Lehman Brothers is filing for Chapter 11. It is with great sadness I say this as I have many friends who are employed at Lehman. They seem to have gotten the worst possible deal as the fed did not help bail them out.
Bank of America is buying out Merrill for $50 billion. BoA will pay $29 a share - 70% more than Sept 12 price. I wonder if they needed to pay that kind of premium for Merrill. I guess Ken Lewis likes to pay premiums for "Bargains". If this was driven by fed, I don't think they needed to pay a 70% premium!
So this is where we are. A year after governement officials kept telling us subprime issues were contained, we now have Bear Stearns, Lehman Brothers, and Merrill either merged or dissappeared.
Of course, you will have ennough analysts on CNBC calling for another bottom. But we have a long way to go.
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