US Companies Financial Meltdown - Capitalism at its best?

[Game Theory]

jamani watu wa NY tupeni updates..mazingira yaoje ?

 

[Bishanga]

Yote tisa,kumi wataalam wa uchumi tuelezeni sisi ohe yakhe ku collapse kwa haya ma golden sachs ya dunia hii kutatuathiri vipi ili tufunge vibwebwe,maana sisi wengine haya ni mawenge tu,hatuelewei,too complicated.tunaomba mtueleze kwa lugha rahisi.

 

[Pundit]

GT,

Speaking of Tom Wolfe I just finished "Hooking Up". The guy's critical analysis is much needed in today's America.

On the financial end, anybody with more than the FDIC insured amount of mulla in banks should seriously consider either withdrawing of diversifying the risk.

I'm just watching The Street, the suits are crazy today, all over. Even the canned CEO assurance acts are not doing anything since people can hardly tell a PR stunt to save face and rally confidence from a fact based sound assurance.

This Wall is surely gonna tumble some more. I hear it could very well be only hours before AIG follow suit, unless Warren Buffet agrees to pull some magic which does not look likely given the staggering figures which even the Oracle of Omaha may not be able to cough up. To the average Joe this means more unemployment, domino effects, perhaps even global repercussions in this age of interconnected markets.Just when the dollar was beginning to pick up speed everything is bouncing right back.

It's a byach that all this is happenning just as the oil price was beginning to self regulate, then you have the hurricanes in the Gulf of Mexico and stuff.

On Greenspan, I think sometimes he is given too much credit for just presideng over a more prosperous and less perilous period than today. If you look at the trends that caused the current meltdown you will see that he is actually responsible for a lot of the slackness that caused such grave complacency and "The Bonfire..." culture. Most of the issues are not short term issues, they are long term issues and started in the reign of Greenspan.

 

[vassil]

it is sad situation,who could have thought this would happen in america, but this has been in the making for years now,it is interesting to hear from republicans now suggesting that sub prime lending practices started in the clinton era,lets see if AIG and WAMU survive this week

 

[Icadon]

Stocks tumble on Lehman, Merrill, AIG
Wall Street is socked by the biggest financial market crisis in years as Lehman bankruptcy and Merrill buyout rattle investors. AIG tumbles too.
By Aaron Smith and Alexandra Twin, CNNMoney.com staff writers
Last Updated: September 15, 2008: 1:23 PM EDT

NEW YORK (CNNMoney.com) -- Stocks were crushed Monday, as investors sought to make sense of the largest financial crisis in years after Lehman Brothers filed for the biggest bankruptcy in history and Bank of America said it would buy Merrill Lynch in a $50 billion deal.

Treasury prices rallied as investors sought the comparative safety of government debt, sending the corresponding yields higher. Oil prices tumbled, falling well below $100 a barrel on slowing global economic growth. The dollar rallied versus other major currencies and gold prices spiked.

The Dow Jones industrial average (INDU) lost 230 points, or 2%, with roughly 3 hours left in the session. The Standard & Poor's 500 (SPX) index lost 1.9% and the Nasdaq composite (COMP) lost 1.2%.

Global markets tumbled Monday as investors reeled after Lehman Brothers filed for bankruptcy, Merrill Lynch was forced to sell itself to Bank of America and investors awaited AIG's restructuring announcement.

On Monday afternoon, NY Gov. David Paterson said AIG will be allowed to use $20 billion in assets through its subsidiaries to stay afloat, basically providing itself with a bridge loan. AIG had reportedly asked the Fed for a $40 billion bridge loan earlier. Shares of AIG (AIG, Fortune 500) were down 45%, little changed from before the announcement.

The events of weekend cemented for investors that the credit crisis is far from over, six months after the near-collapse and government rescue of Bear Stearns.

"The landscape has changed and a lot of the major players who were are no more, so of course people are panicked," said Stephen Leeb, president at Leeb Capital Management.

"But it's not the end of capitalism," he said. "This may usher in something worse than what we've seen in terms of the economy, but the companies left standing at the end of this will be OK."

Stocks had slipped even more in the morning, although the day's losses were not as steep as some had feared, perhaps because news of a sale or restructuring at Lehman Brothers was expected over the weekend.

Losses were also tempered by the Federal Reserve's decisions to loosen up its lending restrictions. The central bank could end up cutting the fed funds rate, its key overnight bank lending rate, when it meets Tuesday, analysts said. The fed funds rate currently stands at 2.0%.

Also helping Tuesday: news that a group of 10 banks including Morgan Stanley, Goldman Sachs and Barclays had given up to $7 billion each to create a $70 billion lending pool to help smaller institutions.

Art Hogan, chief market strategist for Jefferies & Co., said the magnitude of the financial industry fallout is unprecedented, and could only be compared to the Great Depression of the 1930s or the railroad bankruptcies of the 1800s.

"We've never witnessed this before," said Hogan. "There's no road map for this."

He said that over the course of the week, investors will be closely watching AIG, Washington Mutual and other banks to see who will be the next to get "embraced by a white knight."

Market breadth was negative, with losers beating winners by almost 7 to 1 on volume of 750 million shares. On the Nasdaq, decliners topped advancers by over three to one on volume of 1.44 billion shares.

Lehman bankruptcy: Lehman Brothers (LEH, Fortune 500) announced it was filing for bankruptcy, after weekend talks aimed at saving the 158-year old firm failed.

The filing came shortly after midnight Monday, after Bank of America and Barclays pulled out of negotiations to acquire Lehman, which has lost $60 billion in bad real estate bets and the credit market's collapse.

Unlike with Bear Stearns back in March, the government was reportedly not willing to help finance a takeover, bailout or restructuring of Lehman Brothers. This reportedly contributed to the reluctance of other firms to strike a deal with the troubled company.

Lehman shares plunged 94%. (Full story)

Merrill Lynch buyout: After pulling out of the Lehman negotiations, Bank of America (BAC, Fortune 500) announced that it will buy Merrill Lynch (MER, Fortune 500) for $50 billion in stock. The price values the company at more than $29 a share, a more than 70% premium from Merrill's closing price on Friday of $17.05.

The company has posted losses of more than $17 billion over the last four quarters and saw its stock plunge 27% last week.

Shares gained 17% Monday afternoon, while Bank of America tumbled 16%. A variety of other financial shares plunged, including Washington Mutual (WM, Fortune 500), Citigroup (C, Fortune 500), Morgan Stanley (MS, Fortune 500) and Goldman Sachs (GS, Fortune 500).

AIG: Insurer AIG (AIG, Fortune 500) plunged 55% as Wall Street awaited the details of its restructuring plan, expected to be announced Monday.

The company has lost more than $18 billion in the wake of the subprime mortgage crisis and is in desperate need of cash to maintain its credit ratings and investor faith.

Should the company fail to raise cash and see its credit rating cut by the ratings agencies, it may have only two to three days to survive, according to a source close to the firm. (Full story).

On Monday afternoon, NY Gov. Paterson said the state will lend AIG $20 billion and also urged the Federal Reserve to pony up as well. AIG had reportedly asked for $40 billion in a Federal Reserve bridge loan.

AIG stock fell 50%.

10-bank emergency fund: In a bid to calm the markets, the Federal Reserve announced plans Sunday to loosen its lending restrictions to the banking industry. A consortium of 10 leading domestic and foreign banks, including Goldman Sachs (GS, Fortune 500), Citigroup (C, Fortune 500), Barclays (BCS) and Morgan Stanley (MS, Fortune 500), agreed to create a $70 billion fund to lend to troubled financial firms.

The Federal Reserve, meeting Tuesday, could cut the fed funds rate, a key short-term interest rate, from the current level of 2%, analysts said.

Oil: Oil prices plunged as early signs pointed to little damage to oil rigs and refineries in the Texas Gulf region from Hurricane Ike.

Oil prices were down $4.41 a barrel to $96.87. Oil dipped below $100 a barrel on Friday for the first time in five months.

Other markets: In global trade, European and Asian stocks ended lower. Many major Asian markets, including Tokyo and Hong Kong, were closed for holidays.

Treasury prices soared as investors poured money into the relatively safe-haven. The rally sent the benchmark 10-year note tumbling to 3.52% from 3.72% late Friday.

In currency trading, the dollar rallied versus the yen and euro.

COMEX gold for December delivery gained $19.20 to $783.70 an ounce. To top of page

 

[Icadon]

 

[DAR si LAMU]

Yote tisa,kumi wataalam wa uchumi tuelezeni sisi ohe yakhe ku collapse kwa haya ma golden sachs ya dunia hii kutatuathiri vipi ili tufunge vibwebwe,maana sisi wengine haya ni mawenge tu,hatuelewei,too complicated.tunaomba mtueleze kwa lugha rahisi.

..so long as unakula muhogo wa kisarawe, madafu ya bagamoyo, mlenda wa tabora na samaki nchanga wa ntwara, hautakuwa na matatizo.

..baba zako wenye kumiliki mabiashara makubwa na kufanya kazi kwenye makampuni ya kimataifa ndio matumbo yatapungua ukubwa.

..kalaga baho, usiwe na wasi.

 

[MiratKad]

Ben Bernake should now get ready to take a leaf or two from Mugabe's book on how to print money ;-)

 

[DAR si LAMU]

Kipindi iki ndio kizuri sana cha kununua gold na silver.....who knows....hali hii itaendelea mpaka lini?

..kama una fedha za ziada!

 

[DAR si LAMU]

Ben Bernake should now get ready to take a leaf or two from Mugabe's book on how to print money ;-)

..and so guarantee the free fall of the dollar!

 

[Game Theory]

GT,

Speaking of Tom Wolfe I just finished "Hooking Up". The guy's critical analysis is much needed in today's America.

On the financial end, anybody with more than the FDIC insured amount of mulla in banks should seriously consider either withdrawing of diversifying the risk.

PUNDIT, where in the world have you been? on the subject i think FDIC should open their own line of pizza parlors. It would save on costs and help with secrecy.

But seriously,does the FDIC have the auditing chops to correctly value and model modern financially engineered products?

For example, what exactly is the risk for a large bank holding synthetic CDOs (composed of credit default swap agreements).

I would imagine that the FDIC staff is trained and most capable of recognizing problems in 'traditional' loan portfolios. Then again thats America for you ...they elected Bush baby as their prezidaaa

I'm just watching The Street, the suits are crazy today, all over. Even the canned CEO assurance acts are not doing anything since people can hardly tell a PR stunt to save face and rally confidence from a fact based sound assurance.

This Wall is surely gonna tumble some more. I hear it could very well be only hours before AIG follow suit, unless Warren Buffet agrees to pull some magic which does not look likely given the staggering figures which even the Oracle of Omaha may not be able to cough up. To the average Joe this means more unemployment, domino effects, perhaps even global repercussions in this age of interconnected markets.Just when the dollar was beginning to pick up speed everything is bouncing right back.

It's a byach that all this is happenning just as the oil price was beginning to self regulate, then you have the hurricanes in the Gulf of Mexico and stuff.

I am pretty amazed about all of this. I do believe that MER needed someone to take them over, as going to the world for more capital over and over again wasn't going to work.


The day of reconning is coming closer for the others, as I believe now that BAC has MER and LEH has gone the way of the dinosaur that Goldman Sachs and Morgan Stanley are going to have to start admitting what they have on their books. I have seen figures for level 3 assets at all of these firms, which are assets marked to fiction or fantasy and not to reality.

I don't believe these entities were set up to act as pass throughs like mutual funds, insurance companies are actual banks and keeping evergreen assets on their books goes against all the accounting principals as far as i know...japo si mtaalam wa accounting.

Robert Prechter, a guy people like to pick on because he was early in predicing this stuff, pretty much described the day we are looking at here.

My best analysis might be flawed, but where does BAC come up with $50 billion to buy MER and what do they have left once the negative net worth of MER and CFC come to the top of the water? I find it highly doubtful that BAC had $100 billion in real worth at the peak of the market, so the acquirer themselves might be soon in the boat of LEH and AIG.

I am also skeptical of 10 insolvents writing $7 billion checks for a fund to bail out themselves. Lets see if any of them actually write the check and if so, is it going to be honored?

so far....

WM: -15%
ETFC: -9%
WB: -11%
C: -7%

Add one additional half for each failed bank?

On Greenspan, I think sometimes he is given too much credit for just presideng over a more prosperous and less perilous period than today. If you look at the trends that caused the current meltdown you will see that he is actually responsible for a lot of the slackness that caused such grave complacency and "The Bonfire..." culture. Most of the issues are not short term issues, they are long term issues and started in the reign of Greenspan.

The media was more interested all along in admiring AG's mastery of obfuscation than in looking into what he was obfuscating.

here is a video of Greenspan defending the lack of action in the bubble years

[media]http://www.youtube.com/watch?v=m...h?[/media] v=m6b4qX_qm40

What can you say? it is just strange to hear it even with 20/20 hindsight.

 

[Game Theory]

First lady & Gamba la nyoka

patiently waiting for your inputs on the subject

 

[Pundit]

..so long as unakula muhogo wa kisarawe, madafu ya bagamoyo, mlenda wa tabora na samaki nchanga wa ntwara, hautakuwa na matatizo.
..baba zako wenye kumiliki mabiashara makubwa na kufanya kazi kwenye makampuni ya kimataifa ndio matumbo yatapungua ukubwa.

..kalaga baho, usiwe na wasi.

Hizi bidhaa zinahitaji kusafirishwa (think price of oil), mazao haya yatahitaji pembejeo kwa aina moja ama nyingine, kama si mbolea basi hata vifaa vya uvuvi.Katika dunia ya leo, unless unataka kuishi maisha ya subsistence kwa kulima locally kila kitu unachokula Thoreau style, lazima trends za world markets zitakukaba tu.

Hata kama ni kwa kupungua kwa remittances za mjomba aliyeko majuu aliyepigwa palanja katika kubeba boksi za wafanyakazi wa Lehman Brothers kwa sababu wafanyakazi wenyewe wa Lehman Brothers wamepigwa palanja.

Na hata kama ukisema mimi mkulima simjui mtu yeyote wa kuniletea remittances, bado general level ya remmittances Tanzania inayopokea inaathiri kila mtu.

 

[Game Theory]

AIG wont make it to this weekend...either the Fed gives them a loan or the Dow is down 2k tommorow!

 

[BAK]

Jobs cull begins in London and New York as Lehman Brothers goes to the wall

· Rapid sale of Merrill Lynch confirms scale of crisis
· Venerable survivors of 1929 crash fall to credit crunch

David Teather and Andrew Clark in New York, Kathryn Hopkins The Guardian, Tuesday September 16 2008

Wall Street was convulsed yesterday by the most dramatic events yet in the unfolding credit crisis, as Lehman Brothers filed for bankruptcy and Merrill Lynch agreed to be bought for $50bn as it sought to secure its future.

Lehman Brothers' options ran out late on Sunday after it failed to find a buyer, leaving more than $600bn owed to creditors in the US, Europe and Asia. Thousands of staff at the fourth largest bank on Wall Street face redundancy.

Stony-faced workers streamed into the bank's head office just above Times Square in midtown Manhattan yesterday, some with large sports bags to carry away the contents of their desks.

As well as dozens of journalists, a growing number of tourists photographed the scene. One worker leaving the office yelled out to the onlookers: "You're watching history, man."

It took just 48 hours of negotiations for Merrill to bargain away its 94-year history as an independent Wall Street brokerage by agreeing to the all-share deal. As with Lehman, it is likely to involve large job losses in New York but also in London, as the new owner of the firm nicknamed the "thundering herd" seeks to cut costs of $7bn a year.

Merrill's chief executive, John Thain, made initial contact with Bank of America on Saturday morning while he was holed up at New York's Federal Reserve for talks about the collapse of Lehman Brothers.

"Expectations for difficulties in the marketplace following Lehman's bankruptcy really led us to start thinking about what sort of transactions made sense for us," Thain told a press conference yesterday.

The crisis in the US financial markets, which began 13 months ago, appears to be escalating. Bear Stearns, another large investment bank, came close to failure and was bought at a knock-down price in March, and a little over a week ago Washington was forced to bail out Fannie Mae and Freddie Mac, which are behind half the mortgages in the US.

The failure of Lehman Brothers is the end of one of the oldest firms on Wall Street, its roots going back to 1850. It is a devastating blow for the chief executive, Richard Fuld, who has been with Lehman his entire career and run the business since 1994. The bank employs more than 25,000 people, including 4,500 in the UK.

The firm was brought to its knees by ill-judged investments in mortgage finance and other real estate. In the third quarter, the business reported losses of $3.9bn after taking huge writedowns on the value of those investments.

Last Wednesday, Lehman announced a series of measures to cut its exposure to real estate and raise cash, but Wall Street was not convinced and confidence in the firm evaporated. Its shares had lost almost 95% of their value this year.

The Lehman bankruptcy is the largest ever in terms of assets held. Outside Lehman's New York offices yesterday, one excitable news anchor described the scene as the "ground zero of the financial crisis".

Workers at the bank said management had still not made any announcements internally. "People are getting their resumes together, but it is not the best time to be looking for a job in financial services," said one man, who asked not to be named. "Dick Fuld probably held on too long. If something had been done a few months ago, we could probably have survived or we could have been acquired instead of going bankrupt."

The company has filed for Chapter 11 bankruptcy protection, allowing it to liquidate assets, which could take months or possibly years, while creditors are kept at bay. Lehman said it was exploring the sale of its broker-dealer subsidiaries, which were not included in the bankruptcy. It is also looking for buyers of its investment management division, including the asset manager Neuberger Berman.

The Financial Services Authority in London asked banks in the UK to disclose their exposure to Lehman.

The Lehman offices in the UK were essentially cut adrift and put into administration. There was an immediate ban on trading and staff were told to clear their desks. "It was surprisingly calm - there was a kind of blitz spirit in the sense that we were all in it together," one banker said. "It was made clear that there was no desire to have us hanging around."

Many have been told to return today for a briefing from the administrators. Employees hope to learn, among other things, whether they will receive monthly pay cheques due on September 21. "There's quite a lot of anger that things were allowed to get to this stage," he added.

Officials from the US treasury and the Federal Reserve had worked furiously to prevent Lehman going bust, and spent the weekend in meetings with Wall Street executives. Hope faded however when the two leading contenders, Barclays and Bank of America, walked away. Both had sought guarantees from Washington over Lehman's bad debts, a similar deal to the one brokered for Bear Stearns when JP Morgan acquired the firm. But the political will to pump further taxpayers' money into Wall Street wilted.

Renowned for its logo of a rampaging bull, Merrill Lynch was founded in 1914 by two entrepreneurs - Charles Merrill and Edmund Lynch - who met at a YMCA after moving to Manhattan.

Merrill employs 60,000 people in 40 countries. But the credit crunch has exposed huge liabilities on mortgage-related securities; Merrill has written off losses of more than $19bn and has been obliged to raise money from sovereign wealth funds from Singapore and the Middle East.

Bank of America trumpeted the deal as an opportunity to put together its vast US network of high-street banks with Merrill's roster of 16,000 financial advisers to provide an all-round service of stockbroking and investment to retail clients. The combined organisation will hold $2.5 trillion of clients' assets.

Describing the combination as a "major grand slam home run", Bank of America's chief executive Ken Lewis insisted that it was worth paying a premium of 1.8 times the book value of Merrill's assets.

At the official announcement of yesterday's deal, at Bank of America's headquarters, while both chief executives wore almost identical grey suits and red ties, Lewis grinned broadly while Thain clenched his hands, answered few questions and frowned down at the table.

Vox pop: Canary Wharf
'People were walking around in shock, girls were crying and guys were hugging and people were drinking lager and red wine in the canteen bar' Sphinx Patterson, personal trainer at Lehman Brothers

'I got an email on Sunday telling me to come in early and report to my desk and then everyone got told they were excused for the rest of the day. We are worried we won't get this month's pay cheque on Friday. I have to apply for a visa to stay in the UK now'
Duo Ai, research department

'It's unlikely anything is going to happen and everyone is finishing up. It's like a terrible death or like a massive earthquake'
Kirsty McCluskley, trading floor

'I just rented a flat with a six-month contract so I will have to find another job in London to finance it'
Edouard d'Archimbaud, first day on trading floor

'It is bad news for everyone. My career is screwed. Everyone is upset' Jack Reynolds, graduate trainee.

 

[DAR si LAMU]

Hizi bidhaa zinahitaji kusafirishwa (think price of oil), mazao haya yatahitaji pembejeo kwa aina moja ama nyingine, kama si mbolea basi hata vifaa vya uvuvi.Katika dunia ya leo, unless unataka kuishi maisha ya subsistence kwa kulima locally kila kitu unachokula Thoreau style, lazima trends za world markets zitakukaba tu.

Hata kama ni kwa kupungua kwa remittances za mjomba aliyeko majuu aliyepigwa palanja katika kubeba boksi za wafanyakazi wa Lehman Brothers kwa sababu wafanyakazi wenyewe wa Lehman Brothers wamepigwa palanja.

Na hata kama ukisema mimi mkulima simjui mtu yeyote wa kuniletea remittances, bado general level ya remmittances Tanzania inayopokea inaathiri kila mtu.

..i think you've the latest on that. and it may even go further down.

..and by the way, i was talking about wajomba zetu huko shamba,mostly.

 

[Game Theory]

Jobs cull begins in London and New York as Lehman Brothers goes to the wall

· Rapid sale of Merrill Lynch confirms scale of crisis
· Venerable survivors of 1929 crash fall to credit crunch

David Teather and Andrew Clark in New York, Kathryn Hopkins The Guardian, Tuesday September 16 2008

Wall Street was convulsed yesterday by the most dramatic events yet in the unfolding credit crisis, as Lehman Brothers filed for bankruptcy and Merrill Lynch agreed to be bought for $50bn as it sought to secure its future.

Lehman Brothers' options ran out late on Sunday after it failed to find a buyer, leaving more than $600bn owed to creditors in the US, Europe and Asia. Thousands of staff at the fourth largest bank on Wall Street face redundancy.

Stony-faced workers streamed into the bank's head office just above Times Square in midtown Manhattan yesterday, some with large sports bags to carry away the contents of their desks.

As well as dozens of journalists, a growing number of tourists photographed the scene. One worker leaving the office yelled out to the onlookers: "You're watching history, man."

It took just 48 hours of negotiations for Merrill to bargain away its 94-year history as an independent Wall Street brokerage by agreeing to the all-share deal. As with Lehman, it is likely to involve large job losses in New York but also in London, as the new owner of the firm nicknamed the "thundering herd" seeks to cut costs of $7bn a year.

Merrill's chief executive, John Thain, made initial contact with Bank of America on Saturday morning while he was holed up at New York's Federal Reserve for talks about the collapse of Lehman Brothers.

"Expectations for difficulties in the marketplace following Lehman's bankruptcy really led us to start thinking about what sort of transactions made sense for us," Thain told a press conference yesterday.

The crisis in the US financial markets, which began 13 months ago, appears to be escalating. Bear Stearns, another large investment bank, came close to failure and was bought at a knock-down price in March, and a little over a week ago Washington was forced to bail out Fannie Mae and Freddie Mac, which are behind half the mortgages in the US.

The failure of Lehman Brothers is the end of one of the oldest firms on Wall Street, its roots going back to 1850. It is a devastating blow for the chief executive, Richard Fuld, who has been with Lehman his entire career and run the business since 1994. The bank employs more than 25,000 people, including 4,500 in the UK.

The firm was brought to its knees by ill-judged investments in mortgage finance and other real estate. In the third quarter, the business reported losses of $3.9bn after taking huge writedowns on the value of those investments.

Last Wednesday, Lehman announced a series of measures to cut its exposure to real estate and raise cash, but Wall Street was not convinced and confidence in the firm evaporated. Its shares had lost almost 95% of their value this year.

The Lehman bankruptcy is the largest ever in terms of assets held. Outside Lehman's New York offices yesterday, one excitable news anchor described the scene as the "ground zero of the financial crisis".

Workers at the bank said management had still not made any announcements internally. "People are getting their resumes together, but it is not the best time to be looking for a job in financial services," said one man, who asked not to be named. "Dick Fuld probably held on too long. If something had been done a few months ago, we could probably have survived or we could have been acquired instead of going bankrupt."

The company has filed for Chapter 11 bankruptcy protection, allowing it to liquidate assets, which could take months or possibly years, while creditors are kept at bay. Lehman said it was exploring the sale of its broker-dealer subsidiaries, which were not included in the bankruptcy. It is also looking for buyers of its investment management division, including the asset manager Neuberger Berman.

The Financial Services Authority in London asked banks in the UK to disclose their exposure to Lehman.

The Lehman offices in the UK were essentially cut adrift and put into administration. There was an immediate ban on trading and staff were told to clear their desks. "It was surprisingly calm - there was a kind of blitz spirit in the sense that we were all in it together," one banker said. "It was made clear that there was no desire to have us hanging around."

Many have been told to return today for a briefing from the administrators. Employees hope to learn, among other things, whether they will receive monthly pay cheques due on September 21. "There's quite a lot of anger that things were allowed to get to this stage," he added.

Officials from the US treasury and the Federal Reserve had worked furiously to prevent Lehman going bust, and spent the weekend in meetings with Wall Street executives. Hope faded however when the two leading contenders, Barclays and Bank of America, walked away. Both had sought guarantees from Washington over Lehman's bad debts, a similar deal to the one brokered for Bear Stearns when JP Morgan acquired the firm. But the political will to pump further taxpayers' money into Wall Street wilted.

Renowned for its logo of a rampaging bull, Merrill Lynch was founded in 1914 by two entrepreneurs - Charles Merrill and Edmund Lynch - who met at a YMCA after moving to Manhattan.

Merrill employs 60,000 people in 40 countries. But the credit crunch has exposed huge liabilities on mortgage-related securities; Merrill has written off losses of more than $19bn and has been obliged to raise money from sovereign wealth funds from Singapore and the Middle East.

Bank of America trumpeted the deal as an opportunity to put together its vast US network of high-street banks with Merrill's roster of 16,000 financial advisers to provide an all-round service of stockbroking and investment to retail clients. The combined organisation will hold $2.5 trillion of clients' assets.

Describing the combination as a "major grand slam home run", Bank of America's chief executive Ken Lewis insisted that it was worth paying a premium of 1.8 times the book value of Merrill's assets.

At the official announcement of yesterday's deal, at Bank of America's headquarters, while both chief executives wore almost identical grey suits and red ties, Lewis grinned broadly while Thain clenched his hands, answered few questions and frowned down at the table.

Vox pop: Canary Wharf
'People were walking around in shock, girls were crying and guys were hugging and people were drinking lager and red wine in the canteen bar' Sphinx Patterson, personal trainer at Lehman Brothers

'I got an email on Sunday telling me to come in early and report to my desk and then everyone got told they were excused for the rest of the day. We are worried we won't get this month's pay cheque on Friday. I have to apply for a visa to stay in the UK now'
Duo Ai, research department

'It's unlikely anything is going to happen and everyone is finishing up. It's like a terrible death or like a massive earthquake'
Kirsty McCluskley, trading floor

'I just rented a flat with a six-month contract so I will have to find another job in London to finance it'
Edouard d'Archimbaud, first day on trading floor

'It is bad news for everyone. My career is screwed. Everyone is upset' Jack Reynolds, graduate trainee.

THANKS

but whats your input on the subject?

 

[DAR si LAMU]

THANKS

but whats your input on the subject?

..now mccain and obama are going to focus on issues.

 

[Game Theory]

Blanche , Dango4Dango

TUNAOMBA INPUTS ZENU KWENYE HILI

 

[MiratKad]

Not quite a buyer's market yet. Still on downside move. So keep your vijisenti under the pillow for now.