The dust is starting to settle on what has been very ugly day on Wall Street. It’s not over by any stretch of the imagination… It’s going to take several days if not weeks for the markets and Main Street to fully digest the implications of Merrill Lynch’s shotgun marriage to Bank of America, Lehman Brothers bankruptcy filing and AIG’s troubles.
I don’t have any particularly interesting insights in to the situation all I can say is this:
As traumatic as today’s events have been for the employees, investors and clients of Lehman Brothers, Merrill Lynch and AIG they had to be allowed to happen… If our financial system is going to have any kind of integrity financial institutions have to be allowed fail. The government can’t keep stepping in and bailing these institutions out.
The Wall Street Journal has complete coverage here (requires subscription).
If you have a life-insurance, auto or homeowners policy through AIG, you might want to look at this MarketWatch piece:
It’s unclear at this point how AIG will ultimately fare, but the good news for consumers is that each state has a guaranty association in place to protect policyholders in the event of an insurer’s failure.
For its part, AIG says its insurance subsidiaries, all of which are wholly-owned, are “well capitalized and they meet or exceed local regulatory capital requirements,” said Joe Norton, an AIG spokesman. “These companies continue to operate in the normal course of business to meet our obligations to policyholders.” See full story.
But even if AIG — or any other insurer — faced insolvency, state guaranty associations exist to protect consumers.
for a little reassurance.
Ed Morrissey takes a look at the politics here.