Brokerage goes Boom: a dire week for brokers

Will post more later, but basically the world is going to shit right now, at least the world that I work in. Basically, with Lehman down, and Merrill being bought out, that leaves the big two (Morgan and Goldman) as the only major independent investment banks (and thus prime brokers). Liquidity is crashing (again), and the fed is taking in all kinds of crap to try and shore up the markets. The only good think is that Bazooka Ben actually let Lehman fail instead of trying to bail out the whole US financial industry.

 

But "it aint over":

Even if markets can be stabilized this week, the pain is far from over—and could yet spread. Worldwide credit-related losses by financial institutions now top $500 billion, of which only $350 billion of equity has been replenished. This $150 billion gap, leveraged 14.5 times (the average gearing for the industry), translates to a $2 trillion reduction in liquidity. Hence the severe shortage of credit and predictions of worse to come.