Mon Sep 15th, 2008 at 05:44:17 AM EST
After Jerome a Paris's diary Lehman: more socialising the losses of the rich, today's news:
Bloomberg.com: `Tectonic' Shift on Wall Street as Lehman Fails, Merrill Sold
Sept. 15 (Bloomberg) -- In the biggest reshaping of the financial industry since the Great Depression, two of Wall Street's most storied firms, Merrill Lynch & Co. and Lehman Brothers Holdings Inc., headed toward extinction.
New York-based Lehman, founded 158 years ago, said early today that it plans to file for Chapter 11 bankruptcy protection after failing to find a buyer. Merrill Lynch, 94 years old and also based in New York, agreed to sell itself to Bank of America Corp. for $50 billion in an emergency deal hashed out yesterday.
FT.com / Wall Street in turmoil
Wall Street was in turmoil on Monday as Merrill Lynch found shelter in a $50bn takeover by Bank of America and Lehman Brothers said it would file for bankruptcy protection.
BofA’s bold bid for Merrill came as the world’s top banks abandoned efforts to save Lehman and set out to build a firewall against further financial chaos with a $70bn liquidity pool to support other vulnerable institutions.
Wall Street in turmoil. Tectonic shift. See Jerome's diary and the comments (including on Greenspan's offering), and see below for collateral damage re Europe and insurance.
FT.com : Bank shares plummet in Europe
In the UK, HBOS, the country’s biggest-listed mortgage lender, was 17.4 per cent lower at 233p as investors continued to worry about its own capital position. The bank was the biggest faller on the market. Barclays lost 10.1 per cent to 315p, Royal Bank of Scotland fell 8.9 per cent to 213½p.
The picture was the same across the continent. Deutsche Bank lost 4.7 per cent to €55.2 and France’s Crédit Agricole fell 9 per cent to €12.80. UBS was 1.9 per cent lower at SFr21.60. Société Générale was 8 per cent lower at €59.89.
Worries about the health of the insurance sector grew after AIG of the US said it was seeking to raise $10bn-$20bn of new capital. Its Frankfurt-listed shares lost 31.1 per cent to €6.30 ahead of the opening in New York.
Friends Provident was one of the biggest fallers on London’s FTSE 100, on fears about the extent of the spread of the contagion in the sector. Friends was 11.4 per cent lower at 87.6p, while Aviva lost 6.2 per cent to 500.9p. RSA Insurance was 3.6per cent weaker at 152.2p