No one is safe in this world. The term ‘too big to fall’ has been proven to be wrong twice in the last weekend. Lehman and ML, who could have imagine these two big players would go under in the same weekend? If you said such things back in 2006, people would think you were too jealous of their huge profit made on the, back then hugly profitable but now extremely dangerous, CDOs. Look at them, one is filing for backrupt protection, and the other is crawlling to BoA for some cash injection. The name of the 3rd and 4th largest investment banks, will soon become just a reference in history books.
This is what you will end up with, for trying to chew more than you can sallow. Highly leveraged products like these are lethal, especially you haven’t got a strong commercial banking division with large deposit as a backup. This is why it will be interesting to see how long Goldman and Morgan can last in the current market downturn. Investment bank’s business model is built on one fundamental assumption, the ability to borrow large amount of cash cheaply. But once your business goes bad, rating downgrade is just a matter of time, and as a result, it will become increasingly difficult to get cheap funding. This is why a comprehensive and robust internal security funding policy must be in place to measure the liquidity of all assets within the bank, to reflect the full cost of funding and to prevent rouge traders from buying rubbish illiquid securities.
And this, is what I do 
