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Monday, September 15, 2008

Lehman Brothers Files for Bankruptcy

Items of Interest:

New York Times:
Lehman Files for Bankruptcy; Merrill to Be Sold -- In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer...

MarketWatch:
Lehman folds with record $613 billion debt -- Lehman Brothers Holdings is closing its doors with more than $600 billion of debt -- the biggest bankruptcy in U.S. history....

Wall Street Journal:
Crisis on Wall Street as Lehman Totters, Merrill Is Sold, AIG Seeks to Raise Cash -- The American financial system was shaken to its core on Sunday. Lehman Brothers Holdings Inc. filed for bankruptcy protection, and Merrill Lynch & Co. agreed to be sold to Bank of America Corp...

Bloomberg:
Lehman Files Biggest Bankruptcy as Suitors Balk; Shares Plunge -- Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history...
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Paul Krugman / New York Times:
Financial Russian Roulette — Will the U.S. financial system collapse today, or maybe over the next few days? I don't think so — but I'm nowhere near certain. You see, Lehman Brothers, a major investment bank, is apparently about to go under. And nobody knows what will happen next.
Discussion:
Arnold Kling / EconLog: Hurricane Lehman Update, 7 AM EST
Bill Anderson / LewRockwell.com Blog: A Tale of Two Commentators
Robert Stein / Connecting.the.Dots: Money Under the Mattress?
Calculated Risk: Lehman, AIG: Late Night
Tyler Cowen / Marginal Revolution: The worst case scenario?
RELATED:
Mike Allen / The Politico:
Bank meltdown wallops campaigns — America's banking instability could upend the final 50 days of the presidential campaign, with both candidates forced to confront a calamity that has gotten only glancing attention during the first 20 months of the race for the White House.
Discussion:
Hugh Hewitt / Townhall.com: McCain-Palin On Wall Street Crisis
John Riley / Spin Cycle: Monday ten: Watch out for Wall Street
Howard Wolfson / The Flack:
It's 3am on Wall Street — During the primary the Clinton campaign posited the idea that a President would face a 3am call on the economy. It looks like one of those 3am calls came this weekend as the government made the decision to let Lehman Brothers go bankrupt rather than bail the firm out.
Terence Hunt / Associated Press:
Obama blames Wall St. crisis on Republican policy — CHICAGO - Democratic presidential nominee Barack Obama said Monday the upheaval on Wall Street was “the most serious financial crisis since the Great Depression” and blamed it on policies that he said Republican rival John McCain supports.
Discussion:
Alan Stewart Carl / Donklephant: Financial Industry Woes Continue
David Henry / Business Week:
Wall Street's Perfect Storm — Investors deal with a Lehman bankruptcy, the sale of Merrill Lynch to BofA, and a possible AIG restructuring — Mondays better not get any more manic than this. — Wall Street expected to spend today trying to contain the damage from a bankruptcy filing by Lehman Brothers …
Discussion:
Agence France Presse:
US in ‘once-in-a-century’ financial crisis : Greenspan
Discussion:
Pam Spaulding / Pam's House Blend: Greenspan's “once-in-a century” …
Abe Greenwald / Commentary: Scare Man of The Fed
Ben Smith / The Politico:
Statements on Wall Street
Discussion:
Sam Stein / The Huffington Post:
Greenspan: This Is The Worst Economy I've Ever Seen
Board of Governors of the Federal Reserve System:
For immediate release — The Federal Reserve Board …
Michelle Malkin:
The fit hits the shan on Wall Street
Wall Street Journal:
AIG Scrambles to Raise Cash, Talks to Fed
Discussion:
Real Time Economics: Can the Fed Help AIG? Will It?
Liza Porteus Viana / Political Machine: McCain's ‘Crisis’ Ad
Mark Adams / American Street: No Mo Merrill Lynch
Yves Smith / naked capitalism: AIG Asks the Fed for Help
Barry Ritholtz / The Big Picture: Lehman Brothers Liquidation Likely
Hilzoy / Washington Monthly: Wall Street
Dave Johnson / Seeing the Forest: Stuff Going On — Wall Street — On A Sunday
Calculated Risk: AIG Rejects Private Equity, Asks Fed for Help
Associated Press:
Wall Street awakes to 2 storied firms falling
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Bloomberg:
Fuld's Subprime Bets Fueled Profit, Undermined Lehman -- Richard Fuld, a one-time international squash player accustomed to working the angles, finally found one he couldn't master.

The longest-serving chief executive officer on Wall Street battled for more than a year to contain the fallout from Lehman Brothers Holdings Inc.'s bad bets on real estate. Fuld's defense of the 158-year-old firm ended yesterday when Barclays Plc and Bank of America Corp. walked away from buyout talks, forcing the company to file for bankruptcy.

Over 14 years, Fuld, 62, turned a money-losing bond trading shop into a full-service investment bank. He won acclaim from Wall Street leaders such as Lazard Ltd. chief Bruce Wasserstein, who on June 4 called him ``very able.'' Fuld joined the circle of CEOs sought-after by boards, such as the New York Federal Reserve's. Fuld ultimately gambled almost four times the firm's shareholder equity last year on mortgage securities that he insisted were hedged by other bets...
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