Banks rush to do deals as Wall St crisis deepens by Paulina Neshybova

On Wednesday the panic at Wall Street reached its new plot and the prices fell to the lowest position in the three years records so the major banks had to look for new merger partners.
This situation is the most dramamtic change that has happened since the Great Depression. These changes are moving the foundatiuon of financial system in the world these days.
Only little was done to calm the investors, although there was a $85 billion rescue of insurer American International Group (AIG.N) by the U.S. Federal Reserve on Tuesday.
Many banks are trying to prevent a bancrupt by flooding the financial system with funds.
This has caused big moves in the market and some biggest names dissapeared from financial world.
According to John O'Brien, senior vice president at MKM Partners in Cleveland the insanity and fear is really big now, as everyone is trying to guess who will be next.
Shares of the big companies Morgan Stanley and larger rival Goldman fell this week about 43 % and they are now lining up their danicng partners to preventbeeing the next financial victim. Morgan Stanley was talking about merger with regional banking powerhouse Wachovia. Every investor is now nervous, as it really looks though the investment banking model should dissappear, as so far we can see that really anything can happen here.
For example, Washington Mutual, put itself up for sale.
The politics was not excluded from this struggle. White House was about to support and be concerned with this situations, while the two presidental candidates exploit the situation to persuade their voters about their opinion in this market turmoil.


related story: http://news.yahoo.com/s/nm/20080917/bs_nm/financial_dc;_ylt=AsJINST7xqhApoFQ.YMEwO2s0NUE

by Paulina Neshybova for PocketNews (http://pocketnews.tv)

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edited by Beata Biskova