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As I write, financial markets in Wall Street, New York, the City of London and all over are in turmoil.  In just 24 hours, two out of the four largest investment banks in the US have disappeared.  Lehman Brothers, around for 158 years, has declared bankruptcy and 25,000 employees around the globe have lost their jobs. 

Merrill Lynch, the world’s largest investment bank, has been taken over by the largest high street bank in America, the Bank of America.  Bank America was virtually ordered by the US financial authorities to take over Merrill Lynch, paying $50bn.  Otherwise, that bank too would have gone bust, putting thousands more out of work.  Even worse for capitalism, it would have meant that both Lehman and Merrill Lynch would have defaulted on their contracts and obligations and thus brought down many other banks (15 were rumoured to be in trouble).