The Collapse

Avatar:
Author:
Publish date:
Social count:
0

Bear Stearns.
Fannie Mae & Freddie Mac.

And now?

Lehman Brothers (and Merrill Lynch).

Wall Street was scrambling last night to avoid a dramatic deepening of the financial crisis afflicting world markets. The investment bank Lehman Brothers was edging toward bankruptcy after an apparent failure in talks to save the business, while Bank of America began discussions to buy another troubled Wall Street firm, Merrill Lynch.

Barclays pulled out of a rescue takeover of Lehman after 72 hours of discussions led by US authorities anxious to avoid the firm going bust.

Bank of America had also been in talks to acquire Lehman but has instead turned its attention to Merrill Lynch, which many feared could be the next victim of the credit crunch. A deal would be in the order of $40bn.

A.I.G

The American International Group, the insurance company, is planning a major reorganization and a sale of its aircraft leasing business and other units to stabilize its finances, a person briefed on the company’s strategy said on Sunday.

A.I.G. became one of the focuses at an emergency gathering of Wall Street executives over the weekend, and was trying to arrange a capital infusion in the face of possible credit downgrades.

Who's got next?

UPDATE: Lehman is going to declare bankruptcy.
UPDATE 2: Bank of America is buying Merrill Lynch for $44 billion, 2/3 of its previous value.

In light of some of the dumber comments posted here and I'm sure all over, here is how that noted bastion of liberalism, the Rupert Murdoch owned Wall Street Journal, sees the story.