Lehman..

Unless you live under a rock, you probably heard that Lehman Brothers, a company that has been around for 158 years, has filed Chapter 11 bankruptcy. And Oh yeah, Merrill Lynch also annouced its sale to Bank Of America.
Why did Lehman file bankruptcy.....just like an individual, it comes down to their balance sheets.
If I'm an individual that has overleveraged myself with a mortgage( prob an interest only) that is worth more than my house, have thousands of credit card debts and other loans, and nothing in savings, would you invest in me? Probably not.
Would you invest in an individual that had no debt except a modest mortgage payment, assets diversified between IRA's, stocks, and 1 years worth of living expenses? Probably.
Same things with companies- Lehman Brothers unfortunately overextended themselves- but don't look at all the bad;there are still companies out there with good balance sheets, yeah their sales may be down, but whose aren't- they can still survive- their stocks are cheap bc they've gone down with current market conditions- could be a great time to buy these companies, IF you are a long term investor and can stand a bit of risk.