World Economy: Dangerous Phase Ahead

Although US President George Bush and Henry Paulson, the US Treasury Secretary have stated that “Washington was committed to minimising the impact of the painful economic shifts of the present crisis”, the shock resulting from the abrupt demise of the Lehman Brothers investment bank sent the world share market into a nasty downward spin.

A recent report says that “Asian stock markets tumbled Tuesday amid growing fears of a global financial crisis as investors reacted to the demise of two of Wall Street’s biggest names, Lehman Brothers and Merrill Lynch.” More here…

The Times of London reports: “Fears of a global financial meltdown grew yesterday as the world’s biggest bankruptcy plunged markets into turmoil. Another of US capitalism’s biggest institutions, Merrill Lynch, is to be swallowed by Bank of America in a $50 billion takeover to save it from collapse.

“The majority of the bank’s 26,000 staff around the world are expected to lose their jobs. The collapse of Lehman came after the US Treasury refused to bail out the embattled 158-year-old bank, a crucial shift after its support in March for a Wall Street rescue of the failing Bear Stearns.” More here…