Opening stocks tumbled in European, Asian markets Monday, Sept. 15, after Lehman Brothers, the fourth biggest American investment bank, filed for bankruptcy. Tel Aviv lost an initial 2-3 percent. US stock markets are set to plunge when they open later promising a financial Ides of September.
Sunday night, Barclays and the Bank of America dropped out of bidding to rescue the 158-year old crippled Lehman Brothers and the federal government said there would be no bailout. Ten US and foreign banks set up a $70bn fund to save troubled companies. The Bank of America opted to spend $50 bn save Merril Lynch from buckling instead of Lehman. American International Group Inc. (AIG), once the world's largest insurer, is struggling to survive. Its failure would have disastrous effects on the global insurance industry.
The collapse of the three biggest names on Wall Street threatens to wipe out many billions of dollars from pension funds and the banking and insurance industries in a worldwide chain reaction.