Things Just Keep Getting Better…

Before I get to the meat of this entry, I want to start with a quote:

“You know that there’s been tremendous turmoil in our financial markets and Wall St. And it is — people are frightened by these events. Our economy, I think still — the fundamentals of our economy are strong.” – Sen. John McCain, September 15th 2008 (Jacksonville, FL)

Now keep that in mind given what’s happened today in the financial markets:

• Let’s start with the announcement that Lehman Brothers filed for the biggest bankruptcy in history. Lehman’s filing is the biggest corporate bankruptcy in history in terms of assets held. The next biggest bankruptcy in history was Worldcom Inc., with $126 billion in assets, and Enron Corp., with $81 billion.

• What’s more, Lehman Brothers may not be the only major financial institution to file for bankruptcy protection. After the close of the market today, S&P cut its debt rating on mortgage lender Washington Mutual to junk status, presumably a reflection of the credit market meltdown and WaMu’s exposure to the housing market.
• While I’m talking about major companies in trouble, I would be remiss if I didn’t mention the current uncertainty at AIG, the 18th-largest company in the world, where the company needed permission from New York State to access capital from one of its subsidiaries in order to keep the company afloat.
• Oh, and did I mention the Dow Jones industrial average lost 504 points, or 4.4% of its total value, today? Today’s decline of the DJIA was the biggest one-day decline for the Dow since Sept. 17, 2001, when the market reopened for trading after having been closed in the aftermath of 9/11 terrorist attacks.
• And more “good news” came after the market closed today, when Hewlett-Packard announced it will cut 24,600 jobs.

Now I’ll be the first to admit we’re not technically in a recession yet, but anyone with half a brain has to be worried about the current and future state of our nation’s economy. I’m convinced that despite what happened today, the worst is yet to come for our economy.