Stocks fell sharply at the opening bell Monday after a trifecta of Wall Street pain: Lehman Brothers filed for bankruptcy, Merrill Lynch was bought by Bank of America and AIG asked the Fed for short-term financing.What's important is not that Wall Street is down over
What's really important is to put a picture together:
- With Lehman going bankrupt* and Merrill wed via the shotgun last weekend, three of the five largest investment banks in America as of 6 months ago no longer exist.
- Freddie and Fannie, the nation's largest mortgage holders, were nationalized last week.
- AIG, the biggest insurer in America, is begging the Fed for cash, just as the biggest automakers in America are doing across the street at the Capitol.
- IndyMac bank, the largest bank failure in 2 decades and the second largest ever, wiped out 1/6 of the FDIC's insurance pool. There are 117 more banks** on the FDIC's trouble list.
- WaMu, the nation's largest S&L, looks to be the subject of this weekend's emergency Fed/Treasury meetings.
* With over $600 billion in debts, Lehman Brothers is the largest bankruptcy in US history. Do not expect them to hold that record very long.
** though in all fairness, most of them are tiny compared to IndyMac. Though in unfairness, Indymac didn't even make that list until a few weeks before it imploded, so whether that number is meaningful is debatable.