market turmoil. Bank of England to inject 5 billion GBP for the same purpose.
Alan Grenspan said that this incident only happened one time every 100 years and always brings tremendous consequences both global socio-political-economic and even dominance.
Analysts equate this incident with the Great Depression that occurred in the US in the early 20th century that led to recession in the world for 4 yrs that culminate in the World War.
For information, Wallstreet indicates USD 700 billion "evaporate" from the stock market as a result of this incident and the trend of large enterprise / large banks that will "fall" will continue. Currently the market as're looking forward to the domino effect of these events and waiting for who the "Big Boss" who will fall next.
26,000 workers in the US Lehman Brothers has lost his job, Merill Lynch jg will soon announce expected cutting the number of employees who will cut about 4000-5000 employees. AIG will lay off nearly 2,000 employees to save costs.
It is estimated that as a result of this, until the end of the year there will be 60000-100000 "Job Losses" that occurs as a direct or indirect impact. This is the highest within the last 10 yrs.
Just as Alan Grenspan said, "This is the One-In-A Century Crisis, the worst i've ever seen in my whole life.
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