I am back on the road again as the famous Willie Nelson song goes. Broadband has been restored and laptop has been fixed, which means I will be ramping up slowly and get back to my regular schedule.

What a month this has been. To say that September has been an eventful month would be an understatement. The financial carnage and bloodbath reminded me of the dotcom bust that took place here in Silicon Valley a few years ago.

Was it only a few days ago that we were all caught up with up with the surprise announcement of Sarah Palin as McCain’s choice for VEEP? It seemed like every TV channel was constantly analyzing the lipstick comment and obsessed over every gesture, move and word that Sarah Palin spoke. But all that changed suddenly with the economic crisis that imploded on us last weekend that has been dubbed as the Financial Crisis of 2008 and also sounded the death knell of the investment banking houses in the USA.

On September 15, 2008 Investment Banker Lehman Brothers filed for bankruptcy under Chapter 11. This was not any bankruptcy. This was the largest bankruptcy in the history of the United States of America. Lehman’s bankruptcy came on the heels of the dramatic decision by the US government to rescue Fannie Mae and Freddie Mac. Then there is the rescue of AIG, the largest insurance company in the USA.

John Gapper of Financial Times summed by our feelings every elegantly when he wrote there was a lot of “excitement at all the action, bafflement, fear, and finally, with the AIG bailout, anger.” I put together a bunch of interesting links that helped me make sense and understand the financial crisis, Paulson Plan, shadow banking, Fannie Mae, Freddie Mac, regulation, deregulation etc.
Henry Paulson: Biography, Paulson’s Secret Life.

Ben Shalom Bernanke is Chairman of the Board of Governors of the US Federal Reserve: Biography, Essays on The Great Depression, Money, Gold and the Great Depression

Lehman Brothers is a financial services company that is over 150 years old.

The Federal National Mortgage Association (Fannie Mae) was established in 1938 under the Presidency of Franklin Delano Roosevelt (FDR). According to

The Federal Home Loan Mortgage Corporation (Freddie Mac) was also established in 1938 under FDR’s Presidency. According to Wikipedia both Fannie Mae and Freddie Mac were taken over by the US Government on September 7, 2008. Hank Paulson has proposed a $700 billion plan to bail out both these mortgage organizations.

American Insurance Corporation (AIG): The US Government rescued AIG by providing $85 billion revolving credit facility.

Motley Fool has a nice primer on what is investment banking.

Analysis and Editorial:

Wall Street bad dreams a special 9-page reports in Economist.

Fuld Again in Economist looks at the Lehman Brothers crisis.

Size Matters in Economist looks at AIG’s bailout and the implications of US Government’s intervention.

Cash for Trash in The New York Times where Paul Krugman looks at Paulson’s Plan.

A Professor and a Banker Bury Old Dogma on Market by Peter Baker in The New York Times. He looks at Professor Ben Bernanke and Banker Hank Paulson’s role in the recent financial crisis.

The Lehman Lesson in Washington Post

This greed was beyond irresponsible in Financial Times.

Michael Greenberger explains the financial crisis to Terry Gross on Fresh Air.

Lawmakers Battle Over Battle Plan in The Wall Street Journal.

Too Clever By Half in Forbes.

True cost of the rescue in BBC.

And Nouriel Roubini of NYU, who has written extensively about the impending crisis in the US economy and financial markets for a while now. You need to register to read his posts.

So, is the country in one of the biggest and toughest economic situation since the Depression of 1929? To use an old adage only time will tell what last week’s meltdown means to all of us in the long run and what it will mean to the rest of the world. Will this crisis seep across the Atlantic and the Pacific and color the economies in Europe and Asia? I don’t know but it seems like that is a high likelihood given the fact that we live in an inter-connected world.

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