Another day, another devalued dollar

The insolvency status of US giant the Lehman Brothers has resulted in serious shocks on markets both in the US and UK. As the news broke, London followed Wall Street's lead as stocks showed significant losses from the start of the days trading.

It has been a difficult few weeks for the financial sector. Although the US bailout of Freddie Mac and Fanny Mae set a precedent last week and caused the stock market to rally, as traders and financiers anticipated continued Federal support of troubled private financial institutions. Many commentators felt that the implications of such a bailout across the markets would lead to the short-term fix, or at least shoring up, of the current crop of companies heading towards insolvency. This hasn't proved so.

That Lehman Brothers has had to file for insolvency is a further damning example of lax Federal oversight and regulation. Further questions must now be asked of the financial foundations of our current system. What we're feeling are tremors, the portents of recession, but the big one is yet to strike. With businesses giants toppling at an alarming rate, and doing so due to huge debts, it's going to be left to Government to try and repair the system. For all the short-term solutions, and these are ones that are required to soften what's looking to be an inevitable and substantial recession, now should be the time for the planning and implementation of greater checks and balances on our financial systems.