What do you think the real risks of Merill Lynch and AIG et al collapsing??

[Locut0s]

OK so I know nothing about the market but what do you think the likelyhood is?

The biggest worry is a domino effect set off by the collapse of one of these like perhaps Lehman Bros, causing real panic on the market putting too much extra stress on these already teetering giants. My understanding though is that while these are HUGE right downs for them they are still companies with many other profitable revenue streams. Not that that won't stop their collapse though.

The very thought of a companies with the kind of financial history, respect and size of Mrril Lynch collapsing is very scary. If it were to happen it would harken back to an experience something like 9/11 I would think (no disrespect intended).

[eleny]

1. Bank of America bought Merrill tonight

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

[lapfog_1]

3. And paid almost twice what the market thought it was worth

BEFORE the news of the Lehman collapse.

Odd.

[pnwmom]

12. It doesn't make any sense, does it? What's going on? n/t

[lapfog_1]

14. Something underhanded, I think

Something very nefarious.

Monopolistic power in the banking / stock trading / arbitrage / corporate merger underwriting world.

BofA is where you got to go now. Only ones left (not quite, but pretty close).

[Locut0s]

8. Holly shit. This sounds scarry too though...

"
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.
"

monopolistic banks like this will only mean bad things down the road for all I fear. And if for some reason this new Chimerra should collapse!!!

They must be scarred shitless to make such monumental financial decisions in what amounts to an overnight meeting.

[lapfog_1]

11. Maybe they know something about the upcoming election...

better to institute the shock doctrine now rather than wait 7 weeks.

[Kurt_and_Hunter]

2. Merrill has been bought. AIG is selling bunches of stuff.

I assume we will find a way to keep AIG limping along long enough to sell their airplane leasing company (1,000 planes) and some other assets, so maybe AIG will scrape by. (???)

It is weird to see name companies disappear.

The Washington D. C. fireworks to 'celebrate' the iraq war were sponsored by Worldcom, and they went belly up a few weeks before the fireworks. I was hoping Bush was going to preside over the Worldcom celebration of America, but they caught on late and changed all the signage.

[lapfog_1]

5. AIG is selling it's best performing assets...

to raise cash. Fine. But after a few more months of write downs with the bad assets it has left, it still will be worthless.

This just delays the inevitable.

[Kurt_and_Hunter]

7. They're toast, but evaporating is better than blowing up.

[lapfog_1]

10. I'm not sure...

I think the best thing to have done was to write off all of their bad debt, kept their good assets and asked for bankruptcy protection. Then, after a number of years, emerged from bankruptcy with their good assets intact and try for a comeback. The markets would have been brutal, and the execs would be booted out, but at least it might have kept them going.

Now, it's like they are in a game of monopoly and they had to sell all their hotels and houses and mortgage their property just because they landed on Park Place and then rolled snake eyes.

[customerserviceguy]

13. "It is weird to see name companies disappear."

They're only name companies because they have pissed away billions of dollars buying advertising to entice more suckers into buying their houses-of-cards 'securities'.

One of my co-workers was wondering if Geico was cheaper car insurance. I pointed out that you cannot watch a single half-hour of commercial television without seeing a Geico ad, then I asked her who she thought was paying for that advertising blitz.

There are a hundred ways to piss away money, over-advertising is just the head of the list.

[lapfog_1]

15. Lehman Brothers was founded in the fiftes...

That would be 1850s.

Weathered the civil war, WWI, the stock market crash of '29, the great depression, WWII, and all the rest... only to go now and in this way (calling employees on Sunday to come in TONIGHT and get their stuff).

Sad.

[On the Road]

4. What They're Saying on CNBC

is that the danger to AIG is from a downgrade in credit rating. That would suggest that any chance of bankruptcy is not immediate.

[soleft]

16. NY Times says if that happens, company could be dead in 72 hrs

[sam sarrha]

6. just more Bu$hit Co eliminating competition for the big banks..just like his daddy did

[ChazII]

9. Scary thoughts.