While John McCain took heat for reasserting that “the fundamentals of the economy are strong,” two of the five biggest American investment banks folded on Monday. Bank of America bought out troubled Merrill Lynch while Lehman Brothers declared bankruptcy.
That left some wondering when the presidential candidates are going to get serious about the economic meltdown.
Update: The market lost more than 500 points on the day’s news, and mega-insurer AIG has started to wobble.
Lehman had incurred losses of billions of dollars in the US mortgage market.
Merrill Lynch, also stung by the credit crunch, has agreed to be taken over by Bank of America, the latest twist in a dramatic turn of events on Wall Street.
Talking to the press, US Treasury Henry Paulson said: “We’re working through a difficult period in our financial markets right now as we work of some of the past excesses”.