The business glamour exuded by Wall Street met its demise when one old bank after another collapsed because of bad real estate bets. The debts they owned outnumbered their assets, and that's a recipe for exactly what happened: disaster. Bear Stearns was bailed out back in March, months before the other big banks could no longer fend off failure.
Lehman Brothers went bankrupt after it wasn't granted a government bailout and other banks didn't want to buy the investment bank's risky debts. Then, in a surprising move, Bank of America bought Merrill Lynch as it was thought to be the next bank to go down. When the last standing independent investment banks on Wall Street, Goldman Sachs and Morgan Stanley, were converted to traditional banks, it was the end of an era.
The shape of banking in America is forever changed, and the drama on Wall Street makes it one of the biggest headlines of 2008. We'll be revisiting more of the shocking news from the past year throughout the month of December, so be sure to look for more headlines!