Insurer American International Group Inc struggled for survival a day after a financial tsunami swept away investment bank Lehman Brothers and forced the sale of rival Merrill Lynch in the biggest financial industry shake-up since the Great Depression.
AIG (NYSE:AIG - News) scrambled for a financial lifeline on Monday after investment bank Lehman Brothers Holdings Inc (NYSE:LEH - News) failed to find a rescuer, and Merrill Lynch & Co Inc (NYSE:MER - News) agreed to be taken over by Bank of America Corp (NYSE:BAC - News).
Shares of Wachovia Corp. dropped dramatically Monday as the investment community’s concerns over the exposure of big banks to bad mortgage loans intensified.
Wachovia, the fourth-largest bank in the country, saw its stock price fall by $3.12, or 21.9 percent, to $11.15 in afternoon trading. Wachovia’s stock price has already dropped by more than 70 percent from a year ago.
Standard & Poor's on Monday cut its ratings on Washington Mutual Inc (NYSE:WM - News) into junk territory, citing exposures the bank has to bad mortgage debt and volatile markets.
"The company's weak equity pricing in the markets is also a concern, and it increasingly appears that market conditions could overtake credit fundamentals and leave the company with greatly diminished financial flexibility," S&P said in a statement.
Oh yeah -- keep your eyes on every other financial company out there.