Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history.
The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The collapse of Lehman lists more than $613 billion of debt.
Lehman was forced into bankruptcy after Barclays Plc and Bank of America Corp. abandoned takeover talks yesterday and the company lost 94 percent of its market value this year. Chief Executive Officer Richard Fuld, who turned the New York-based firm into the biggest underwriter of mortgage-backed securities at the top of the U.S. real estate market, joins his counterparts at Bear Stearns Cos., Merrill Lynch & Co. and more than 10 banks that couldn't survive this year's credit crunch.
AIG Scrambles to Raise Cash, Talks to Fed
AIG executives are worried that such an action would set off a chain reaction that could be fatal to the firm..... The company has already received permission from New York Gov. David Paterson to access as much as $20 billion in capital from its subsidiary companies to cover its day-to-day operating needs. The problems come from mostly from the company's credit derivatives portfolio of subprime-backed securities. Those losses have risen steadily as the subprime mortgage crisis worsens. The company has also reported losses in its own investment portfolio and losses in its mortgage-insurance unit.
AIG has been pulling together a survival plan that includes selling off some of its most valuable assets, raising more capital and going to the Federal Reserve for help, people familiar with the situation said.
The measures are aimed at staving off a downgrade by major credit-rating firms. AIG executives worried that such an action would set off a chain reaction that could be fatal to the firm. The insurer, which has already raised $20 billion in fresh capital so far this year, was seeking to raise an additional $40 billion to avoid a downgrade.
During a weekend scramble to shore up its finances, AIG turned down a capital infusion from a group of private-equity firms led by J.C. Flowers & Co. because an option tied to the offer would have effectively given them control of the company, an 89-year-old giant that does business in nearly every corner of the world.
Bank of America Corporation, the biggest U.S. consumer bank, agreed to acquire Merrill Lynch & Co. for about $50 billion as the credit crisis claimed another of America's oldest financial companies.
Bank of America will pay $29 a share for New York-based Merrill in stock, 70 percent more than the Sept. 12 closing price, the company said in a statement today. Merrill, battered by $52.2 billion in losses and writedowns from subprime-mortgage- contaminated securities, has plunged more than 80 percent from its peak of $97.53 at the start of last year.
The takeover ends 94 years of independence for Merrill and gives Charlotte, North Carolina-based Bank of America a sales force with 16,690 brokers who manage $1.6 trillion for customers. Merrill, led by Chief Executive Officer John Thain, was in danger of becoming the next subprime casualty after Lehman Brothers Holdings, Inc. filed for bankruptcy court protection earlier.
Blu-ray will be dead by 2012, TechRadar reports
Planning to buy a Blu-Ray player? Hold on. It's already battling public indifference, technical problems, laughable features and downloadable movies. Is it any wonder Blu-Ray is doomed to fail? Here are five reasons why it's heading for the grave...
http://www.techradar.com/news/video/hd-dvd/5-reasons-why-blu-ray-could-be-dead-by-2012-464705
Women experience significantly more nightmares than men and have more emotional dreams, research suggests
In a study of 170 volunteers asked to record their most recent dream, 19% of men reported a nightmare compared with 30% of women. Researcher Dr Jennifer Parker of the University of the West of England said there was no difference in the overall number of dreams reported. Other research has shown women tend to have more disturbed sleep than men.
Hackers claim they have broken into the computer system of the Large Hadron Collider, the mega-machine designed to expose secrets of the cosmos, British newspapers reported on Saturday.
A group calling itself the Greek Security Team left a rogue webpage mocking the technicians responsible for computer security at the giant atom smasher as "schoolkids", the Times and Daily Telegraph reported. The hackers vowed they had no intention of disrupting the experiment at the European Organisation for Nuclear Research (CERN) on the Swiss-French border, they just wanted to highlight the flaws in the computer system's security.
"We're pulling your pants down because we don't want to see you running around naked looking to hide yourselves when the panic comes," they wrote, according to the Daily Telegraph.
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