• An analyst suggests Lehman may be a hostile takeover candidate; a WSJ reporter explains why that's unlikely; and another points out the difficulty involved in selling off its asset management business. [NYP, WSJ, WSJ]

• Phil Falcone's Harbinger Capital Partners has taken a 4.9 percent stake in Cablevision. [NYP]

• Morgan Stanley has offered to buy back about $4.5 billion in auction-rate securities from clients, following a similar offer by Merrill Lynch last week. The move came after Attorney General Andrew Cuomo's office sent out another round of letters to banks, including Morgan Stanley, JPMorgan Chase, and Wachovia. [Bloomberg, WSJ]

• The bill for the auction-rate securities mess is now adding up by the hour. Merrill Lynch, Citigroup, UBS, and Morgan Stanley have all contributed to to the tally. [Dealbook]

• Merrill CEO John Thain is responding to critics and disputing "notions that he misled investors about his intentions to raise capital." [NYT]
  

• The market turmoil hasn't hurt Bruce Wasserstein. Lazard reported a 5 percent gain in profits during the second quarter. [Dealbook]

• Merrill Lynch has announced it will take another write-down of $5.7 billion and raise an additional $8.5 billion in new common stock. The bank has announced more than $45 billion in write-downs over the past year. [NYT]

• Dick Fuld's Lehman Bros is considering selling Neuberger Berman for as much as $8 billion. [Reuters]

Terribly disappointing news today for senior managing directors at Merrill Lynch: They will now need permission to hop aboard one of the company jets. (One of Merrill's Gulfstreams is at left; the full-size is here). It seems the struggling bank has realized that it might save a couple of bucks if bankers weren't commandeering a 12-seater every time they had to, say, go to Philadelphia for a meeting. So now senior execs will not only have to get permission from the global head of investment banking, they'll also have to "demonstrate there is no more efficient means of transport." Headed to Boston? We hear the Fung Wah is pretty efficient! [FT]

• Merrill Lynch's $4.65 billion second-quarter loss was almost twice what analysts had predicted; the firm also wrote down an additional $9.5 billion in connection with subprime losses. [Bloomberg]

• JPMorgan announced that profits fell 52% due to write-downs, slightly less than the Street expected. [Bloomberg]

Merrill Lynch, under financial pressure, is selling one of its more valuable assets, a 20 percent stake in Bloomberg, the financial-information business, for $4.5 billion to $5 billion. The sale marks the business's value at $22 billion to $25 billion — four times or more what Rupert Murdoch paid to tuck the Wall Street Journal's publisher, Dow Jones, a far more prestigious name in business news, into News Corp. Under Murdoch's ownership, Journal staffers are groaning about new expectations for productivity. Several highly paid, but not highly prolific, writers have been laid off, including George Anders, one of the biggest names in technology reporting. Join the club, Bloomberg writers would say; they are constantly measured, and perpetually disgruntled. What Bloomberg's high valuation tells us: Expectations of productivity in the news business are here to stay. Prestige and quality are well enough — but only if they make a noticeable difference. Being read matters just as much as being right.

John Thain is about to free up a bit more capital for beleaguered Merrill Lynch: According to the Times, Merrill will sell its stake in Bloomberg L.P. "for about $4.5 billion, people briefed on the matter said Wednesday afternoon." [NYT]

• The Weather Channel was sold by Landmark Communications to NBC Universal, Bain Capital, and Blackstone for just under $3.5 billion. [NYT]

• As expected, Lehman announced it will pay more of employees' compensation in stock this year; the bank also granted a mid-year equity bonus on July 1st. [Reuters]

• An upgrade from Morgan Stanley is expected to help out Lehman's stock price, which fell 11 percent yesterday amid talk of a firesale. [Reuters]

• Indian steel tycoon Lakshmi Mittal is joining Goldman Sachs' board. [Bloomberg]

CNBC's Charlie Gasparino just reported that a Merrill Lynch fixed income research employee, outraged at not receiving a bonus, shit all over the floor. A Merrill Lynch spokesperson claims it was merely "an accident in one of the stalls," though Dealbreaker has a slightly different and more terrifying verion of the story: "The way we first heard it is that a guy took a dump in the rest room, stomped in it, and then dragged it all over the place by walking around with it on his shoes." So it is the Wall Streeters doing that to our bar bathrooms every weekend. More gossipy, disgusting details welcome. [DealBreaker]

Merry Christmas, Merrill Lynch! Now a bit less than 10% of the bank will be owned by the Singapore government, in exchange for $4.4 billion. [NYT]

Andrew Cuomo, gradually moving up in the world from "not his father" to "not Eliot Spitzer", has subpoenaed Merrill Lynch, Morgan Stanley, Bear Stearns, Lehman Brothers and Deutsche Bank in his crusading subprime mortgage investigation. And now Merrill Lynch is predicting "an almost unremittingly gloomy forecast for the US economy next year." It's all your fault, deadbeat consumers! You made them lend to you! [NYT, Telegraph]