[BRIEFING.COM] The stock market surges near session highs as a CNBC reporter says the government may be planning to solve the current financial turmoil using a method similar to the 1980s savings and loan crisis.

CNBC's Gasparino reports his Wall Street sources say that Treasury Secretary Paulson is talking about a Resolution Trust Corporation-type solution to the current crisis.  The RTC was created during the savings and loan crisis of the 80s.

Financials as a whole are providing leadership with a 6.3% gain.  Diversified banks (+10.4%) and thrifts & mortgage (+7.9%) stocks are rallying, although there is weakness in investment banks (-10.0%) and asset management (-13.8%) firms.

The consolidation of financial firms and government intervention is not happening just in the United States. U.K. banking giant Lloyds TSB Group (LYG 21.03, +1.92) announced this morning that it is acquiring struggling U.K. mortgage lender HBOS in an all-stock deal valued at 12.2 billion pounds ($22.2 billion). The U.K. government brokered the deal, and is overriding anti-monopoly regulations, according to reports.

Announced earlier today, Kraft (KFT 33.59, +0.94) will become a Dow component effective Monday, replacing AIG (AIG 2.26, +0.21).  The move comes after AIG nearly collapsed, requiring an emergency $85 billion loan from the Fed.  Shares of AIG have fallen 97% from their 52-week high.