Sunday, September 14, 2008

6:55 p.m. EDT: The Mother of All Mondays (AIG; LEH; MER)

From the Wall Street Journal's MarketBeat blog:
Investors world-wide have rarely rolled out of bed to face a Monday morning quite like the one they’ll contend with this Monday.

Sundays have long been host to important corporate news, from big mergers to bankruptcies. But this weekend, in an extraordinary meeting that recalled the summit called ten years ago amid the meltdown of hedge fund Long-Term Capital Management and J. Pierpont Morgan’s efforts more than 100 years ago to rescue a series of ailing banks, Wall Street’s most senior deal makers and regulators raced to find a deal that would keep storied Lehman Brothers Holdings from collapse. At this hour, their efforts have yet to yield any fruit. Barclays, which had come to be viewed over the weekend as the most likely bidder for the badly ailing Lehman, pushed away from the bargaining table on Sunday. The main impediment appeared to be that the U.S. government is reluctant to backstop a deal, as it had amid the Bear Stearns meltdown in March....MORE

MarketBeat updates:

UPDATE at 6:39 PM EDT: Dow Jones Industrial Average futures were down roughly 300 points in recent trading.

UPDATE at 6:48 PM EDT: The Journal is reporting that a Bank of America-Merrill deal is closer, with an all-stock deal expected at $26 a share or greater. However, the situation remained fluid and any deal could still falter. Meanwhile AIG plans to shift capital from its regulated insurance business to its holding company, a source has told the Journal. The move is intended to improve AIG’s liquidity position. The measures involve $0 to $50 billion in capital allocation and new capital, the source says.