At least I am not clearing my desk like those at Lehman Brothers, however it has been a truly terrible day for the US and UK financial sectors.
To lose 2 major investment banks in a day in the US is more than careless. It also shows the futility of the nationalisation of Bear Stearns, so much US taxpayer money down the drain. By implication the same is true of Northern Rock.
I don't know what the US will do about the request for help from AIG, but it seems sensible to ask them to go away and sell themselves. We will find out tomorrow.
In response markets have fallen, the sky is falling in being the cry. Yet oil fell in price today and gold did not shoot up. Commodity falls are a good thing, they lower future inflation and will allow the Bank of England to cut rates over the next few months as inflationary pressures ease.
But the worry for the UK is our banks, HBOS is heavily exposed given its funding model and mortgage profile. Not surprising, its shares fell heavily today. RBS and Barclays are in the mix too and even HSBC.
Coudl it happen here? Yes.
UPDATE: Looking at things overall, will be interesting if a hedge fund goes down because it was stuck with all the stock it was trying to short...must have hurt George Soros quite a bit.