Reuters: Wall Street Shaken By Lehman Failure And Merrill Sale

[Hissyspit]

"Complete reorganization?"

http://news.yahoo.com/s/nm/lehman_dc

Wall Street shaken by Lehman failure and Merrill sale
By Dan Wilchins and Jennifer Ablan
15 minutes ago
NEW YORK (Reuters) - The ruptured U.S. financial system faces an unprecedented shakeup with Lehman Brothers filing for bankruptcy, Bank of America buying Merrill Lynch and the Federal Reserve saying for the first time it will accept stocks in exchange for cash loans.

On a black Sunday for Wall Street, 10 of the world's biggest banks also agreed to establish a $70 billion emergency fund, with any one of them able to tap up to a third of that.

Separately, troubled insurer American International Group asked the Fed for a lifeline, according to news reports.

The events, which followed three days of talks between bank CEOs and regulators at the Fed's fortress-like Manhattan building, indicate that Wall Street and Washington were accepting that massive triage is needed in the face of the credit crisis and 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."

Lehman (LEH.N) will become Wall Street's highest profile bankruptcy since junk bond specialist Drexel Burnham Lambert succumbed in 1990.

S&P500 share futures were down 3.4 percent after Lehman announced it filed for Chapter 11 bankruptcy protection, indicating the stock market will open sharply lower on Monday, and the dollar tumbled.

"This just confirms that we are nowhere near the end of the crisis. And it could get really ugly in the next 6 months or so because there's a lot more to be uncovered," said Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore.

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[Hardrada]

1. A happy time has not been seen

Since the days of Merrill, Lynch, Fenner

and Bean.