This situation is at least 5 years overdue, the last 5 years we've been living on borrowed time as the poor "Investment" decisions have spiraled beyond control.
Financially, this is catastrophic, we haven't seen the worst of it yet, this will be the single biggest financial event since the Wall Street Crash at the end of the 20's.
Lehman Brothers are just the start of the big fallers. As all the institutions now hurredly try and search through their positions to find out exactly who they have leant to or borrowed from.
The irony is, many of them simply don't know the answers to this, the debts have been repackaged so many times that it resembles the insurance and reinsurance spirals that nearly lead to the downfall of the Lloyds of London at the end of the 80's early 90's.
Whatever way you look at it, it's bad news everywhere, these investment banks feed the banks that your bank/mortgage lender borrows from......that's how it effects you.
Your mortgage is tied to these investments or the stockmarket or a combination of these things, expect them to underperform for the next 5 years minimum.
I'm in buisness, I'm not thinking about profit or directors dividends, I'm thinking about long term surival, anything not required or surpluss is being discarded. All finances are being tightened.
How does effect me? I run my business on stock finance, this product was simply stopped, not just to me, but to all my competitors also. It's a high risk product (which is why It cost 4% a month) and was one of the first to be withdrawn from the market. Effectively my bank withdraw my ability to buy stock and trade so we had to refinance ourselves.
I'm losing customers hand over fist, fortunately (for me) I'm also losing competitors hand over fist, so I'm picking up what I've lost to fill the gaps.
Small businesses like mine are being hung out on the shelf to dry...Unlike the likes of Nothern Rock or Lehmans I wouldn't just walk away and get to keep my London Pad....Country pad flash cars etc....I'd get asset strpped and thrown out on the street.
The buck stops with you and me, someone somewhere picks up the pieces, that's usually the guy at the end of the line, the last person in the creditors list...the staff, the employees, the ordinary guy in the street.
The overwhelming issue though was highlighted quite well in the news this eveing.
People assumed that someone like Lehman Bros, were so large, their capitalisation so much and their investments so wide reaching that they wouldn't be "allowed" to file for Bankruptcy.......The fact they have means no one is safe, that single fact has more of an effect than any other singlefinancial event recently.
