Apparently Merrill Lynch didn't like what was going on at Lehman, and feared the same thing was going to happen to their firm: bankrupcy, and "orderly liquidation."
So now according to the Wall Street Journal, Merrill is being sold to Bank of America, evidently one of the few solvent financial institutions left in the country.
It looks like the rich will get richer before this mess is over. Firms like Goldman, Sachs who avoided the mortgage game when it was beyond peak froth stand to profit handsomely as they pick up the pieces of many hallowed and historical firms that overreached.
What does this mean for Monday? The apparent failure to reach a deal re: Lehman is bad, but the Merrill sale is enough of a mixed bag that there shouldn't be any prolonged downturn tomorrow. That, and Friday's action was not nearly negative enough to set the stage for a market breakdown. I'd guess that there will be a vacillating market tomorrow; overseas markets may plummet, but the U.S. will be up and down and end not far from unchanged. Who knows, depending on how traders treat the news, it could be seen as another merger mayhem, and end on a high note.
In the long run, though, it still looks like a terrible mess. The market's not nearly done going down, as I see it.
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