It’s official, Lehman Brothers Holdings Inc., the 158-year old American banking institution, is no better than the failed Bennigans restaurant franchise — it will file for Chapter 11 bankruptcy later today.
This puts a dramatic and disastrous conclusion to a whirlwind weekend for the firm that seemed to be in the driver’s seat with a deal on the table from Bank of America and Barclay’s no less than 24 hours ago. Only time will tell what really soured the chances of that life-saving deal being completed (some are saying it was Lehman CEO Dick Fuld’s ham-fisted approach and incredible arrogance), but one thing is clear: the effen credit crisis is one bad ass mofo that can topple even the untouchable. Here’s a little video recap from across the pond (BBC) on how we got here:
All the local New York news stations had footage of Lehman employees marching out of company headquarters in midtown Manhattan with all their personal belongings in cardboard boxes and gym bags. One guy had an incredible hulk t-shirt and Mets baseball cap on. Proper attire for such an incredibly shitty situation? You be the judge, but cut him some slack.
But that’s just the tip of the iceberg, the rest of this weekend’s shitshow after the jump:
In other news, Merrill Lynch was deemed to be the next of the mighty Wall Street names to fail, until it cut a massive deal with Bank of America this weekend as well. BofA will buy out Merrill for $44 billion. BofA looks pretty smart for having gotten out of the investment banking game when it did a while back, but it looks like it’s getting mixed up in some crazy shit with its Countrywide buyout and now this Merrill business.
That’s not even the end of it. Now it looks like AIG, the big insurance company, is asking for help from the government on a huge loan to solidify its business. They will announce a major restructuring on Monday.
In order to try and avoid a horrible day on Wall Street tomorrow, 10 of the big banks have come together with a $70 Billion emergency loan pool. I’m betting it will still be a pretty horrible day.
Generally speaking, the Federal Reserve and the Treasury department are not involved in this. So no worries about massive bailouts affecting your tax dollars. But unofficially, Treasury Secretary Hank Paulson and Fed Reserve Chairman Ben Bernanke have been on the phone like crazy the past two days ‘helping all these banks sort themselves out’. On-the-record, it’s a very ‘do what you want’ type of deal, while off-the-record they are calling the shots.
All of this disastrous news for Wall Street looks like it will continue and thousands of more people will lose their jobs. Where will all these unemployed people in business suits go? The bar.
Today. Is. Going. To. Be. Rough.