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  • September 15, 2008 09:58 PM EDT by Liz Claman

    Bear Stearns Yesterday, Lehman Today, and Tomorrow????

     Hi gang,

    I've been up since 4am but can't go to sleep now. American International Group (AIG), the world's largest insurance agency, just got downgraded by Moody's and S&P...this after a brutal day of trading that brought the insurance giant's stock down yet another 60%.  Let's cut to the chase here: WHAT---WHO--- WILL SAVE AIG?

    The mere fact that I'm asking this question just hours after Lehman Brothers (LEH) went under is astounding. We haven't had a minute to really digest what happened to this venerable institution and we're already rushing to the next disaster zone.  Right before the markets closed on the East Coast, the Fed had asked JP Morgan (JPM) and Goldman Sachs (GS) to cobble together a $70 billion dollar pool of money that AIG could tap.  We watched as the market came back a measly 40 or so points and then continued its steady march back down with the Dow eventually wiping the blood from its forehead to the tune of a loss of 504 points, the worst point drop since 9/11.

    Billions and billions of dollars in stock market value across the board disappeared today, but what happens tomorrow when the markets wake up bruised and battered from today's rout, only to face the AIG nightmare head-on?

    Will Treasury Secretary Hank Paulson, who categorically said today there would be no more traditional bailouts of any more financial institutions, have a change of heart or soul?  Can you really let AIG drown as Treasury and the markets did with Lehman?  Or *should* Paulson and Company let it go down? How many more 'saves' can the U.S. government pull off involving companies that got badly burned because they gambled and lost? 

    I don't know. But I do know we WILL survive this. Americans have made it through the crash of '29, Black Monday in 1987, the market fall after 9/11.  We're resilient and optimistic.  Let's live up to our rep.

    --See you tomorrow 

    Liz

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bhparkman

Congress and the treasury made this mess. Let them take the blame while we fix it.

September 16, 2008 at 2:06 pm

MATT

I am not financially intelligent like most of these experts are, but it just leads me to believe that we can't keep giving millions and millions of dollars to executives who knew they were taking risks with the countries financial stability. We as americans have been living well beyond our means for decades, and our GOV't has been just as guilty with their creative spending and tax misrepresentation. The media glut, advertising moguls, and fashion police all have a part in the blame fully knowing what marketing tricks work to get people to buy using their credit. We have failed our next generation by not teaching the values and principles of finances. No wonder the saudi's and chinese, as well as other countries have caught up in the western philosphy of glutteny! Greed breed's greed! Have a good week.

September 16, 2008 at 9:56 am

Michael H

I read an article yesterday claiming the Fed wanted to let some of these companies fail, but had to negotiate a rescue for Bear-Stearns because the Fed felt the financial market wasn't ready for a failure yet. Apparently they thought we were ready for it this weekend when the Fed refused any incentives from the government for buying out Lehman's. I wouldn't be surprised to see either AIG or Washington Mutal collapse this week. WM stock was downgraded to junk yesterday, so I can't see how they can possibly be solvent at this point. Batten down the hatches, now the real fun starts!

September 16, 2008 at 7:54 am

Kirk

Liz, I like your optimism and in the end it will hopefully help these businesses reinvent themselves more efficiently. Unfortunately we can not, as taxpayers, continually bail out firm after firm. The longer we wait to pay the piper, the bigger the price will be. By providing a safety net for companies we encourage risky or even unethical/illegal behavior because they know that they will never be held accountable. For the free market to really work, we have to let firms fail. It is through failure that companies who do not provide their customers with good service will be replaced by those who will.

September 15, 2008 at 11:28 pm

about this blog

  • Liz Claman joined FOX Business Network (FBN) as an anchor in October 2007. Her debut included an exclusive interview with Berkshire Hathaway CEO and legendary investor Warren Buffett.

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