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149 comments on Lehman: more socialising the losses of the rich

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Jerome a Paris on September 14, 2008 - 4:45pm Permalink | Subthread | Parent | Comments top

Things are accelerating... this is the front page of the WSJ website right now (4:30pm EST)

Merrill and AIG are also in desperate straits if Lehman goes bankrupt and these are their attempts to push that off.

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nh3 on September 14, 2008 - 4:56pm Permalink | Subthread | Parent | Comments top

Reuters: Merrill Lynch in talks to sell itself to Bank of America for at least $38.25 billion

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Slumlord on September 14, 2008 - 5:10pm Permalink | Subthread | Parent | Comments top

That's about a 50% premium to Friday's closing price. The short covering rally in Merrill will be rather dramatic.

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nh3 on September 14, 2008 - 5:14pm Permalink | Subthread | Parent | Comments top

why would BAC take on such deal at this joint?

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nh3 on September 14, 2008 - 9:29pm Permalink | Subthread | Parent | Comments top

Bank of America to buy Merrill Lynch for $29/share: CNBC, citing WSJ

Bank of America Reaches Deal for Merrill

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DaveMart on September 15, 2008 - 9:35am Permalink | Subthread | Parent | Comments top

It sounds as though they have created an institution which is 'too big to fail'.
Perhaps this is of a size whereby if it gets into trouble an attempt by the US government to guarantee it would bankrupt them?
How would a bail-out if it became necessary compare in size to the F & F bail-out?
EDIT:
Why the heck is BOA paying over the odds for Merril Lynch?
Something smells very, very fishy to me, and my guess would be that taxpayers money and/or guarantees are being funnelled surruptitiously:

Without this buyout announcement Merrill Lynch (MER) would have gotten absolutely crushed Monday. That is absolutely certain. The closing price of Merrill Lynch was $17.05 on Friday. Mother Merrill's market cap was roughly $26 billion.

Thus... Bank of America (BAC) agreed to pay $44 billion for a company that would have been worth $18 billion on Monday's open, assuming a $5 markdown on Monday to $12. Why?

No one had any cash to buy Merrill other than BAC - so what's the rush?

http://seekingalpha.com/article/95414-bank-of-america-merrill-shotgun-ma...

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nh3 on September 14, 2008 - 5:30pm Permalink | Subthread | Parent | Comments top

Lehman Inches Toward Bankruptcy After Potential Buyers Drop Out

``The best case is that the Fed offers a 48-hour standstill by backing Lehman's liquidity directly to win time for other bidders to come forth or the previously interested parties to reconsider,'' said Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania. ``The worst case is bankruptcy, and Lehman goes down the tube.''

bank holiday?

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149 comments on Lehman: more socialising the losses of the rich

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