The Fed has approved Goldman Sachs and Morgan Stanley’s requests to become bank holding companies. Bald and Co. also said that they will extend additional lending to the firm’s broker-dealer, in order “to provide increased liquidity support to these firms as they transition to managing their funding within a bank holding company structure.” Dealbreaker was additionally asked to pass on the message that if anyone from Goldman is reading right now and has any other demands– pizza,* rim job,** whatever– to get in touch, because if it wasn’t obvious already, no one says no to GS.
Here’s the Fed’s official statement:

The Federal Reserve Board on Sunday approved, pending a statutory five-day antitrust waiting period, the applications of Goldman Sachs and Morgan Stanley to become bank holding companies.
To provide increased liquidity support to these firms as they transition to managing their funding within a bank holding company structure, the Federal Reserve Board authorized the Federal Reserve Bank of New York to extend credit to the U.S. broker-dealer subsidiaries of Goldman Sachs and Morgan Stanley against all types of collateral that may be pledged at the Federal Reserve’s primary credit facility for depository institutions or at the existing Primary Dealer Credit Facility (PDCF); the Federal Reserve has also made these collateral arrangements available to the broker-dealer subsidiary of Merrill Lynch. In addition, the Board also authorized the Federal Reserve Bank of New York to extend credit to the London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley, and Merrill Lynch against collateral that would be eligible to be pledged at the PDCF.

And this is what Goldman had to say. Apparently the current state of the market merely pushed them in a direction they were already going:

“When Goldman Sachs was a private partnership, we made the decision to become a public company, recognizing the need for permanent capital to meet the demands of scale. While accelerated by market sentiment, our decision to be regulated by the Federal Reserve is based on the recognition that such regulation provides its members with full prudential supervision and access to permanent liquidity and funding,” said Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs. “We believe that Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources.”

Still waiting for Dick Fuld’s thoughts on the matter.
*See if you can guess who they’re going to make deliver it.
**To be administered by ____ ______?

We just received the following desperate plea and felt obligated to pass it on. If anyone reading can be of assistance, or knows someone who can be of assistance, please let us know, and we’ll put you in touch. If Dealbreaker readers can’t get this one done, no one can. For our (your) help, we’ve been promised a write-up of the event.

Dear Dealbreaker,
I have a situation I hope you can help me with. I’m a 25 year old girl from London visiting NY for the first time basically to hook up with this guy and I want to do something topical, specifically I want to have sex in the Lehman Brothers building before it gets sold or demolished or demolished or whatever. While I don’t want to make light of the tragic job losses etc, after so many people have been fucked by Lehman, I really want to fuck IN Lehman. We tried to get past security today (said we wanted to help our friend who was packing her stuff – this didn’t seem to surprise them) but they wanted an extension to call. We need someone who works at Lehman to answer their extension and say to the security desk that it’s cool for us to come in. I know it’s a big ask but it would fulfil a really big fantasy if you could help make this happen. Could any of your LEH readers help?
Many thanks,
[redacted]

via AP
Section 1. Short Title.
This Act may be cited as ____________________.
Sec. 2. Purchases of Mortgage-Related Assets.
(a) Authority to Purchase.-The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
(b) Necessary Actions.-The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and
(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.
Sec. 3. Considerations.
In exercising the authorities granted in this Act, the Secretary shall take into consideration means for-
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.
Sec. 4. Reports to Congress.
Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.
Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.
(a) Exercise of Rights.-The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.
(b) Management of Mortgage-Related Assets.-The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.
(c) Sale of Mortgage-Related Assets.-The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.
(d) Application of Sunset to Mortgage-Related Assets.-The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
Sec. 7. Funding.
For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
Sec. 11. Credit Reform.
The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.
Sec. 12. Definitions.
For purposes of this section, the following definitions shall apply:
(1) Mortgage-Related Assets.-The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.
(2) Secretary.-The term “Secretary” means the Secretary of the Treasury.
(3) United States.-The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.T

$$$ Gawker is holding an “Absurd Financial Product You Actually Bought.” Email your submissions! [Gawker]
$$$ Thoughts on the RTC [Business Week]
$$$ A Look At Wall Street From The Birthplace of American Government [WSF]
$$$ Inside Merrill’s Merger Agreement [Dealbook]
$$$ Someone would like credit for calling the SEC terrorists first. [TS]

You know what would go nicely with the week everyone (even GOLDMAN), at various points, got their faces ripped off? A gaudy, classless luxury car show to remind you of the toys you can probably no longer afford (though don’t let that stop you). We didn’t have the initiative to pull something like that together, but luckily someone else did. The Motorexpo started on Monday and has been going strong all week, over at the World Financial Center. And apparently on Tuesday the event planners held a “parade” from the Waldorf all the way down to the home of Merrill Lynch Bank of America, taking a detour to drive past Lehman Brothers, a sight we are deeply sorry to have missed. And even though most of you can only look and not touch, we figured everybody could use some JO&C material this afternoon. It’s pretty dark and grainy, but then again, most second-rate porn is.

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Nasdaq is breaking trades of certain stocks that were up huge on the open; and sending them back. Apparently too many idiots put market orders in the system to cover shorts given the new rules and we saw financials and other heavily shorted stocks rip. we must have made 20 trades that have been broken. Most trading desks at the brokerages are probably freaking out.

Update From The Nasdaq:

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The recent move by the Securities and Exchange Commission to temporarily ban short selling has left a lot of people very angry, extremely confused, and demanding a logical explanation for why this fakakta plan went through. We were as shocked as you to hear it actually went down, especially after we’d sent a note to Charles Christopher Cox advising him to dick slap Lloyd Blankfein and John Mack back to the corner with their dunce caps on, when they went crying to the SEC chairman because the market had served them one measly down day. At first we thought it was merely a misreading on C-Cubed’s part, seeing the word “suck” where we’d written “slap.” Now we know it was no mistake at all.
And it’s not that Cox and Co. are pussies easily bent to the will of the almighty Goldman Sachs. It’s that they’re suckers for the those four little words: “but it’s my birthday.” Yes, people, the reason for this Long-Only-Suction is that today is Lloyd Blankfein’s 54th b’day. And knowing that Cox couldn’t say no to a birthday wish, LB laid it on thick. “I never thought I’d be a mid-life crisis guy but I’m just really, super depressed about this one.” “I look at the first years and I’d give anything to trade places with those little shits.” “What’s the point of buying a convertible with no hair to billow in the wind?” He pulled out all the stops. The others were added to give the impression of not playing favorites. We were not fooled. And as a Well-Played, LB, Well-Played, indeed birthday gift, we’ll be sending something over to 85 Broad today. But our usual panty-gram or Geoffrey Raymond original doesn’t seem right for the occasion. If you can think of anything better, let us know.

I realize that he has bigger, more phallically-named fish to fry, but we were a bit disappointed to see the remarkably restrained and diplomatic letter sent from Ken Griffin to his clients yesterday regarding the pettiness that was JP Morgan’s decision to stop trading with hedge fund because many of its employees were peacing for Chi-town. Points for not actually denying the alleged poaching, but we’re still holding out hope that after he’s done riding sidecar on the Zamboni headed straight for Mr. Cox, he calls up gal-pal Daniel Loeb to help him craft a more robustly worded missive. For now, there’s only this:

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[Click to view]

Look how easy this shit is when you just throw the rules away!

$$$ AIG new chief meets his employees [Dealbook]
$$$ Bad Timing: The ‘Forbes 400′ List [City File]
$$$ Chelsea Clinton attends Lehman Bankruptcy Hearing [Deal Journal]
$$$ CVS [WallStrip]