Monday morning brought more bad news for investors. Lehman Brothers Holdings Inc. announced it was filing for Chapter 11 bankruptcy protection after efforts to find a rescuer for the 158-year-old company failed. Bank of American Corp. also announced that it would acquire Merrill Lynch & Co. in an all-stock transaction valued at $50 billion.
“This morning we woke up to some very serious and troubling news from Wall Street,” said Sen. Barack Obama in a statement. The situation with Lehman Brothers and other financial institutions is the latest in a wave of crises that are generating enormous uncertainty about the future of our financial markets. This turmoil is a major threat to our economy and its ability to create good-paying jobs and help working Americans pay their bills, save for their future, and make their mortgage payments.
Not to let an opportunity to campaign slip away, he added:
“I certainly don’t fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to. It’s a philosophy we’ve had for the last eight years – one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else. It’s a philosophy that says even common-sense regulations are unnecessary and unwise, and one that says we should just stick our heads in the sand and ignore economic problems until they spiral into crises.
Sen. John McCain, who in a speech earlier today said that the economy was strong, also weighed in on today’s financial turmoil:
“The crisis in our financial markets has taken an enormous toll on our economy and the American people — first the decline of our housing markets followed by the collapse of Bear Stearns, Fannie Mae, Freddie Mac and now Lehman Brothers. I am glad to see that the Federal Reserve and the Treasury Department have said no to using taxpayer money to bailout Lehman Brothers, a position I have spoken about throughout this campaign. We are carefully monitoring the financial markets, including the duress at Lehman Brothers that is the latest reminder of ineffective regulation and management. Efforts must also be focused on ensuring that the deposits of hardworking Americans are protected.