Lehman may face failure, Merrill may be bought (Sunday "emergency trading session" for insiders)

[UpInArms]

Source: Reuters

(Reuters) - The ruptured U.S. financial system was facing an unprecedented shakeup on Sunday that could lead to the failure of Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz), the takeover of Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research, Stock Buzz) and big asset sales by big insurer American International Group (AIG.N: Quote, Profile, Research, Stock Buzz).

The developments may indicate Wall Street and Washington are accepting that massive triage is necessary in the face of the 13-month old credit crisis and destructive U.S. housing bust.

"The U.S. financial system is finding the tectonic plates underneath its foundation are shifting like they have never shifted before," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey. "It's a new financial world on the verge of a complete reorganization."

The focus on Sunday had initially been on whether talks between regulators and Wall Street's top bankers could lead to the sale of Lehman, which until recently was the fourth-largest U.S. investment bank.

<snip>

That triggered expectations the investment bank is heading into bankruptcy and prompted a rare emergency trading session on Sunday to allow Wall Street dealers in the $455 trillion derivatives market to reduce their exposure to the firm.

Read more: http://www.reuters.com/article/bondsNews/idUSN1444036120080914?sp=true

---

dirty dirty dirty

[UpInArms]

1. "initiated by the Federal Reserve"

An emergency trading session was set between dealers with Lehman Brothers counterparty risk involved credit, equity, rates, foreign exchange and commodity derivatives, the International Swaps and Derivatives Association said.

"This is an extremely, and I stress extremely, rare event. It also speaks to the more general notion that, in today's highly disrupted financial markets, the unthinkable is thinkable," said Mohamed El-Erian, the chief executive of Pimco, the world's biggest bond fund.

Market sources said the special session was initiated by the Federal Reserve.

[truedelphi]

38. Oh Cheer up. Aren't you also seeing where there will be FIFTY BILLION

Dollars made available by banks and other financial institutions to cushion any other blows!!


http://news.yahoo.com/story//ap/20080914/ap_on_bi_ge/lehman_brothers

A full fifty billion smackeroos! Think of how many times you could give your kids an allowance, or how often you could NOT have to worry about your utility bills if you had that available.

And surely there can't be that many MORE banks that might need to have a hand out - could there??

After all, the future is so bright that McCain and his wife have to wear SHADES!

[Joe Bacon]

59. See what happens when a failed porn producer pushes deregulation?

If only Phil Gramm poured more cash into Truck Stop Women, he wouldn't have screwed everyone else!

[johnnyrocket]

63. Any Bush's government touches turns to shit....

...anything.

[w4rma]

2. The Bear Sterns bailout should be retracted in the interest of fairness to their rivals who aren't

getting bailouts.

[ayeshahaqqiqa]

3. How do investment banks fit into the economic scheme of things?

Does Lehman Brothers hold onto bonds or securities for other, smaller banks? Does it invest in insurance companies, or is it a key player in making sure the stock market works properly? How will this bankruptcy hurt my neighborhood bank?

I've never understood economics, so thanks in advance.

[UpInArms]

5. Lehman stocks trade on the NYSE

http://www.marketwatch.com/quotes/leh

and are in the portfolios of many pension funds and banks'

as such, many people own them without trading their stock

on an average day, 78.54 million Lehman shares trade hands - they have approximately 689 million shares outstanding (floating around) and they traded at $67.73 a share in the past 52 weeks - now valued at $3.84 per share.

They pay a 17 cent per share dividend (which is why many people own shares - for the dividends paid)

long short - I really don't know "how it will affect" your neighborhood bank, as I don't know what your neighborhood bank is doing, but it could.

I hope that helps clear us some questions, but if not - remember, I am not a professional investment advisor - just an average person who cares a bunch about all of us

:hi:

[ayeshahaqqiqa]

7. Yes, this helps

But what does Lehman DO that makes their stock so attractive?

When I was in high school, we set up a corporation--but we made products which we sold to the student body. I could see that the value of the stock would depend upon how much product we continued to sell. But I don't think Lehman's makes anything. So why do they sell stock?

[UpInArms]

10. who was it that said: "a sucker is born every minute"?

what they have been doing, is to write "exotic" documents that they "claim" have value and sell them to other banks, so that they can claim huge "gains" and pay their executives genormous compensation packages and give lots of money to lobbyists so that they can pay legislators lots of money to write favorable laws governing their "gains" and then hope that no one ever looks in the box to find Schrodinger's cat.

:)

[elleng]

22. P.T. Barnum!

.

[ayeshahaqqiqa]

23. Ah!

Then my great-grandmother was right! She told me that Wall Street was full of crooks and charlatans. I guess I was wise in following her advice to never invest in stocks. She was one who lost most of her savings in 1929.

[UpInArms]

33. your great-grandmother was very wise,

ayeshahaqqiqa - and you are - just as she was

:hug:

[54anickel]

24. Couple of interesting, somewhat simple explanations of this very complicated

subject....I'd recommend watching at least these 2 in the following order. He has many more out there. Does a much better explanation than I could ever attempt, so hard to put into words alone.

Overcollateralization (O/C) in structured finance
http://video.google.com/videoplay?docid=8278100526242917072&vt=lf&hl=en

Synthetic CDO that fails in subprime securitization
http://www.youtube.com/watch?v=-8vmzvfEuk0


edit to try and fix the 2nd link

[UpInArms]

27. that first one was probably the scariest video

that I have ever watched in my entire life.

Hitchcock had nothing on this guy. I'd rather have birds peck my eyeballs out.

:scared:

if that's what they're calling assets, we are in way more trouble than is imaginable.

[54anickel]

30. Here's one more that will send you screaming......from June of 07

http://video.google.com/videoplay?docid=8278100526242917072&vt=lf&hl=en

[bronxiteforever]

31. 54 I appreciate your work along with all the financial Duers-as a reader

more than a poster in these forms (learning everyday)
Are Up in Arms and Ozy and you telling us to be very scared now? Because I sure am!

[UpInArms]

32. I'm not telling anyone to be afraid -

I am only saying that I am afraid.

My better half says that I have been predicting doom for a while now and tonight said that even a broken watch is right twice a day.

I hope that everyone is safe and well and that we all make it through in some recognizable fashion.

[bronxiteforever]

35. Got it,UIA

[54anickel]

34. Yep, it's gonna get bumpy. From what I gathered they saw this spilling over to Merrill and then to

Morgan Stanley - BoA was possibly going to merge with Merrill to stop the dominos. The investment banks are going down folks. Their only prayer is to merge with a large "real" bank. I know I wouldn't really wany MY bank touchin' that shit!
Futures aren't looking to bright at the moment - still heading down. But there are many hours before open - anything can happen. They've been pulling rabbits outta their asses for as long as I've been on DU and the SMW.

http://money.cnn.com/data/premarket/

[bronxiteforever]

37. Thanks to you guys I am watching CNBC-wow-Thanks again for keeping us informed

:hi:

[UpInArms]

36. "super senior tranche" is funded by a

relationship with the investors??????????


:puke:

[54anickel]

69. Hey, how come it's not the video I thought would post - it's the same one

coming up!!!

Try THIS link....
http://www.youtube.com/watch?v=0YNyn1XGyWg&feature=related

[54anickel]

42. Now, now UIA, remember this is what Greenspin referred to as "wealth creation". He LOVED this shit.

[KoKo]

70. Hey, "54" a shout out to you at Post #68....

:hi:

[whathappened]

54. lol

i watched the vidio and you are so right about having your eyeballs pecked out , a trip to the denist would be less painful then hearing these boreing people , but the truth is the truth , a melt down is there for all

[KoKo]

68. Hey "UIA" and "54".....Good to see Ya, here....

Kind of sounds like what we all were reading and discussing way years back on SMW with Ozy and all is finally hitting the fan big time.

If only they had been reading and discussing what we all were reading and disscussing for years..we coulda' saved them all and our lousy financial system, too!

I never could understand how they didn't see it coming or if they did, why they didn't move sooner to unwind some of this before their house of cards started to fall down on them.

Anyway...thanks guys...you all save me some coins and probably many other DU'ers, too. I still have some bags of that cash (that "54" and I used to laugh about on SMW) under the mattress/ :D I hope you've still got some packed away. That gas money has eaten into some of it...but, I'm still squirreling my pocket change. Never know when it will come in handy.

:hi:

[54anickel]

71. Hey KoKo!!! Yep, got my ziplock baggies along with the buried coffee cans in the back 40. HA!!!

Good to see you friend. We'll have to see what they can manage to pull outta their arses but I saw another thread that has Greenspin capitulating. I'm thinking it's over, done, finito, fork-stickin' time.

Where's that video of Shrub and McSame saying the economy is sound?

[KoKo]

72. lol's.... Forget Greenspin....we have Baracuda Barbie who will come to the rescue!

:rofl: Theater of the Absurd....ain't it?

:hi:

[54anickel]

74. I'd love to hear her thoughts on the economy! Sarah, what are your thoughts on

the derivatives markets? In what regards, 54? ;-)

:rofl: :spray:

[ayeshahaqqiqa]

53. very helpful, thanks!

Now I better understand what is happening, and how my local bank may be effected.

[54anickel]

4. Hey UIA, did you catch this one? I posted it elsewhere here - it was the first

I found to tag Merrill as next.

I get so tired of the media dumbing this down to the "credit crisis" and "housing bust". Sure they played a part, but it's the huge market of derivatives and swaps that are crashing down and they had plenty of folks warning against this for years.

http://www.iht.com/articles/2008/09/14/business/barclays.php

snip>
That Lehman Brothers, a bank founded in 1850 and carrying one of the best names in finance, may fail extends the death spiral of the once mighty Wall Street investment bank. For Diamond the frustration of a deal not done is surely acute, but it may well be tempered by a feeling of vindication that what he has been saying since 1996 has been borne out.

Bear Stearns is no more, Lehman Brothers faces the prospect of liquidation and U.S. government officials and investors now worry that Merrill Lynch - after a 12 percent slide in its shares Friday - could be next.

That Diamond came so close to buying Lehman, adds a fresh twist to what even investment bankers themselves are saying - that the days of swagger and success of the classic Wall Street investment bank are coming to an end. In a new, more regulated financial environment that will continue to see vast sums of money transferred from Wall Street to distant locales like Dubai, Riyadh, Shanghai and Singapore, the traditional strengths of an investment bank - taking risk and raising money - have diminished.

Indeed, the interest in Lehman's asset management business as well as the widely held view that Merrill's wealth management operations and its stake in the money manager BlackRock will keep it afloat underscores today's harshest reality: that with the exception of Goldman Sachs, the investment banking operations for Wall Street carry little of the value and cachet they once had in today's risk-averse and capital-constrained markets.

And, as Diamond would have it, if an investment banking business is to thrive, it is best that it does within the more restrictive confines of a commercial bank - a view that has long been anathema to bankers accustomed to big risks and even bigger pay days. But, with Lehman threatened with liquidation and with the view growing that Merrill and even Morgan Stanley might need to find a larger partner to survive, any brave talk by bankers that they can survive on their own rings increasingly hollow.

"The relevance of the stand-alone investment bank has diminished," Diamond said during an interview in 2004 - a comment that at the time seemed ill-timed as it came just as firms like Bear Stearns, Merrill Lynch, and Lehman Brothers began their final booming ascent, propelled by leverage, risk taking and an aggressive foray into the U.S. market for mortgages. "They lend as if they had balance sheets," he said dismissively last year.

more...

[UpInArms]

9. Lehman's counterparty settlements - a figure that could well exceed $50 billion

:faint:

when "banks" act as casinos, they better be mobbed up good

:hi:

[54anickel]

6. Speaking of AIG - fire sale!!!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3489132

AIG to sell assets including aircraft leasing: report
Source: Reuters

By Lilla Zuill

NEW YORK (Reuters) - American International Group Inc, left with deep financial scars from losses on guarantees it wrote to cover mortgage-linked securities, is expected to sell off assets, including a profitable aircraft leasing arm, the Wall Street Journal report on Sunday.

AIG is under pressure to sell off some of its most valuable assets in a bid to quickly shore up capital.

[Ghost Dog]

8. ... the room fell silent...

... As New York Fed president Tim Geithner addressed those present (Friday night), flanked by Federal Reserve chairman Ben Bernanke, US Treasury Secretary Hank Paulson, and Securities and Exchange Commission chairman Christopher Cox, the room fell silent.

Mr Geithner's message - that Wall Street had to either help save Lehman or face the consequences - was eerily reminiscent of the message that his predecessor William McDonough had given to a similar gathering 10 years previously.

When Mr McDonough asked the assembled bankers to bail out troubled hedge fund Long Term Capital Management in 1998, the banks largely did so - ironically bar Bear Stearns, the investment bank that collapsed in the spring. Although the repercussions of the LTCM collapse were not insignificant, this, said Mr Geithner, could be a whole lot worse.

As he outlined a doomsday scenario that involved the problems at Lehman quickly enveloping other banks - as was the case on Friday afternoon as the likes of Washington Mutual, AIG and Merrill Lynch all saw their shares take a hefty tumble on capital adequacy concerns - it became abundantly clear to all gathered that this was a crisis of confidence and not simply one of liquidity, as was the case with LTCM.

But as well as a lack of confidence in Lehman, the US government was also suffering from a lack of confidence of its own. After the $29bn (£16bn) bail out of Bear Stearns, and the $200bn-plus bail out of Fannie Mae and Freddie Mac, the American taxpayer, already feeling the pain of US mortgage crisis and the nation's continuing economic downturn, had little more to give.

Ahead of the meeting, Mr Paulson had already let it be known that he was adamant Lehman would not be saved with government money - and that, this time, it was up to Wall Street to take some of the rap.

And so a solution had to be reached that would, on the one hand, prevent Lehman from collapsing altogether, with the ramifications for the world's financial system, and, on the other, would draw a line under the perception that the Fed would be on standby to bail out a financial institution every time one came close to the edge.

The solution Geithner put forward on Friday evening was an interesting one - allow a buyer to take on the good assets of Lehman, with the rest of Wall Street stumping up to somehow allow the separation by providing enough funding for Lehman's $41.8bn property portfolio and up to a further $40bn or so of other toxic assets.

Although not ideal, given the fact that the majority of those present had already taken substantial write-downs to their own balance sheets as a result of the sub-prime crisis, this was the only solution that seemed workable in Mr Geithner's eyes.

The meeting ended and those present left for the night to mull over the proposal.

By first light Saturday morning, there were more than 100 bankers and regulators at the New York Fed, discussing whether the plan would work.

It became obvious that even those banks which could afford to help out did not want to do so for the benefit of either main bidder - Bank of America and Barclays, which subsequently walked away - concerned that they would somehow be taking the rap while one of the two would be getting some prized assets on the cheap.

The talks continued, and other suggestions emerged. But as the majority focused on solutions for solving Lehman, others began to talk about solutions for saving themselves.

The credit trading heads of most of the big Wall Street banks gathered in a separate room to discuss the effects of the unwinding of credit default swaps held with Lehman - even contemplating showing each other their respective exposures to the troubled bank.

/more... http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/14/bcnlehman115.xml


And then ...

Lehman Brothers teeters on verge of collapse as Barclays pulls out
Last Updated: 10:36pm BST 14/09/2008

The departure of Barclays left US Treasury Secretary Hank Paulson and Tim Geithner, the head of the Federal Reserve Bank of New York, spearheading desperate last-ditch attempts to put in place some form of a workable rescue package.

Traders fear that the collapse of Lehman would send shockwaves around the world and spark a global sell-off of shares.

Lehman which employs 4,000 staff in London and 24,00 around the world, could be placed into liquidation as soon as Monday. The bank would be the single largest casualty of the current credit crisis and its collapse one of the biggest failures in Wall Street history.

In one of the most traumatic days in the history of Wall Street, Bank of America is reported to be on the verge of buying Merrill Lynch for $38bn.

...

Banks and brokers - led by the International Swaps and Derivatives Association - began preparing the ground for a bankruptcy filing by settling trades that Lehman has outstanding across the credit, stock, currency and fixed-income markets in an extraordinary special trading session.

If the bank does collapse, it will only heighten fears about the prospects for other financial institutions, not least American International Group (AIG), the world's biggest insurer which was last night racing to raise up to $20bn with the help of bankers from JP Morgan Chase amid concerns over its own capital adequacy.

Other banks, including Washington Mutual and Merrill Lynch, have also come under intense scrutiny in recent days as Lehman moved closer to collapse.

...

However Mr Geithner and Mr Paulson - in tandem with the heads of all the major investment banks including Citigroup chief executive Vikram Pandit and JP Morgan Chase chairman Jamie Dimon - were last night frantically working on plans to ensure that if Lehman does have to be liquidated, it can be done so in such a way that it does not severly impact other institutions.

One possibility being discussed was for all institutions to agree to continue to trade with Lehman as the process of the bank being wound-up took place over the next few months.

...

One source suggested that the withdrawal could be merely a negotiating tactic by Barclays to force Mr Paulson into offering a guarantee, but it is thought that such a situation is unlikely given Mr Paulson's insistance that the US taxpayer could not be seen as a continual haven of last resort.

It was Mr Paulson who called on Barclays to put together an offer for Lehman at the end of last week, urging Mr Varley to see if a deal could be done for the sake of the wider markets.

...

However even the prospects for the funding of the "lifeboat" seemed in question, with a number of major banks unwilling to have to allocate capital to such a venture while Barclays or Bank of America simply walked away with the "good bank" at a discount price.

/... http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/14/bcnlehman215.xml

[Xipe Totec]

11. Derivatives market trades on Sunday to cut Lehman risk

Source: Reuters

NEW YORK (Reuters) - A rare emergency trading session opened Sunday afternoon to allow Wall Street dealers in the $455 trillion derivatives market reduce their exposure to a potential bankruptcy filing by Lehman Brothers.

U.S. regulators and bankers were making last-ditch efforts on Sunday to prevent toxic assets from ailing Lehman Brothers (LEH.N) spilling into global markets and rupturing investor faith in the international financial system.

"This is an extremely, and I stress extremely, rare event. It also speaks to the more general notion that, in today's highly disrupted financial markets, the unthinkable is thinkable," said Mohamed El-Erian, the chief executive of Pimco, the world's biggest bond fund, based in Newport Beach, California.

The session opened at 2 p.m. and was due to run until 4 p.m. New York time (1800 to 2000 GMT), according to the International Swaps and Derivatives Association. See text . ISDA later extended it for another two hours.



Read more: http://news.yahoo.com/s/nm/20080914/bs_nm/lehman_specialsession_dc_3

---

Rich people getting an exclusive chance to dump bad debts.

[bemildred]

12. "the $455 trillion derivatives market"

If that is not a Ponzi scheme, what is? This is better than selling bottled water.

[mbperrin]

16. At least with bottled water

you actually get a bottle with water in it.

Not like these guys!

[54anickel]

44. Makes Lehman's $50 billion counterparty settlements sound like chump change. n/t

[screembloodymurder]

13. Market expected to crash on Monday.

This is it!

[lapfog_1]

14. For it to be a trade, there would have to be buyers and sellers.

Even if leveraged to an inch of it's life and hedged seven different ways from Sunday (how appropriate) there still have to be buyers (or rubes as I would call them). Unless our government is in there buying - which I doubt - somebody has to buy this piece of crap... and they extended the trading time by 100% (meaning lots of sellers and no buyers).

This one is going to make a mess on the trading floors around the world.

Somebody roll up a newspaper and prepare to whack Bush over the nose (and McCain too because he is so stupid he doesn't even realize that it's a mess).

[fedsron2us]

48. Rupturing faith in the international financial system ?

That horse is already three counties away.

This is about saving Wall Street elites not about protecting 'global markets'.

The end game will come when foreign lenders decide they have finally had enough of losing money in US financial institutions.

[C_U_L8R]

15. emergency trading session ???

did Randolph and Mortimer get them to turn the machines back on???

[jannyk]

17. Who the fuck are they dumping this crap on?

If they are 'lowering' their risk to this shit - somebody must be gobbling it up - who and why?!

[Ghost Dog]

26. I think it means Lehman gets to take back all the crap

that was tied up in contracts with the other 'insider' banks, in the final minutes before it goes bust.

[ozymandius]

28. Bloody Hell! Read these terms.

Lehman’s broker-deal subsidiaries would not be a part of the bankruptcy filing. Those entities must file under Chapter 7 rules, which are the procedures for liquidation, under the assumption that it is the best way to protect customers. The Securities Investor Protection Corporation would handle the liquidation of such brokerages, and bankruptcy lawyers say that customers are likely to receive their holdings back.

Moreover, changes to the bankruptcy code mean that counterparties to Lehman’s credit-default swaps can seize their collateral at any time, posing an enormous potential risk to the entire financial markets. Investment banks, hedge funds and other financial players labored throughout Sunday to offset their exposure to Lehman, moving their contracts to other firms.

http://www.creditwritedowns.com/2008/09/lehman-expected-to-file-for-bankruptcy.html

That onerous bankruptcy law bites the banks that wrote that filth.

[CountAllVotes]

40. damn good catch!

:wow: ... it was all part of the plan it seems. They have gotten caught in their own trap!

Bookmarking ...

:dem: :kick:

[On the Road]

46. Per the CNBC Special,

they also removed leverage limits on the investment banks in 2004. Plus it sounds like Lehman was hiding the extent of its leverage. Another example of overreaching to disastrous effect.

Although as far as the seizure of collateral, I would be willing to bet that Treasury would step in and block any action likely to destabilize the markets.

[Ghost Dog]

18. Pimco's Gross sees tsunami of risk if Lehman fails

Sun Sep 14, 2008 6:12pm EDT

NEW YORK, Sept 14 (Reuters) - Pimco's Bill Gross said on Sunday that a Lehman Brother's (LEH.N: Quote, Profile, Research, Stock Buzz) bankruptcy risks an "immediate tsunami" because of the unwinding of derivative and credit swap-related positions worldwide.

...

"It appears that Lehman will file for bankruptcy and the risk of an immediate tsunami is related to the unwind of derivative and swap-related positions worldwide in the dealer, hedge fund, and buyside universe," Gross, the chief investment officer of Pacific Investment Management Co (Pimco), told Reuters. Pimco oversees more than $812 billion in assets.

Indeed, a rare emergency trading session opened Sunday afternoon to allow Wall Street dealers in the $455 trillion derivatives market to reduce their exposure to a potential bankruptcy filing by Lehman.

U.S. regulators and bankers were making last-ditch efforts on Sunday to prevent toxic assets from ailing Lehman spilling into global markets and rupturing investor faith in the international financial system.

"The extraordinary trading session held today to facilitate a partial unwind of these positions saw very little trading -- perhaps $1 billion total -- but at much wider spread levels for corporate bonds," Gross said.

...

Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) was in advanced talks to acquire Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research, Stock Buzz) for at least $38.25 billion in stock, the New York Times said on Sunday, citing people briefed on the negotiations.

...

A transaction valuing Merrill at $25 to $30 per share could be announced as soon as Sunday night, the newspaper said. Merrill shares closed at $17.05 on Friday.

...

"To some extent, the rumored bid for Merrill by Bank of America lends some confidence to all markets, although I am skeptical that BofA would pay such a premium on such short notice," Gross added.

/... http://www.reuters.com/article/marketsNews/idINN1465548820080914?rpc=44&sp=true

[redirish28]

19. My wife has a bad feeling. She wants me to go out tomorrow and get

money out of the bank and pick up supplies, she worried that something is going to go down.

[elleng]

20. Great timing!

FULL MOON tonight!

[boomerbust]

21. My investment advice

Purchase a name brand matress and boxspring and place all remaining assets between said matress and boxspring.

[wordpix]

43. that's not sage advice when your dollar is worth less tomorrow than it is today

Remember the price of everything 30-40 yrs. ago was peanuts compared to today. That huge $20K bundle that would have bought you a house and land in most places back then will buy you a kitchen today, if it's not too large.

[NoodleyAppendage]

67. Sound as long as it is GOLD, not dollars under that mattress. n/t

J

[KoKo]

73. A dollar in that mattress is worth more than one in a failing bank, though...Bird in Hand Syndrome..

Old expression: "A bird in the hand (under mattress) is worth more than bird in the bush." (no pun intended) :D

[GeoK]

25. I'm not an economics expert, so

I'm wondering on a scale between 1 to 10 what the severity of this is? What would the affect be to low middle-income families? :scared:

[LiberalHeart]

29. WSJ: Bank of America HAS purchased Merrill. n/t

[customerserviceguy]

41. They deserve each other

the most crooked bank in America and the most crooked stock pimp in America.

A marriage made in hell.

[UpInArms]

49. CBS Bulletin: Bank of America to buy Merrill Lynch for $44 billion

no story yet...

http://www.marketwatch.com/default.aspx?siteid=bnbh

[54anickel]

56. WSJ story up now - unfriggenbelievable, they are playing up the confidence angle

http://online.wsj.com/article/SB122142278543033525.html?mod=mktw

snip>

The deal, which was being worked out in 48 hours of frenetic negotiating, could instantly reshape the U.S. banking landscape, making the nation's prime behemoth even bigger. The boards of the two companies approved the deal Sunday evening, according to people familiar with the matter.

Driven by Chief Executive Kenneth Lewis, Bank of America has already made dozens of acquisitions large and small, including the purchase of ailing mortgage lender Countrywide Financial Corp. earlier this year. In adding Merrill Lynch, it would control the nation's largest force of stock brokers as well as a well-regarded investment bank.

A combination would create a bank of vast reach, involved in nearly every nook and cranny of the financial system, from credit cards and auto loans to bond and stock underwriting, merger advice and wealth management.

It would also show how the credit crisis has created opportunities for financially sound buyers. At $44 billion, or roughly $29 a share, Merrill would be sold at about two-thirds of its value of one year ago, and half its all-time peak value of early 2007. Merrill shares changed hands at $17.05 each on Friday, after falling sharply in the wake of Lehman's looming demise.

"Why would Bank of America do this?" said analyst Nancy Bush at NAB Research LLC in Annandale, N.J. "Ken Lewis always likes to buy the biggest thing he can. So why not this? You are master of the universe, basically."

more....

[UpInArms]

62. You are master of the universe, basically.

oopsie!

their ship is driven by darth vader

[54anickel]

65. Sick somesabitches, ain't they? So f'ing full of themselves.

[daleo]

39. It smacks of crony capitalism

A special meeting for insiders, etc.

Regular people will pay for this, via bailouts, stock losses (smaller investors) and pension fund losses. Big shots will give each other golden parachutes and claps on the back for saving the day.

And the decline of the American empire will continue.

[wordpix]

45. it IS crony capitalism. A friend who works at Fannie Mae told me that all the new head honchos

who replaced the old just last week are repugs.

I'm sure that mortgage giant will be back on its feet in no time with BushCo cronies running the ship. :sarcasm:

[fedsron2us]

50. Other peoples money

Problem is that the other people are now often foreign investors who may simply take their ball and play the game elsewhere.

When empires go down their elites usually get wiped out in the end..

[daleo]

52. One is reminded of the French Revolution. n/t

[sarcasmo]

61. Which is fine, I want no part of this Evil Empire.

[dysfunctional press]

47. the european markets seem to lke what they see, i guess...

http://finance.yahoo.com/intlindices?e=europe

[NeoConsSuck]

51. That was Friday

[dysfunctional press]

66. oops- my bad...it was earlier than i thought...it'll be interesting to see what happens...

when they DO open.

[unkachuck]

55. well, well, well....

"The U.S. financial system is finding the tectonic plates underneath its foundation are shifting like they have never shifted before,"

....global economic collapse brought to you by Wall Street and the crooked Republican Party....

....obviously, these capitalists can't run an economy, they can't control their own greed and they subvert or ignore just about every regulatory law they find....

....so, how's your job doing?....shakey?....don't have one?....who are you going to blame?....of course, the crooked Republican Party....

....how are your retirement investments fairing?....are you losing big?....are you losing sleep?....can you retire?....it's all part of the grand melt-down plan of the crooked Republican Party....

....are you making ends meet?....is food too high?....is gas outrageous?....huge medical bills?....are your bills rising while your income declines?....now who's at fault here?....of course, the crooked Republican Party....

....do you need some relief?....do you need some help?....you do realize bush/mcsame/palin hate government of the people, they'll never make it work for you....

....now if you were rich, they'd bail you out financially with our taxpayer money so you wouldn't lose a dime....but you're not rich; I guess a cardboard box under a viaduct will have to do....there won't much opportunity in a cardboard box under a viaduct other than to blame the crooked Republican Party for doing this to you....

....they lie, they cheat, they steal....the crooked Republican Party

[roamer65]

57. Good.

I have no sympathy for banks.

[johnnyrocket]

64. But I have symathy for my money that's in them.

rattling around in there somewhere....

...I hope.

[greyghost]

58. The fat lady is about to let loose, global recession/depression

begins tomorrow.

[nbsmom]

75. Not helpful

If you go around screaming 'FIRE' in a crowded theatre you are going to make something already crappy even worse.

Here's what I might suggest: do whatever it is that _you_ need to do to make sure you get some sleep. Sell a risky position or two. Put money in your mattress. Take a yoga class. Whatever.

But quit screaming loudly at the top of your lungs -- it is only going to heighten the sense of anxiety and panic among the good people of this board.

Sorry, but I've seen just one too many of these types of posts and I just wondered: what productive result will you engender with your crowing about the End of The World As We Know It? How is what you're doing any different from the stuff they're shoveling on CNBC?

Hmmmmm....

:eyes:

Thought so.

[greyghost]

76. Quite frankly I'm glad it's coming now as opposed to after Dubya

leaves office. But it is coming, either way, and has been for months. Bush Co has done all it could to forestall the inevitable, but they are now out of options. They can't bail out the whole financial system, they simply can't print that much WORTHLESS paper.

At least now the blame will rest squarely where it belongs. It couldn't happen to a nicer group.

[sarcasmo]

60. Brace for a Monday free fall.

[greyghost]

77. You betcha. eom

[sarcasmo]

78. 500 points was a pretty good free fall.

[greyghost]

79. Indeed