What if the State Bank of India went bankrupt and disappeared? Impossible you say? Okay, read on …

As I write this, there is history in the making in the financial world. Two very well known & once respected financial institutions, Lehman Brothers and Merrill Lynch have well, to put it bluntly, all but collapsed!

Lehman Brothers, a company started in 1850 (no typo!) by German immigrants to the US has collapsed due to the credit crises in the world and has filed for bankruptcy, in other words, it cannot meet its obligations! A 158-year-old giant of the financial world, gone!

Merrill Lynch has been bought over by a rival, the Bank of America for a fraction of the price it was valued at a few months back. It is 94 years old, (founded in 1914), ranked 30 in the Fortune 500 list and manages (?ed) about $1.6 trillion dollars worth of funds. To give you an idea of size, the whole of India now produces about $1 trillion dollars of wealth per year!

These are institutions that many would have believed would never collapse, it’s like saying our own State Bank of India collapsed and did not exist anymore! Unthinkable no? But well, that’s what is happening right now … history is being made.

And as history occurs, the impact is being felt across the world. The Indian stock markets fell 6% in a day (15 Sep 08) and the hope that the fall of 2008 was over has firmly ended. Now, folks are talking about how far down we would go and where really the bottom of the market is?

Now, that is a really, really difficult question, especially now, to answer? Why, because events are running much faster than we can analyse them and evaluate how the financial system and the world might react to the events and what's more, what other skeletons might there be that are yet to come out.