In July, when Richard Fuld was blaming rumormongers and short-sellers for troubles as Lehman Brothers, the Times ran a column by finance writer Andrew Ross Sorkin echoing his complaints and calling one of the rumors, that Barclays would acquire Lehman, "absurd." Today, with Barclays buying Lehman's U.S. operations, the Times is still siding with investment banks over investors, depositors and others who benefit from the free flow of information. Here's some data the paper won't be providing about the mess on Wall Street, according to an article it published today:

♦ Morgan Stanley and Goldman Sachs have won approval to become bank holding companies, which will give them greater access to federal funds and also put them under tighter oversight and regulation. [WSJ, NYP]
♦ After suspending talks with Wachovia over the weekend, Morgan Stanley announced this morning that it is selling a 10-20 percent stake to Japan's largest bank, Mitsubishi UFJ. [WSJ, Bloomberg]
♦ The proposed $700 billion bailout package turned into a political football this weekend. [WSJ, NYT]
♦ Nomura will pay $225 million for Lehman's Asian operations. [WSJ]
♦ After last week's wild ride, everyone is bracing for another eventful week on Wall Street. [NYT]

The Federal Reserve announced the conversion of the last two independent investment banks into bank holding companies. The change means Goldman Sachs and Morgan Stanley can borrow money from the Federal Reserve past January but will be more tightly regulated and must hold larger capital reserves. As the Wall Street Journal dramatically put it:

"Trinity Church, which became an emotional refuge amid the fallout at ground zero, is offering services to its neighbors during a time of crisis: free spiritual and psychological counseling for workers who have been affected by the current Wall Street financial turmoil." Oh ha, it's the 9/11 of bankers getting fired! Will the free spiritual counseling encourages downtown assholes to renounce materialism or something? (Is that likely from the this particular church?) More: "And because they are typically measured by the size of their paychecks - bonuses, in particular - their self-worth is deeply threatened when the money evaporates." Words fail! Anyway. Free counseling! As usual, self-medication is by necessity self-financed. So far that's not stopping anyone!

Lehman Brothers gave $39 million to charity last year; Merrill Lynch handed out $43.7 million in 2007. So it's not surprising that charities in the city are now wondering how they're going to make ends meet. [Forbes]

Who's making money in this lousy economy? Mega-lawyer Rodge Cohen of Sullivan & Cromwell sure is! He handled both Lehman's bankruptcy and the AIG bailout this week. [AmLaw via ATL]

If you're looking for a bargain in Greenwich, here's your chance. Next week the IRS will be auctioning off disgraced hedge funder Michael Lauer's mansion at 7 Dwight Lane, with the bidding starting at just $2.5 million. Lauer, who founded Lancer Management, which once had $1 billion in assets, was indicted earlier this year for allegedly bilking investors out of more than $200 million between 1999 and 2003. Now the IRS will hand over the keys to Lauer's former home at a public auction next Friday. But if you're thinking about bidding, you might want to make sure you have a good contractor (or demolition crew) on speed dial. Here's why:

What timing! A flack reports: "the Ad Council just launched a ‘Financial Campaign' for the Department of Treasury, to educate the youngin's about debt management, credit history, credit cards, and the like." It is called ControlYourCredit.gov, and it seems to be inspired, appropriately, by Psycho and Barton Fink, two hellish tales of psychotic breaks with reality that take place in hotels, like this website, and our economy. Cute! You are supposed to somehow play this game in the lobby of this creepy hotel in order to make it to "Room 850," because ha ha, even though you now have perfect credit you still cannot afford a house, stupid millennial. Here is why this is sad:

The Dow soared 410 points today, which is good news and why WSJ.com now has a picture of a trader with a big smile on his face. And Attorney General Andrew Cuomo is now promising to punish the evildoers who are impinging on the ability of 25-year-old Wall Street analysts to pay for $800 bottles of vodka. That's good news, too. The bad: Morgan Stanley may very well still end up in Chinese hands and no one trusts anybody anymore. Even worse: companies are installing treadmills in the office so employees can walk while they work, which may be the scariest thing we've seen all day.

The Times reported on the front page of the paper today that Morgan Stanley CEO John Mack approached Citi chief Vikram Pandit on Tuesday night about combining the two banks. "We need a merger partner or we're not going to make it," Mack allegedly told Pandit. True? Probably not! Remember when Times said that Zoe Cruz would succeed Mack as Morgan's CEO and then she was fired 19 days later? Exactly. Well, the Times has since backpedaled: "The Times's two sources have since clarified their comments, saying that because they were not present during the discussions, they could not confirm that Mr. Mack had in fact made the statement. The Times should have asked Morgan Stanley for comment and should not have used the quotation without doing more to verify the sources' version of events." Maybe the Times also should try and spell names correctly when issuing corrections? [NYT]

Things at Morgan Stanley are getting uglier by the minute. Shares are down another 25 percent thus far today and hedge funds have been directing their business elsewhere. John Mack is now reportedly stepping up merger discussions with Wachovia. There's also talk of splitting the bank in two, a "good bank" and a "bad bank." Because that idea worked out really nicely for Lehman, didn't it? [Dealbook]

If you're a vulture investor and you're profiting from the current market turmoil, it's only expected that you'll generate a bit of negative press. When you make your big bets in England, though, you get to see yourself described as a "greedy pig" in the headline. The Mirror reports today that New York's very own Phil Falcone—the hockey-loving billionaire mogul who purchased the Guccione mansion last year for $49 million, has a giant stake in the New York Times, is the proud owner of a pet pig named Pickles, and is married to the plastic surgery-lovin' Lisa Falcone—may have earned "hundreds of millions" by betting that the price of Britain's HBOS would fall.

It's the nature of the media business to take profits from the suffering of others, and coverage of the recent financial meltdown is no exception, helping to drive online traffic and (no doubt) newsstand sales. But the Wall Street Journal should be more discreet about its gloating, particularly given the newspaper will soon eject 50 of its own staff into the economic wilderness now home to the likes of Lehman Brothers. At least one Journal staffer was none too pleased to see an internal news item today headlined "Market Turmoil Provides Hook to Sell U.S. Journal in London." (It's reprinted in full after the jump.)

Dick Fuld's enthusiastic assistant has returned to her desk! The same young lady who was picking up the Lehman Brothers chairman's line on Friday—but was noticeably absent yesterday—is once again taking Dick's calls. We can't imagine dealing with calls from pesky reporters all day is much fun, but we salute you for your dedication and hard work. And we hope Dick's lined up a job for you at Barclays.

Joe Gregory, the former president of Lehman Brothers and Dick Fuld's right-hand man until he was ousted in June, has put his Bridgehampton manse on the market. For $32.5 million, you'll get a 9,500-square-foot house with 8 bedrooms, 8.5 bathrooms and magnificent views of the Atlantic Ocean. [Real Estalker]

"Financial ad spending might be soft over the next quarter or so," an executive tells Adweek today. We were like, ha, might be? "Soft?" Quite a gift for understatement, greasy ad dude. Or so we thought! But the optimistic take on reality is that the burning of Wall Street might not be so bad for the ad industry. In fact for some lucky agencies, it will be a freaking bonanza!

If you're looking for some reassurance during these rocky times when Wall Street firms are going bankrupt, laying off thousands, and entering into last-minute mergers, perhaps this 30-second commercial from the last recession will put those worries to bed. "In the midst of the storm, it's only natural to wonder where the future will lead," the spot stars off before adding that "no adversity lasts forever." So true, so true.

Since Lehman Brothers filed for bankruptcy on Monday, lots of people have wanted to talk to Richard Fuld (in a dark alley, preferably). But the Lehman CEO hasn't been seen in days. Now Rep. Henry Waxman has requested Fuld show his face before Congress next week to address "regulatory mistakes and financial excesses" that led to the firm's bankruptcy. Dick won't be required to appear, though, so we're guessing he'll elect to hide out in his bunker instead. [Dealbook]

♦ Fearing another massive corporate bankruptcy, the Federal Reserve agreed to an $85 billion bailout of the troubled insurance giant AIG. [NYT, WSJ, Fortune, NYP]
♦ AIG's CEO, Robert Willumstad, will be replaced by Edward Liddy, the former CEO of Allstate. [Marketwatch]
♦ AIG's ex-CEO Hank Greenberg is dismayed he wasn't involved in the bailout effort. Considering he's tangled up in about half a dozen lawsuits with his former company, that wasn't so surprising. [WSJ]
♦ Concern now seems to be focused on Washington Mutual: Federal officials have contacted Wells Fargo, JPMorgan, and HSBC to gauge their interest in a possible acquisition of WaMu. [NYP]
♦ John Thain and two of his deputies stand to make $200 million for the year they've spent at Merrill. [Bloomberg]

In December, Fortune magazine admitted it had been remiss naming insurance giant AIG one of its "10 Stocks To Buy Now" before a yearlong 18 percent decline. "We... didn't expect [the] mortgage unit to be such an albatross," editors wrote. To correct the error, the magazine had a fresh list of "The Best Stocks For 2008" — including Merrill Lynch. "Smart investors should buy this stock before everyone else comes to their senses," Fortune wrote, calling a recent correction in Merrill stock "an overreaction." Investors who followed this advice are now down 93 61 percent. All the big financial magazines butter their bread with dubious prescriptions for how hobbyist investors can beat market professionals, so Fortune is hardly alone in being humiliated by the ongoing market meltdown. We'll spread the embarrassment around after the jump.