[Marxism] `Tectonic' Shift on Wall Street as Lehman Fails, Merrill Sold

[Sky Keyes-Vogt]

"In the biggest reshaping of the financial industry since the Great
Depression, two of Wall Street's most storied firms, Merrill Lynch &
Co<http://www.bloomberg.com/apps/quote?ticker=MER%3AUS>.
and Lehman Brothers Holdings
Inc.,<http://www.bloomberg.com/apps/quote?ticker=LEH%3AUS>headed
toward extinction."

`Tectonic' Shift on Wall Street as Lehman Fails, Merrill Sold

http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=abVpg8xJDMWk


Sept. 15 (Bloomberg) -- In the biggest reshaping of the financial industry
since the Great Depression, two of Wall Street's most storied firms, Merrill
Lynch & Co <http://www.bloomberg.com/apps/quote?ticker=MER%3AUS>. and Lehman
Brothers Holdings
Inc.,<http://www.bloomberg.com/apps/quote?ticker=LEH%3AUS>headed
toward extinction.

New York-based Lehman, founded 158 years ago, said early today that it filed
for Chapter 11 bankruptcy protection after failing to find a buyer. Merrill
Lynch, 94 years old and also based in New York, agreed to sell itself to
Bank of America Corp. for $50 billion in an emergency deal hashed out
yesterday.

``The tectonic plates beneath the world financial system are shifting, and
there is going to be a new financial world order that will be born of
this,'' said Peter
Kenny<http://search.bloomberg.com/search?q=Peter+Kenny&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>,
managing director at Knight Capital Group Inc., the Jersey City, New
Jersey-based brokerage that handles about $1 trillion worth of stock
transactions a quarter. ``It's an ugly and painful process.''

The engines that powered record
growth<http://www.bloomberg.com/apps/quote?ticker=XBD%3AIND>in the
financial industry over the last decade -- cheap credit and surging
property values -- have been thrust into reverse. Companies that once
thrived on making real estate loans and holding assets bought with borrowed
money are now under siege, giving the upper hand to those less reliant on
leverage and holding the fewest assets tied to property.

The industry convulsions that started last year have already eliminated Bear
Stearns Cos., forced into a cut-price sale to JPMorgan Chase &
Co.<http://www.bloomberg.com/apps/quote?ticker=JPM%3AUS>with
government support in March. A week ago, the U.S. Treasury placed
mortgage companies Fannie
Mae<http://www.bloomberg.com/apps/quote?ticker=FNM%3AUS>and Freddie
Mac into conservatorship, guaranteeing their widely held debt
securities while all but erasing their equity value.

American International Group Inc., once the world's largest insurer, is
struggling to raise cash to avoid a credit-rating downgrade that could
cripple its business.