After London had fallen sharply for the second day, bringing it perilously close to the 5,000 level, Wall Street rallied on news that the Federal Reserve, far from abandoning Wall Street to its fate as it had Lehman Brothers, was prepared to pump up to $85bn into troubled insurer AIG.
In return it is replacing CEO Robert Willumstad with Edward Liddy, the former boss of insurer Allstate, and effectively taking control of 79.9% of the shares and the company's dividend and investment policy.
AIG, by some definitions still the world's biggest insurer, is bust in all but name.
It's holding a toxic hand of $441bn credit default swaps - insurance on iffy securities -- and has had to stump up a further $18bn in collateral on these as its credit rating was savaged.
It didn't have this money of course, so the Fed felt it had to step in. The banks holding these securities would have taken a further huge hit if insurance cover had been removed and the Fed and Treasury secretary Hank Paulson weren't prepared to risk this.
At the same time the New York Federal Reserve (the Fed is made up of various regional bodies) lent JP Morgan $87bn to help it wind down outstanding Lehman Brothers trades.
This money could have gone to Lehman Brothers itself of course, but that wouldn't have sent out the right hardball message.
The Fed also wisely held interest rates at 2%. If rates fall lower than this there's the danger of recreating the situation the Japanese suffered from through the 1990s when zero interest rates, introduced to help the banking sector inevitably, meant that nobody saved anything.
And the Japanese economy stagnated for a decade.
A final boost to the markets were figures from remaining investment bank giants Goldman Sachs and Morgan Stanley which came in slightly ahead of expectations.
So the morning after the night before wasn't quite as bad as people feared.
Will Lloyds ride to rescue the Halifax?
Andy Hornby, CEO of Halifax Bank of Scotland won't have been feeling at all sanguine this morning.
The shares were hammered mercilessly again yesterday as investors fretted over its need to re-finance £100bn of its lending in the wholesale markets by the year end.
The interbank lending rate soared from 5.5% to 6.8% yesterday following the nightmare on Wall Street and, should this or a level close to it be maintained, HBOS earnings will take a savage hit.
The company is still the UK's biggest savings institution with £258bn in deposits but that didn't stop a credit rating downgrade from Standard and Poors adding to Hornby's woes yesterday.
Now valued at a mere £9.6bn HBOS is seen, unfairly, as just a bigger version of Northern Rock.
However its shares led financials up on the FTSE 100 today (Wednesday) as dealers grew more convinced that a bid from Lloyds TSB was on the way, encouraged by the Bank of England and the Treasury.
The BBC's Robert Peston, who certainly knows his banking, reckons Lloyds will bid closer to the 300p HBOS shares were riding at before it announced its recent £4bn rights issue.
In which case shareholders would bite Lloyds hand off and Bank of England governor Mervyn King, Chancellor Alistair Darling and possibly even Andy Hornby would sleep a bit more easily.
Barclays swoops on Lehman nugget
Barclays Capital boss Bob Diamond finally managed to get a piece of Lehman Brothers yesterday, buying the bank's capital markets (stockbroking) division for $1.75bn.
Diamond had been interested in bidding for the whole thing but was reined back by the rest of the board at the last minute.
Barclays Capital is the most profitable part of the bank but, in effect, Barclays really seems to be two banks, with Diamond running his bit and CEO John Varley the rest.
In another world (ie a year ago) investors would have been pressing for the bank to be split in two. However no-one trusts investment bankers to rampage around on their own these days.
But the market (and the regulators) will be keeping a close eye on Barclays' fortunes as many fear there could be further big write-downs to come.
BAA to sell Gatwick
British Airports Authority has announced it wants to sell Gatwick airport for £1.8bn, getting its retaliation in first before the competition authorities confirm that it needs to sell two of its three London airports (it clearly isn't going to sell Heathrow so that means Stansted).
At first glance this looks a hell of a time to try to be selling an airport but BAA's Spanish owner Ferrovial is heavily-borrowed and the company, a builder originally, must be heavily exposed to the Spanish property crash.
This will interest, among others, Sir Richard Branson, still mired in misery after his failure to land Northern Rock.
Having his very own Virgin airport would be a fitting culmination to the career in aviation part of his life although he won't want to give up his precious Heathrow slots.
Is it the endgame for Woollies?
Just a year short of its centenary in the UK Woolworths is struggling to make the finishing line.
Today it announced that half-year losses had increased from £64m to £90m, although its DVD businesses had performed well.
In other words the shops are pretty much a lost cause.
Woollies depends almost exclusively on Christmas for retail revenue and it's possible that its cheap and cheerful offering will suit consumers this year.
New CEO Steve Johnson, from DIY retailer Focus, clearly has a big job on his hands but it seems increasingly unlikely that he'll be given the time to do it.
But Woollies' collection of prime high street sites would suit the likes of rampant grocery discounters Aldi and Lidl perfectly, while Iceland's Malcolm Walker may come back with a second bid (that's if his Icelandic, yes, really, backers still have any money).
Woollies may well have a new owner by Christmas.
After London had fallen sharply for the second day, bringing it perilously close to the 5,000 level, Wall Street rallied on news that the Federal Reserve, far from abandoning Wall Street to its fate as it had Lehman Brothers, was prepared to pump up to $85bn into troubled insurer AIG.
In return, it is replacing CEO Robert Willumstad with Edward Liddy, the former boss of insurer Allstate, and effectively taking control of 79.9% of the shares and the company's dividend and investment policy.
AIG, by some definitions still the world's biggest insurer, is bust in all but name.
It's holding a toxic hand of $441bn credit default swaps - insurance on iffy securities - and has had to stump up a further $18bn in collateral on these as its credit rating was savaged.
It didn't have this money of course, so the Fed felt it had to step in. The banks holding these securities would have taken a further huge hit if insurance cover had been removed and the Fed and Treasury secretary Hank Paulson weren't prepared to risk this.
At the same time the New York Federal Reserve (the Fed is made up of various regional bodies) lent JP Morgan $87bn to help it wind down outstanding Lehman Brothers trades.
This money could have gone to Lehman Brothers itself of course, but that wouldn't have sent out the right hardball message.
The Fed also wisely held interest rates at 2%. If rates fall lower than this there's the danger of recreating the situation the Japanese suffered through the 1990s when zero interest rates, introduced to help the banking sector, meant that nobody saved anything.
And the Japanese economy stagnated for a decade.
A final boost to the markets were figures from remaining investment bank giants Goldman Sachs and Morgan Stanley which came in slightly ahead of expectations.
So the morning after the night before wasn't quite as bad as people feared.
HBOS miseries mount
Not that Andy Hornby, CEO of Halifax Bank of Scotland would have been feeling at all sanguine this morning.
HBOS shares were hammered mercilessly again yesterday as investors fretted over its need to re-finance £100bn of its lending in the wholesale markets by the year end.
The interbank lending rate soared from 5.5% to 6.8% yesterday following the nightmare on Wall Street and, should this or a level close to it be maintained, HBOS earnings will take a savage hit.
The company is still the UK's biggest savings institution with £258bn in deposits, but that didn't stop a credit rating downgrade from Standard and Poors adding to Hornby's woes yesterday.
Now valued at a mere £9.6bn, HBOS is seen, unfairly, as just a bigger version of Northern Rock.
A bid from either or both of HSBC and Lloyds was doing the rounds yesterday, which helped the shares, which lost 40% earlier in the day, recover a bit.
They rose again in early trading today as financials led the FTSE 100 up following the AIG rescue.
But there would be relief all round if somebody did put the once mighty Halifax out of its misery.
Barclays swoops on Lehman nugget
Barclays Capital boss Bob Diamond finally managed to get a piece of Lehman Brothers yesterday, buying the bank's capital markets (stockbroking) division for $1.75bn.
Diamond had been interested in bidding for the whole thing, but was reined back by the rest of the board at the last minute.
Barclays Capital is the most profitable part of the bank but, in effect, Barclays really seems to be two banks, with Diamond running his bit and CEO John Varley the rest.
In another world (ie a year ago) investors would have been pressing for the bank to be split in two. However, no-one trusts investment bankers to rampage around on their own these days.
But the market (and the regulators) will be keeping a close eye on Barclays' fortunes as many fear there could be further big write-downs to come.
BAA to sell Gatwick
British Airports Authority has announced it wants to sell Gatwick airport for £1.8bn, getting its retaliation in first before the competition authorities confirm that it needs to sell two of its three London airports (it clearly isn't going to sell Heathrow so that means Stansted).
At first glance this looks a hell of a time to try to be selling an airport, but BAA's Spanish owner Ferrovial is heavily borrowed and the company, a builder originally, must be heavily exposed to the Spanish property crash.
This will interest, among others, Sir Richard Branson, still mired in misery after his failure to land Northern Rock.
Having his very own Virgin airport would be a fitting culmination to the career in aviation part of his life, although he won't want to give up his precious Heathrow slots.
Is it the endgame for Woollies?
Just a year short of its centenary in the UK, Woolworths is struggling to make the finishing line.
Today it announced that half-year losses had increased from £64m to £90m, although its DVD businesses had performed well.
In other words the shops are pretty much a lost cause.
Woollies depends almost exclusively on Christmas for retail revenue and it's possible that its cheap and cheerful offering will suit consumers this year.
New CEO Steve Johnson, from DIY retailer Focus, clearly has a big job on his hands, but it seems increasingly unlikely that he'll be given the time to do it.
But Woollies' collection of prime high street sites would suit the likes of rampant grocery discounters Aldi and Lidl perfectly, while Iceland's Malcolm Walker may come back with a second bid (that's if his Icelandic, yes, really, backers still have any money).
Woollies may well have a new owner by Christmas.
Stephen Foster is a former news editor of 北京赛车pk10, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog and Politics of the Media for Brand Republic.