Lehman Bankruptcy imminent; Fuld's hubris; Fed initiatives; 10 banks fund $70B loan facility; AIG goes to the Fed for help; Electronic Arts ends Take Two buyout talks; Oil drops to 6 month lows

• Lehman Said to Prepare Bankruptcy as Buyers Withdraw
• Lehman CEO Fuld's hubris contributed to meltdown
• Fed to take broader range of collateral on loans
• Paulson applauds actions to aid market stability
• Ten banks commit to $70 billion borrowing facility
• AIG Scrambles to Raise Cash, Talks to Fed
• Electronic Arts Ends Acquisition Talks With Take-Two
• Oil Falls to Six-Month Low as Refineries Escape Major Damage

Lehman Said to Prepare Bankruptcy as Buyers Withdraw - Bloomberg

Lehman Brothers Holdings Inc. prepared to file for bankruptcy after Barclays Plc and Bank of America Corp. abandoned talks to buy the U.S. securities firm and Wall Street prepared for its possible liquidation.

Lehman and its lawyers are getting ready to file the documents for bankruptcy protection tonight, said a person with direct knowledge of the firm's plans. A final decision hasn't been made, though none of the other options being considered appeared likely, the person said, declining to be identified because the discussions haven't been made public.....

Lehman CEO Fuld's hubris contributed to meltdown - Reuters

Not long ago, when Lehman Brothers CEO Richard Fuld talked about "everyone's worst nightmare" he was referring to a massive fraud at French bank Societe Generale.

Just a few months later Fuld, a 30-year-veteran of Lehman who had ably steered it through near-death experiences like the Asian debt crisis of 1998, is living his own worst nightmare as the venerable investment bank stands on the verge of collapse.....

"Fuld went wrong in not taking seriously enough the impairment of his balance sheet," said Charles Peabody, analyst at independent research firm Portales Partners

"He had the typical hubris that any long-term CEO has: 'I built this thing, and it's got more value than the marketplace understands.'"....

Fed to take broader range of collateral on loans - Reuters

The Federal Reserve announced a series of steps on Sunday night to boost liquidity and try to avoid widespread market disruptions in the wake of the apparent collapse of efforts to sell Lehman Brothers.

The U.S. central bank said it was broadening the type of collateral that financial institutions can use to obtain loans from the Fed. It also said it would increase the amount of Treasury securities it auctions on a regular basis to help foster liquid markets.

Ten banks commit to $70 billion borrowing facility - Reuters

Ten of the world's biggest banks on Sunday committed to establish a $70 billion borrowing facility to bolster worldwide liquidity and reduce volatility in what they called an "extraordinary market environment."

Each bank has committed to fund $7 billion for the collateralized facility, and any one of the 10 banks would be permitted to borrow up to one-third of the total facility, the banks said in a joint statement. The financing may grow "as other banks are permitted to join," they said....

Paulson applauds actions to aid market stability - Reuters

U.S. Treasury Secretary Henry Paulson said on Sunday he supported this weekend's actions by market participants, the Federal Reserve and the Securities and Exchange Commission to strengthen and enhance financial market stability.

Without mentioning the fate of Wall Street investment bank Lehman Brothers nor the widely reported deal for Bank of Americato buy Merrill Lynch, Paulson said the actions were critical to "facilitating liquid, smooth-functioning markets and addressing potential concerns in the credit markets."

"I particularly appreciate the efforts of market participants who came together this weekend and initiated a set of steps to facilitate orderliness and stability in our financial markets as we work through this extraordinary environment," Paulson said in a statement.....

AIG Scrambles to Raise Cash, Talks to Fed - Wall Street Journal

Insurer American International Group Inc., succumbing to relentless investor pressure that drove its shares down 31% on Friday alone, is pulling together a survival plan that includes selling off some of its most valuable assets, raising more capital and possibly going to the Federal Reserve for help, people familiar with the situation said.

During a weekend scramble to shore up its finances, AIG turned down a capital infusion from a group of private-equity firms because it would have effectively given them control of the company, an 89-year-old giant that does business in nearly every corner of the world....

Electronic Arts Ends Acquisition Talks With Take-Two - Bloomberg

Electronic Arts Inc., the second- largest video-game publisher, said it ended discussions with Take-Two Interactive Inc. and won't make a proposal to buy the company.

Electronic Arts made the decision after considering management presentations and other due-diligence materials, it said in a statement today. Take-Two, the maker of the top-selling ``Grand Theft Auto'' series of games, is ``actively engaged'' in talks with other parties to consider strategic options, Chairman Strauss Zelnick said in a separate statement....

Oil Falls to Six-Month Low as Refineries Escape Major Damage - Bloomberg

Crude oil fell to a six-month low in New York and gasoline tumbled amid signs that refineries along the Gulf of Mexico coast will soon resume operations after escaping major damage from Hurricane Ike.

About 20 percent of the U.S.'s oil refining capacity was shut, limiting fuel deliveries and prompting the Department of Energy to release 309,000 barrels from its strategic reserves. New York Mercantile Exchange electronic trading opened early today to allow traders to respond to Ike.....