Bank of America to buy Merrill Lynch

NEW YORK - A failed plan to rescue Lehman Brothers was followed Sunday by more seismic shocks from Wall Street, including an apparent government-brokered takeover of Merrill Lynch by the Bank of America.

news.yahoo.com...

This from yahoo at around 10:30 tonight. What is more disturbing is that it appears the government is making this happen.

Merrill Lynch, another investment bank laid low by the crisis that was triggered by rising mortgage defaults and plunging home values in the U.S., agreed to be acquired by Bank of America for $29 a share, according to the Wall Street Journal. That's a premium to its closing price on Friday of $17.05 but only a fraction of its price of almost $100 a share early in 2007.

I think now you're going to see the power of the financial markets in the hands of a few groups. JP Morgan is one, Bank of America the other. Goldman Sachs seems kind of quite; I would expect them to either continue laying low or pick up some failing company.

As stated previously, I still believe Citi will post losses - probably $5-7 billion more. I can't remember if I talked about Merrill Lynch or not, but they where one I was not high on nonetheless.

As much as I would like the companies that are failing to fail, I wonder just how bad it would be if they where allowed to fall - as is the case in a "recession".

Anyways, look for Monday to be a bad day in the market, and probably a pretty bad week in general with the possible exception of the oil stocks.