The short story: Lehman Brothers Holdings files for bankruptcy and Bank of America takes over flailing Merrill-Lynch ... a week after the federal government said it would rescue Fannie Mae and Freddie Mac.
Neither presidential candidate statement particularly stands out today ... and neither has made federal deficit reduction (and its unmentioned sibling, the federal debt) a cornerstone of his campaign. Where is Ross Perot when we need him? Oh, right, in this election, he's Ron Paul ... and the Republicans didn't want him raining on their parade so they didn't let him speak in Minneapolis.
Here are the details:
- Monday, 15 September: Bank of America, the nation's largest consumer bank, announced it is acquiring Merrill-Lynch, one of the world's leading wealth management, capital markets and advisory companies.
Charles Merrill founded the company in 1914 and it's No. 30 on the Fortune 500 list. Ironically, Merrill accurately advised customers to "sell" in 1928, just prior to the 1929 banking collapse that triggered the Great Depression.
- Monday, 15 September:
Lehman Brothers Holdings, innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide, declares bankruptcy. The brokerage firm was formed in 1850 in Montgomery, AL.
We can credit Lehman Brothers with post-1929 "innovative financing techniques" and helping kickstart corporate consolidation, beginning with major movie theater chains. A reminder that it is "innovative financing" that has led to today's mortgage crisis.
Read more from our Economics Guide, Kimberly Amadeo: Lehman Brothers Bankruptcy Signals New Bottom for Economy
- Sunday, 7 September: In the largest government-corporate bailout in U.S. history, the federal government takes over Fannie Mae and Freddie Mac
- March 2008: We rescue Bear Stearns.
Stay tuned. I think we are in for a long, rough ride.