FINANCIAL TIMES: Lehman Brothers (LEH) is holding talks about selling all or part of Neuberger Berman, its asset management unit, sources said. The division is believed to be worth up to $10B. WALL STREET JOURNAL: General Dynamics (GD) has agreed to buy Jet Aviation for about $2.25B in cash. NEW YORK POST: Bill Ackman is not pleased with CVS Caremark’s (CVS) $71.50 per share bid for Longs Drug Stores (LDG), the Post reports. Ackman has hired Blackstone Group (BX) in an attempt to coax a higher bid from CVS, inside sources say. WALL STREET JOURNAL: Chrysler has sued Johnson Controls (JCI) for allegedly inflating the price of its batteries. The $15M lawsuit contends that Johnson Controls charged Chrysler for more lead than the batteries actually contained.

CME Group to buy the New York Mercantile Exchange for $8.4B-The Chicago Tribune
The CME Group (CME) recieved approval to buy the New York Mercantile Exchange for $8.4B, thus creating the world’s largest derivatives market. The Chicago Tribune reports, over 75% of Nymex members voted for the merger, ensuring that the deal supported by shareholders at both companies will go forward

A major U.S. bank could fail soon, former IMF official warns-UK Times
A large U.S. bank may fail within the next several months, according to Professor Kenneth Rogoff, a former International Monetary Fund chief economist. The credit crisis will get worse before it gets better, Rogoff added.

A major U.S. bank could fail soon, former IMF official warns-UK Times
A large U.S. bank may fail within the next several months, according to Professor Kenneth Rogoff, a former International Monetary Fund chief economist. The credit crisis will get worse before it gets better, Rogoff added.

Russia to pull out of Georgia’s city of Gori from just after 1100 GMT-Reuters

EA, Take-Two may be trying to make a deal-NY Post
Electronic Arts (ERTS) is hoping that its announcement that it will not continue trying to buy Take-Two Interactive (TTWO) will lower Take-Two’s share price, making Electronic Arts’ $25.74 per share bid look attractive to Take-Two investors, sources say. Meanwhile, Take-Two hopes its offer to allow Electronic Arts to conduct more due diligence will result in a higher bid from Electronic Arts, the sources add. On the other hand, a source with ties to Electronic Arts said the company does not want to negotiate with Take Two’s current management team.

Lehman’s moves: Bold or weakness?-WSJ
The thought of Lehman Brothers Holdings (LEH) selling a part of Neuberger Berman was recently viewed by outsiders as unnecessary. Not now. The firm is also said to more intensely be looking to move parts of its asset management business and of its commercial mortgage-related assets.The Wall Street Journal’s “Heard on the Street” doesn’t think all this will result in a happy ending. Are these moves intended to shore up the balance sheet? Or are they hunkering down for third quarter results which aren’t expected to be pretty? An overriding concern is that Lehman will be seen as desperately wanted to sell parts of itself, and that may keep buyers pressing for bargain prices.

U.S. equity futures now point to a lower open
Equity futures are pointing to a much lower open. There was news on inflation on the wholesale level, and home construction. The producer price index showed an increase of 1.2% for the month of July versus an expected increase of 0.6%. That brings the annualized rate to 9.8%. The housing starts came in at 965,000 versus an expected 960,000, and the building permits came in at 937,000 versus the expected 970,000. The futures dropped immediately after the numbers were released and are now pointing to a much lower open.

Musharraf is gone and Pakistani stocks surge-WSJ
Pakistan’s President Pervez Musharraf resigned and the country’s benchmark KSE-100 index jumped 4.5% to 10719.62, and its rupees moved up against the dollar, reports the Wall Street Journal. Analysts, however, say the poor economy will likely limit market gains.