Wednesday—the crunch goes on.
AIG, racing against the clock to avoid a bankruptcy filing, makes a deal with the Federal Reserve for loans up to $85 billion in exchange for a 79.9 percent stake in the insurer. Former Allstate Chief Executive Edward Liddy will replace Robert B. Willumstad as CEO.
British bank Barclays agrees to buy bankrupt Lehman Brothers' North American investment banking and capital markets businesses, its New York headquarters and two data centers for about $1.75 billion.
The New York Fed provided at least $87 billion to help underpin trades with Lehman in an effort to shore up the financial system, released court documents show.
What You Were Reading:
- McCain Softens His Opposition To AIG Bailout
- Full Story: AIG to Get $85 Billion, Give Up 79.9% Stake
- Poll: Was the Govt Wrong to Bail Out AIG?
Morgan Stanley officials are weighing whether the firm should remain independent or merge with a bank, reports avid Faber and Charlie Gasparino.
Later today, Wachovia and China's Citic emerge as possible merger partners. (Eventually, Wachovia will be acquired by Wells Fargo .)Struggling savings-and-loan Washington Mutualhas put itself up for auction, The New York Times reports. (JPMorgan Chase will eventually buy most of WaMu.)
