World financial markets are in turmoil as the giant US investment bank Lehman Brothers, goes bankrupt. Respected pundit Alan Greenspan declares it the sort of event that only happens once in half a century, or even a century, and the worst financial crisis he has known. Ominously he went on to suggest that it's not finished yet!
World implications of this momentous collapse can be seen from Stock exchanges plummeting all over the world. The drop in London has been around 5%, with 4% in Germany, and around 5% in France. The major British bank Halifax Bank of Scotland lost about a third of its value with its shares trading at around £2.00 as against £10.00 not that long ago.
It was sad, to see some of Lehman's employees leaving carrying their possessions in boxes. Even worse when you realize that they own around 30% of Lehman's equity, which they stand to lose as well as their jobs.
Of course all this trouble is related to the sub-prime mortgage market, which really involved lending people more money than they could afford to repay. Banks climbed on the bandwagon seemingly disregarding that markets can turn, and a global free for all ensued.
There will be many who will not have that much sympathy with bankers perceived as being greedy instead of prudent. As with many issues it is those at the bottom who are likely to suffer more than those at the top. However, the current situation is something like a bushfire, unpredictable and don't know where it's going next. Not quite uncontrollable, but getting there!
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Mortgage Bushfire - Lehman Brothers Crash
Mortgage Bushfire - Lehman Brothers Crash
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