A number of leading mutual and pension funds are invested in Lehman, Merrill Lynch and AIG and could suffer as a result, the Toledo Blade reports. How badly the shock to investors retirement savings will be, has yet to be sorted out, however.
This is an extreme sort of event, and it will take days and months to figure out the precise consequences, said Amiyatosh Purnanandam, an assistant finance professor at the University of Michigan.
Some analysts believe the shakeout will be felt for months to come. John Carusone, president of the Bank Analysis Center, an investment banking consultancy, told the Stamford Advocate: Itll be the financial equivalent of Hurricane Ike for the next few months. If you invested in Lehman Brothers, then those portions of your investments will take it on the chin.
Ciaran OHagan, a credit strategist at Societe Generale, had a dire outlook: The losses look to be widespread, hurting the public through their mutual and pension funds. Its clearly a disaster for public confidence.