A Lehman Brothers employee silhouetted against the window of the investment bank’s world headquarters in New York on Monday. (AP)

Sept. 15: The biggest financial pandemic since the Great Depression is roaring through America and many parts of the world.

Lehman Brothers and Merrill Lynch, the storied symbols of America’s money might and the career crown jewels that draw the best and the brightest from India, no longer exist the way they did till this weekend.

Lehman, the 158-year-old investment bank, is filing for bankruptcy; Merrill Lynch, the premier brokerage and Wall Street’s third largest bank, has agreed to be subsumed into Bank of America. Merrill, worth more than $100 billion last year, will sell itself to BankAm for $50 billion.

The bloodbath is not over yet. American International Group (AIG), one of the world’s largest insurance companies and an ally of the Tatas in India, has asked the US Federal Reserve for an emergency loan of $40 billion over the weekend, according to reports.

If the appeal is turned down, AIG may only have days to survive. Keen to avert another collapse, New York state officials have offered AIG a lifeline of $20 billion.

By the time Americans woke up on Monday morning, the face of Wall Street had changed forever.

“My goodness! I have been in business 35 years, and these are the most extraordinary events I have ever seen,” said Peter G. Peterson, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration. This is frightening as hell,” added Richard X. Bove, an analyst.

As the deepening crisis took new, bigger victims, the Federal Reserve — America’s monetary authority — said that for the first time it would accept stocks in exchange for cash loans, and 10 of the world’s top banks agreed to establish a $70-billion emergency fund. US stocks fell sharply across the board in early trading, but not as much as some expected, probably because of a fall in oil prices.

The humbling moves mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.

What will happen to Merrill’s 60,000 employees or Lehman’s 25,000 remains unclear but analysts expect some job losses. The ripples are expected to touch India’s premier business schools, too.

Lehman said it had filed for bankruptcy protection, becoming Wall Street’s highest-profile casualty since junk bond specialist Drexel Burnham Lambert succumbed in 1990.

The bankruptcy filing by Lehman puts an end to a firm that began as a cotton trader in 1850 and endured several near-death blows over the years. Lehman was known as a gritty overachiever, which it displayed when its headquarters across the street from the World Trade Center was badly damaged in the September 2001 terrorist attacks. For weeks, the company operated out of hotel rooms around the city.

Ajeya Singh, the Prince of Manda and son of former Prime Minister V.P. Singh, was India head of Lehman Brothers till 1999, when the company shut shop in the country. Lehman later made a re-entry into India.

BankAm’s acquisition of Merrill creates America’s biggest bank by far but ends the 94-year independence of a Wall Street legend. BankAm plans to keep the Merrill name for the retail brokerage.

Bank of America was seeking a bargain, and the world’s largest retail brokerage, known as The Thundering Herd, was seeking refuge from fears it could be the next victim.

With the US government refusing to bail out in an election year, the events signal a seismic shift in Wall Street’s power structure. Big-name investment banks are biting the dust and major banks like Bank of America and JPMorgan Chase are becoming the survivors. “It’s a return to pure capitalism, the survival of the fittest — the government can’t and won’t bail everybody out,” said Justin Urquhart Stewart, an investment analyst.