IN ONE of the most dramatic days in Wall Street's history, the US investment banking giant Lehman Brothers has announced its bankruptcy as the US Federal Reserve and major global banks moved to shore up financial markets shaken by the subprime mortgage crisis.
As Lehman hurtled toward liquidation after failing to find a buyer, Merrill Lynch sold itself to Bank of America for $US50 billion ($61.2 billion) in an emergency deal to avert a deepening crisis.
The moves, which reshape the landscape of US and global finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees by losses of tens of billions of dollars, the result of bad mortgage finance and real estate investments.
They were the culmination of a weekend of frantic talks as Wall Street bankers huddled in meetings called by Bush Administration officials to try to avoid a downward spiral in the markets caused by a crisis of confidence.
Peter Peterson, who headed Lehman in the 1970s and was a secretary of commerce to Richard Nixon, said:
"My goodness. I've been in the business 35 years, and these are the most extraordinary events I've ever seen."
Giants fall on judgment day
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Originally Posted by .Czar
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ing system is rotten as hell, and the free market surely underlines this fact.
