Lehman Brothers is expected to file for bankruptcy protection Sunday night, according to the New York Times, running out of options after potential deals collapsed and federal regulators stuck to their position that Lehman was not "too big to fail." The ripples have been immediate and dramatic:
- There are numerous reports that Merrill Lynch is in advanced talks to be acquired by Bank of America for $38 to $40 billion, with its board meeting tonight to decide on the offer. UPDATE: The deal is reportedly done, with Merrill selling to BofA at $29 a share.
- A consortium of banks is said to be discussing an emergency lending pool of up to $50 billion that could be used to aid financial companies with exposure to Lehman.
- American International Group (AIG) is reportedly preparing to announce a "comprehensive restructuring" early Monday in which it will sell key assets to raise capital.
What does this mean for Monday's trading session? A large helping of fear for the market to digest, with a side helping of uncertainty and doubt. To track the fast-moving developments, check out the Wall Street Journal, DealBreaker, 24/7 Wall Street and CNBC.