News

    Global Markets Tumble as Major US Bank Fails and Brokerage is Sold

    World equity markets tumbled Monday as Lehman Brothers, a major U.S. investment bank, sought protection from its creditors and Merrill Lynch, America's biggest brokerage, was acquired by Bank of America. VOA's Barry Wood reports that the Dow Industrials lost more than 500 points, or 4.5 percent of their value.

    It was a tumultuous day on Wall Street as Lehman Brothers failed to find a merger partner and sought protection under the U.S. bankruptcy laws. The New York firm employs 25,000 people worldwide. Analysts say its shareholders will likely be wiped out and its bondholders could receive only 60 percent on their investment.

    The end for Lehman came after three days of meetings chaired by the U.S. Treasury and the Federal Reserve, the U.S. central bank, failed to find a merger partner for the firm. In recent months, Lehman Brothers had been hammered by losses triggered by the weak U.S. housing market.

    Treasury Secretary Henry Paulson said the government was unwilling to commit taxpayer money to rescue Lehman as it had with its rival Bear Stearns six months earlier.

    Analyst Peter Wallison of the American Enterprise Institute here in Washington applauds the government's refusal to bail out Lehman.

    "If Bear had been allowed to fail [in March 2008], the psychological effect on the market would have been enormous and there might have been runs on those institutions," said Peter Wallison. "The difference with Lehman today, in my view, is that there is a lot more confidence in those institutions now."

    Meredith Whitney, a securities analyst at Oppenheimer in New York, says the 13-month-long credit crisis is not yet over. She warns that Lehman's collapse could pull huge amounts of money out of the world economy.

    "This is traumatic across the globe," said Meredith Whitney. "Most importantly, it pulls liquidity out of the global economy. So, to date, $3 trillion less liquidity is flowing through the market than it did last year."

    Whitney says the trauma on Wall Street will slow economic activity worldwide.

    The shares of U.S. major financial institutions were down sharply on Monday. The decline on Wall Street was more than four percent, with the Dow Jones Industrials registering their biggest daily decline since the September 11, 2001 terrorist attacks.

    European markets were down about 3.5 percent. Oil prices also tumbled on the expectation of economic slowdown and reduced demand for petroleum. Oil traded at less than $100 a barrel for the first time since March. The price of oil has retreated 30 percent from its July high.

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora