What a day? Earlier, Lehman brothers officially filed for Chapter 11 protection. This initiated a selling spree that ended with the Dow down by 504 points.
Although Lehman bros is in the news, I am not really interested with them. My primary concern is how this will affect other financial institutions. There are already indications that the fear is spreading with the announcement that Merrill Lynch had just closed a deal with Bank of America to preempt the situation.
Now, the attention is with AIG, the biggest insurance company in the world. AIG is pursuing the same strategy of boosting its capital by tens of billions of dollars to forestall the same fate. AIG is asking the Federal Reserve for the money but it looks like the Federal Reserve will not offer a Bear Stearns type of rescue plan. Now, investors are doubtful of the fate of the company that they are selling in droves.
AIG, being a global company have investments in the many part of the world, including the Philippines. AIG's possible fate may have a great impact to its subsidiaries which includes Philamlife - one of the biggest players in the insurance industry.
Philam offers a range of products to a wide base clientele. Among its products is a college plan that I had availed for my son. As of this month, the plan that we bought is one payment short from being fully paid.
I am very concerned as the amount of money involved is significant. What makes it more important is this is an investment to my son's future. Hopefully, we don't have another CAP fiasco in our midst.
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