Lehman Brothers will declare bankruptcy. The US Government decided that they did not want to back up Lehman’s $60 billion of bad real estate investments. Bank of America said it will acquire Merrill Lynch in an all stock transaction worth about $50 billion. What does all this mean? The Lehman and Merrill news has pushed the stock market down over 300 points and caused rates to drop. Fixed rate mortgage prices are better by .50 - .75, depending on product and coupon.
History on Lehman Brothers
Henry Lehman, an immigrant from Germany, opened his small shop in the city of Montgomery, Alabama in 1844. Six years later, he was joined by brothers Emanuel and Mayer, and they named the business Lehman Brothers. Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. The Firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world. In a nutshell they provide cash liquidity to our state and local governments, large corporations now will have difficulty getting funded for projects.
Lehman Brothers started in the 1840’s and survived the: *railroad crash of the 1890’s,* the stock market crash of 1929, *World War I of 1917, *World War II of 1939, *the 1980s real estate crash, *the tech bubble of the 1990’s during the Clinton administration, * 911. We can all agree that these events listed and many more crises not listed were significant events in history. This might put in perspective at really how bad is our current credit crunch. For more details go to: http://www.lehman.com/who/
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