September 15, 2008

Not big enough to not fail

Not big enough to not fail

After GSEs being declared too much big to fail, this weekend we saw that there are some institutions that are not big enough to not fail.

Lehman goes bankrupt and Merril Lynch goes to BA balance sheet.

The question now is: who is the next one to fail? AIG? UBS? The bankruptcy of a bank has almost ever been succeeded by the domino effect.

We will keep looking for signals

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