I am glad I reminded you all last week how to breathe, because the news this morning is sure to have a few of us at risk of hyperventilation.
After all the tumultuous news last week, Lehman Brothers Bank finally filed for bankruptcy. LBB's demise is not unexpected: we knew since last week that there would be no government bailout (thankfully). But it's still something of a slap in the face to an economy on its knees.
You and I aren't going to feel the effects of the collapse directly, as there are no consumer loans or bank accounts involved with the bank. We are, however, going to feel it indirectly. One major concern is that a lot of retirement funds have bought into various Lehman Brother securities, and with a share price drop of 95%, hanging onto those shares isn't getting any of us closer to lazy afternoons on the golf course.
On the positive side of things, Merrill Lynch, also in big trouble, has been rescued by Bank of America. As the BBC puts it, there was some fear that with the trouble first for Bear Stearns, and now Lehman Brothers, investors would be going on something of a "witch hunt" for the next troubled bank. Bank of America's actions are a nice little bandaid to put on the hurting banking system.
What we're seeing here, dear readers, is Murphy's Law in action. When you think it's bad, don't worry, it can always get worse! I'll be honest, sometimes I feel grateful that I'm in "sleepy" Southern California and not heading to Wall Street every day. I don't think my nerves could take the constant stress of bad news.
On the other hand, SoCal is full of good news, and I have the power to change my mindset from stress to bliss in light of it.The sun is shining, but not too hot. There's a hint of fall in the air. Gas is cheap (ish). It's almost lunchtime. What else can a person ask for?
Cyara Pott - Market Specialist
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