In a remarkable weekend on Wall Street, Lehman Brothers has declared bankruptcy and Marrill Lynch has been sold to Bank of America. In other stories, New York Sate will permit troubled insurer AIG to transfer funds from its operating subsidiaries to the holding company and ten firms have set up a $70 billion financing facility. So what does this all mean? In our view, in the short-term, it means the following:

• Wall Street is now down to six major firms (Citigroup, JP Morgan, Goldman Sachs, Morgan Stanley, Credit Suisse and Bank Of America)
• Merrill Lynch was clearly the firm at risk following the Lehamn meltdown. With them being sold, there is no obvious "weak sister" now
• The unwillingness of the Federal Government to intervene to assist Lehman suggests that now the survivors are on their own
• Likely 50,000 people will lose their jobs in and around New York as Lehman closes and Merrill gets stripped of everything but their brokerage network
• The sale of Lehman's troubled assets will cause other firms to re-mark their positions lower setting off a new wave of losses
• The $70 billion financing facility is public relations in our view

In the longer-term

• The scavengers picking off currently troubled assets will likely be big winners
• The financial sector will be strengthened

• There will be fewer providers of capital in the mortgage world

What is the impact on Maui real estate?

• Lehman is a significant force behind Honua'ula (Wailea 670) and it may well slow that project further
• This will be another factor that shakes the confidence of buyers

We will be following events going forward.