Busted

America’s top financial firms are staring down the business end of the famous Wall Street bull as this weekend brought additional grim financial tidings to an already depressed market.

Regulators scrambled Sunday to minimize potential damage in advance of this morning’s market opening, but it could be too little, too late.

So what happened to get everybody’s balls … err, bulls … in a sling?

Well, Lehman Brothers is about to be liquidated after the U.S. Federal Reserve and Treasury Department couldn’t find a buyer for the struggling financial colossus. Merrill Lynch, which is also feeling the bust of the housing market, got sold at midnight last night for a song to Bank of America. And AIG? They’re desperately struggling to raise cash by announcing a fire sale of the firm’s most profitable assets.

From this morning’s Wall Street Journal:

The only thing anyone knows for certain is that today will be tumultuous for financial markets, after a historic Sunday that has remade Wall Street. With Lehman Brothers probably on the road to liquidation, and Merrill Lynch to be acquired by Bank of America, we are getting a Category 5 test of our financial levees.

This latest crisis come on the heels of Bear Stearns’ collapse earlier this summer – as well as the government bailout of struggling mortgage giants Fannie Mae and Freddie Mac.

The Fannie-Freddie bailout will ultimately cost taxpayers between $300 and $500 billion, but the Bush administration is refusing to include the initial cash outlay in a budget deficit that’s already over $400 billion for the year.

Nice. Because exactly what we need in a Wall Street panic is more bad accounting from the government.

Comments

Trackbacks

• Sarah Speaks | FITSNews