The negotiators continue meeting, facing a deadline to act before Asian markets open for Monday morning trading.
But government officials insist there will be no federal backing of a Lehman rescue. With no help from Washington forthcoming, Barclays - the only possibility left after Bank of America leaves the table - withdraws.
Lehman is done for.
Meanwhile, Merrill Lynch CEO John Thain, seeing the writing on the wall, arranges the sale of his company to Bank of America for about $50 billion. In one day, the fates of two storied companies are sealed.
Image: The Bank of America in Washington, DC | Photograph: Karen Bleier/AFP/Getty Images
Also read: Buy, sell, or stay put? Advice from the pros
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