EconomicCrisis.US

(Reuters) – Washington Mutual may file for bankruptcy shortly, said Merrill Lynch analyst Kenneth Bruce terminating coverage of the stock.

The top U.S. savings and loan bank, whose market value has been virtually wiped out because of soaring mortgage losses, was closed by regulators on Thursday, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion.

The company witnessed $16.7 billion in deposit outflows from September 15 to September 24, according to an Office of Thrift Supervision statement.
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Lehman Brothers has filed for the largest corporate bankruptcy in American history.   Let’s put it into persective.   Enron listed $63 billion in assets when it filed for Chapter 11 in 2001.   WorldCom, which until now was the biggest bankruptcy, listed $103 billion in assets.   On its latest filing, Lehman listed $639 billion.   Lehman looks to be the biggest corporate bankruptcy by a factor of six.

The story now turns to American International Group.  AIG (AIG: 3.15, +0.13, +4.30%) is one of the biggest counterparties on Wall Street.   What that means is that they insured and were on the other side of many of the trades done by the big investment banks.    Data from the Bloomberg terminal and published reports indicate AIG may have as much as $1 trillion in assets.   Trillion, with a T.   Many of those assets are believed to be related to complex derivatives instruments linked to mortgages, nasty things known as collateralized debt obligations that have rapidly lost value.  The markets are keenly aware of this, sending AIG shares down 89% this year.   What was once the eighth biggest company in America now has a market cap of just $18 billion, roughly the same size as food company Heinz.     The company posted losses of more than $18 billion in the past three quarters.
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Lehman Brothers’ chapter 11 bankruptcy protection filing is the largest in history, dwarfing all others.

Take a look at the ten biggest corporate filings in US bankruptcy court, based on pre-bankruptcy assets.