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It was one of the most tumultuous weekends in Wall Street history.
Lehman Brothers, the fourth-largest investment bank in the United States, announced it is filing for a record bankruptcy after federal intervention failed to find a willing buyer Sunday. Bank of America (BoA), originally a Lehman suitor along with Barclays and others, is planning to buy Merrill Lynch instead for roughly $50 billion. Insurance giant AIG, meanwhile, is sinking and needs $40 billion to stay afloat. The Federal Reserve announced new measures to help markets cope with the fallout.
U.S. Treasury Secretary Henry Paulson was adamant that American taxpayers not foot the bill for a Lehman bailout, a condition that proved too hard for BoA and Barclays -- who wanted the healthy parts of Lehman but not its "toxic waste" -- to swallow. When the companies walked away from a deal Sunday, Lehman had no choice but to file for bankruptcy.
World stock markets tanked on the news, and oil is now trading below $100 a barrel. Today could get ugly on Wall Street as investors flee to safer assets such as Treasury bills or foreign currencies.
Appearing on ABC's This Week Sunday, former Federal Reserve Chairman Alan Greenspan said the United States is in a "once-in-a-century" financial crisis. Columnist Paul Krugman accused Paulson of "playing Russian roulette with the U.S. financial system." Pimco's Bill Gross sees the "risk of an immediate tsunami" from Lehman's liquidation.
Now, some fear that speculators will take aim at other troubled financial firms.
Lehman's CEO, by the way, took home a $22 million bonus for 2007.
Democratic Sen. Barack Obama raised a record $66 million in August.
Democrats ripped into Alaska Gov. Sarah Palin on the Sunday talk shows.
Rescue workers in Texas are scrambling to help those stranded or left without food, water, and electricity by Hurricane Ike. So far, the storm has killed at least 10 Americans.
Bolivia's crisis escalated as violence killed at least 30 people over the weekend. The violence shut off a pipeline that provides a quarter of Brazil's gas supplies. Talks are underway in La Paz to quiet the unrest, and regional leaders are gathering in Santiago, Chile, to discuss the situation.
In solidarity with Bolivia, Nicaraguan President Daniel Ortega says he will refuse to meet with U.S. President George W. Bush.
North Korean leader Kim Jong Il can supposedly brush his teeth now, but the South Korean government is preparing contingency plans in case of his death. According to one South Korean report, his concubine is running the country at the moment.
A series of five bombs killed at least 22 people in New Delhi.
Pakistani troops fired at U.S. military helicopters in South Waziristan, turning them back across the Afgan border.
Iraqi Kurds' bid to control a disputed slice of Iraq is strirring up Arab anger.
Gen. David Petraeus is stepping down as commander of U.S. forces in Iraq and moving to CENTCOM. Here's his final letter to the troops.
Zimbabwe's president and its leading opposition figures signed a historic power-sharing arrangement.
Britain's travel industry is in a world of trouble.
The European Parliament is considering limiting a key target for biofuels.
The pilot of a Russian airliner that crashed Sunday in the Ural mountains "flew oddly," the BBC reports.
A NATO delegation is visiting Georgia to convey support.
U.S. Defense Secretary Robert Gates is visiting Baghdad.
President Bush welcomes Ghana's president to the White House.
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