Posted on 09/14/2008 1:32:04 PM PDT by kcvl
ON THE BRINK... BARCLAYS Abandons Talks... Feds Balk at putting up taxpayer money...
(Excerpt) Read more at drudgereport.com ...
One option discussed would be to have major banks and brokerage firms agree to do business with Lehman even as the 158-year-old firm, staggered by massive losses, liquidates itself. Another option — a daring rescue encouraged by nervous regulators — would be for a consortium of banks to provide financial backing for a sale of the firm.
U.S. government officials were adamant that no public money be used — a big point of contention, because many of the top Wall Street executives believe that their banks, which have each written down tens of billions of dollars in assets, do not have the capacity to lead the rescue on their own.
http://www.iht.com/articles/2008/09/14/business/14lehman.php
Let it die.
Anybody taking bets or know the odds if the Fed is gonna save the day for Lehman’s?
Sounds like the big Business Socialists arent happy w the government for not bailing out Lehman
The best thing for our economy, long term, is to let these companies go under...instead of bailing them out.
It’s cheaper to fix the problem now, than it will be to fix it later.
As are a few of the socialists that post here.
I remember, in ancient mythology, tales involving giant ocean whirlpools that would such everything on the surface of the sea deep into the ocean’s abyss. Of course the hero, who barely escapes, goes on to further adventures before returning safely home.
How aprapos that myth seems here. This whirlpool, named Lehman Brothers, may just drown the United State’s economy. The question is, for how long before rising out of a watery grave? Of course it can be resusicated in the future, but how soon? It sure as hell isn’t going to be before the November elections!
Fed and Treasury are saying "Not this time".
This week is gonna be really big on the Street. Lots of new Economic data coming out.
* Industrial production (Aug. 2008): Monday 9:15 AM
* Consumer price index (Aug. 2008): Tuesday 8:30 AM
* NAHB housing market index (Sep. 2008): Tuesday 1:00 PM
* FOMC interest rate decision (Sep. 2008): Tuesday 2:15 PM
* Housing starts (Aug. 2008): Wednesday 8:30 AM
* Leading economic indicators index (Aug. 2008): Thursday 10:00 AM
What the hell, we prolly spent more money on Katrina victims.
That is an apt analogy, because both the Katrina victims and the investment bankers are as much victims of their own stupidity as of circumstances. But, you have to draw the line somewhere.
The government doesn't bail out losers in casinos, do they?
Lehman which employs 4,000 staff in London and 24,00 around the world, could be placed into liquidation as soon as Monday. The bank would be the single largest casualty of the current credit crisis and its collapse one of the biggest failures in Wall Street history
Lehman is understood to have appointed Wall Street law firm Weil Gotshal & Manges to work on preparing a potential bankruptcy filing in the event that a solution can not be found.
Other banks, including Washington Mutual and Merrill Lynch, have also come under intense scrutiny in recent days as Lehman moved closer to collapse.
The race to save Lehman took a turn for the worse this evening after Barclays told Mr Geithner and US Treasury Secretary Hank Paulson that it was unwilling to proceed with a deal.
I'm sure you'd still say that if it were a big chunk of your own personal funds being thrown at the POS.
As Lehman Brothers scrambled to find a buyer, concerns are mounting that a deal may involve government money and place too much of a burden on already strained taxpayers.
Treasury Secretary Henry Paulson reportedly was “adamant” that no government money would be involved in any deal for Lehman Brothers, but potential buyers were reported to be looking for a backstop similar to the $29 billion cushion against potential losses the Federal Reserve gave to JPMorgan Chase when it bought Bear Stearns earlier this year.
Thanks for that — really. A very insightful thing to post.
“”Anybody taking bets or know the odds if the Fed is gonna save the day for Lehman’s?”
Fed and Treasury are saying “Not this time”. “
Exactly! Because they’re getting ready to say “yes” to bailing out the big 3 auto makers instead.
Barclays Walks from Lehman Deal;
Likelihood for Transaction Narrows
By CARRICK MOLLENKAMP, MATTHEW KARNITSCHNIG and SERENA NG
September 14, 2008 4:57 p.m.
The fate of Lehman Brothers Holdings Inc.’s darkened early Sunday afternoon after Barclays PLC, the sole remaining bidder for the 158-year-old Wall Street firm, told federal regulators that it is walking away from a transaction, people familiar with the matter say.
With Barclays ending talks and the government balking at putting any taxpayer money at risk for Lehman, the likelihood of a transaction was dimming. That would leave an orderly liquidation as the most likely scenario, a dramatic outcome for a once-powerful firm.
In a statement on Sunday, the International Swaps and Derivatives Association, a trade group whose members include many large dealers, said a “netting trading session” will take place between 2 p.m. and 4 p.m. on Sunday to allow Lehman’s counterparties to offset their positions against each other.
“The purpose of this session is to reduce risk associated with a potential Lehman Brothers Holdings Inc. bankruptcy filing,” it said, adding that trades conducted during this period “are contingent on a bankruptcy filing on or before 11.59 p.m. New York time” today. If no filing takes place, the trades will be canceled, ISDA said.
Richard S Fuld Jr, Lehman Brothers CEO
Total Compensation
$71.90 mil
5-Year Compensation Total
$354.03 mil
Richard S Fuld Jr has been CEO of Lehman Bros Holdings ( LEH) for 15 years. Mr. Fuld Jr has been with the company for 39 years, 62 year old
Stock owned: $436.8 mil
Richard Fuld, Lehman’s chief executive, is a smart-dressed tough guy with a hot temper, who attended business school at night in New York and then rose to the top at Lehman by intimidating everyone and wresting power through acts of sheer will.
Mr Fuld is now the longest-serving chief executive on Wall Street, having just surpassed Mr Cayne’s tenure of 15 years. Both received eight-figure annual compensation and became paper billionaires, temporarily. also became progressively autocratic. When the subprime crisis began, were temporarily missing in action and ultimately turned on their seconds-in-command, who best understood the financial instruments that destroyed their firms. ignored early warnings about derivatives and stuck to outdated business models. have suffered legacy-destroying reputational damage.
when questions arose about Lehman’s subprime exposure, Mr Fuld was away in India and did not appear in public. Instead of responding directly to claims that Lehman was overvalued, he tasked Erin Callan, Lehman’s chief financial officer, to reassure investors. When commentators criticised Ms Callan’s responses, he abruptly demoted her. He also removed Joe Gregory, his right-hand man of three decades, a friend Mr Fuld previously had insisted would succeed him.
In April 2008, Mr Fuld boldly proclaimed that the worst of the credit crisis had passed. Then, at the bank’s annual meeting, he blamed short sellers for Lehman’s declining share price and vowed: “I will hurt the shorts, and that is my goal.” He has remained out of touch since then. During a conference call with investors last week, when he should have explained detailed plans to liquidate key assets, Mr Fuld focused on how “employees of this firm are holding wonderfully”, as evidenced by the lack of abnormal employee turnover. Mr Fuld did not discuss the fact that many of these people soon will be unemployed.
Should be interesting! Both Jamie Dimon of JP Morgan and Richard Fuld are on the Board of Directors of the Federal Reserve Bank of New York.
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