While I'm writing this news update just popped up. Bank of America Agrees to Buy Merrill Lynch for $44 Billion: WSJ- AP. That's a 38% premium to it's $21 book value for it's most recent quarter! Is BAC going to make MER write downs in the future??? It has to be related to the billions of counter party swap exposure because it doesn't seem like the right time to make a 38% premium bid over book value for a financial institution.
It will be interesting to see if the Bank of America/Merrill news out weighs the Lehman Brothers News. Of course if there is a deal for Lehman to sell the Neuberger Berman unit by Monday morning and survives, things might not be that bad!
And just think, it all started with the two Bear Stearns Subprime funds that blew up in July, 2007. Here's the letter Bear sent to shareholders, from the WSJ.