The Broken "WALL"

Background

The WALL is collapsing! Not the Berlin WALL again but the NYSE with its new lows for over a decade collapsed not the WALL STREET alone but the entire global economy. With the Housing and Mortgage tensions heating up the finance houses turning them bankrupt losing investors’ confidence, axing out jobs, churned securities market and the consequences getting worse.

The Ripple Effect

The failure of the Housing and Mortgage sector was never a big problem until Freddie Mac and Fannie Mae; US’ largest housing finance providers filed bankruptcy. Not many days it took for the other US giants to follow “2 F’s”, as an initiative, the jobs were cut and the loss being broadcasted on the news dragged the share prices to the rock bottom and finally, Lehman Brothers filed bankruptcy with $3.9 Billion and later joined, JPMorgan Chase, Merrill Lynch, Morgan Stanley, AIG, Wachovia, GM, Bear Stearns and the list grows.

The government’s rescue aid as Merrill Lynch’s acquisition by Bank of America, Lehman turned bankrupt, AIG being nationalised with 80% government stake, $200 Billion financial aid to Freddie Mac and Fannie Mae together, but the situation getting worse and a $50 Billion aid to automakers is on the America’s card.
The crisis ruined the European and the Asian securities markets making them lose trillions of dollars each day. The global fuel demand has dipped with crude quoting below $89 a barrel and the currency values going up and Rupee nearing 50 a dollar.



Sceptic Conclusion

The question arises; these bankrupts own assets worth trillions of dollars, with diversified products and business around the world, are they so vulnerable with their bottom-line to manage the $3.9 Billion deficit and these organizations are “too big to fail” in business.
As the conclusion, “this is not a global recession, but a movement towards stagnation”, describes economists.