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U.S. Government to Arrange Sale of Lehman Brothers
Washington Post ^

Posted on 09/11/2008 2:36:55 PM PDT by milestogo

U.S. Government to Arrange Sale of Lehman Brothers

By David Cho and Heather Landy Washington Post Staff Writers Thursday, September 11, 2008; 5:30 PM

The Treasury Department and the Federal Reserve are engineering a sale of Lehman Brothers through a consortium of private firms. The details are not finalized, but sources familiar with the matter say the purchase is expected to be completed and announced this weekend before Asian markets open Monday morning.

Lehman Brothers, which had been anxious to show it could weather the credit crisis that contributed to the firm's $3.9 billion third-quarter loss, said Wednesday that it would sell a majority stake in its investment-management division, slash its dividend and spin off about $30 billion of real estate assets.

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Breaking News; Business/Economy
KEYWORDS: bailouts; banks; failure; govwatch; lehmanbrothers; treasury; wallstreet
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1 posted on 09/11/2008 2:36:55 PM PDT by milestogo
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To: milestogo

I’ve said it before, and I’ll say it again: President Bush will get *all* of the bad news out into the Public purview before he leaves Office, so as to give his successor an easier job.


2 posted on 09/11/2008 2:39:20 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: milestogo
A bailout a week!

ML/NJ

3 posted on 09/11/2008 2:39:40 PM PDT by ml/nj
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To: milestogo

Hey, it’s only money!


4 posted on 09/11/2008 2:39:56 PM PDT by GOPGuide
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To: TigerLikesRooster

And it’s not even FDIC Friday yet!


5 posted on 09/11/2008 2:41:15 PM PDT by rabscuttle385
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To: TigerLikesRooster; ex-Texan

ping


6 posted on 09/11/2008 2:43:37 PM PDT by Travis McGee (--- www.EnemiesForeignAndDomestic.com ---)
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To: milestogo
What a Country! Bear Stearns and Lehman Brothers can fail and the American Tax Payer will bail them out.

Too bad the Federal Government is not there to bail is all our of our bad investments.

Only the chosen few have that privilege.

7 posted on 09/11/2008 2:45:01 PM PDT by trumandogz
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To: milestogo

This is bullsht


8 posted on 09/11/2008 2:46:24 PM PDT by omega4179 ("John McCain has not... talked about... My muslim faith")
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To: milestogo

Call me a pollyanna, but I hope that this is not true. That said, if it DOES happen, I hope the private companies don’t get and federal dollars.

I guess I AM a pollyanna!!!


9 posted on 09/11/2008 2:48:42 PM PDT by jdsteel (Palin has more experience, and class, than Obama)
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To: milestogo

Someone fill me in here — why is the gubmint involved?


10 posted on 09/11/2008 2:52:20 PM PDT by durasell (!)
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To: jdsteel
Yup ... no doubt ... you are ;).
11 posted on 09/11/2008 2:53:06 PM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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To: durasell
It's not our gubmint anymore. We sold it.
12 posted on 09/11/2008 2:55:14 PM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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To: durasell
Someone fill me in here — why is the gubmint involved?

It's for the good of everyone, comrade

13 posted on 09/11/2008 2:56:18 PM PDT by paul51 (11 September 2001 - Never forget)
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To: ThePythonicCow

Seriously — the firm is comprised of very, very smart guys who are more than capable of doing a deal.

So, why is the gubmint involved in this?


14 posted on 09/11/2008 2:56:47 PM PDT by durasell (!)
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To: milestogo

“Lehman Brothers, which had been anxious to show it could weather the credit crisis that contributed to the firm’s $3.9 billion third-quarter loss, said Wednesday that it would sell a majority stake in its investment-management division, slash its dividend and spin off about $30 billion of real estate assets.”

The money line. They thought they could hang on long enough to get bailed out, $3.9 billion loss? who beside the government is going to buy a majority share?, slash its dividend after losing $3.9 billion? What dividend? “spin off”? sounds like a fire sale to the feds.


15 posted on 09/11/2008 3:00:24 PM PDT by count-your-change (you don't have to be brilliant, not being stupid is enough.)
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To: milestogo

Washington Post has changed the headline and opening to the story:

U.S. Government Assisting in Sale of Lehman Brothers

The Treasury Department and the Federal Reserve are helping Lehman Brothers put itself up for sale. The details are not finalized, but sources familiar with the matter say the purchase is expected to be completed and announced this weekend before Asian markets open Monday morning.

The Fed and Treasury are talking to a wide range of firms and examining multiple scenarios for the sale of the venerable investment brokerage.


16 posted on 09/11/2008 3:02:39 PM PDT by jimbo123
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To: count-your-change

They’re gonna have to rent Madison Square Garden to hold all the lawyers and accountants involved....


17 posted on 09/11/2008 3:02:49 PM PDT by durasell (!)
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To: milestogo

My guess is the Treasury and Fed must be offering some guarantees like they did with Bear Sterns.


18 posted on 09/11/2008 3:04:58 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Southack

Not that I think the Feds should take over Lehman, but if they arrainge a “Bear STearns like” sale, that would not be too bad. Shareholders/employees of Bear got hit pretty hard, not much of a bailout. On Jan 1, Bear stock was at $85, June 2nd, sold for $10. The Federal Reserve did take on more risk to hold risky assets, but Bear is now owned by JP Morgan, not the US govt.


19 posted on 09/11/2008 3:05:49 PM PDT by fightin bronco (If you counted on America remaining passive...you counted wrong)
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To: durasell
So, why is the gubmint involved in this?

Probably because they don't see financial collapse and widespread deprivation as a solution to the problem.

20 posted on 09/11/2008 3:07:05 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Moonman62

Same guarantees deal with Bear Stearns that was given to JP Morgan Chase. Bank of America might be the acquirer of Lehman.


21 posted on 09/11/2008 3:07:44 PM PDT by jimbo123
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To: Moonman62

So, let me run this by you: The gubmint greases the skids for the sale to say, Citi, with the regulators etc. on-site during negotiations to do the deal quick. However, if the gubmint wasn’t involved, Citi would do a slow negotiation waltz while the firm imploded.


22 posted on 09/11/2008 3:10:29 PM PDT by durasell (!)
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To: Southack

President Bush will get *all* of the bad news out

This is not driven by W.
This is completely market driven.
He and his people can only react.


23 posted on 09/11/2008 3:15:09 PM PDT by ConservativeGreek
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To: milestogo

New York is toast as the world’s financial capital. They just don’t know it yet. London and Dubai are the new centers of finance.


24 posted on 09/11/2008 3:22:15 PM PDT by montag813 (www.BoycottUsWeekly.com | Fight the Smears | Fight the Sexism)
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To: durasell
Someone fill me in here — why is the gubmint involved?

The gubmint gots the printing machines.....

25 posted on 09/11/2008 3:22:47 PM PDT by Fox_Mulder77
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To: montag813

Stuff it. America/NY will prevail.

(apologies for the “stuff it,” but it’s a sensitive topic for me)


26 posted on 09/11/2008 3:24:10 PM PDT by durasell (!)
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To: Moonman62

“Probably because they don’t see financial collapse and widespread deprivation as a solution to the problem.”

Yes, the government always knows how to pick the best solution to the problem.

If you think that government-based/brokered/sponsored solutions will stop a financial collapse brought on by failed government policy over many years, then you are much more of an optimist than I.

This intervention will only make it worse. The reaper cometh and even the Fed and Treasury can’t stop it.


27 posted on 09/11/2008 3:29:02 PM PDT by RFEngineer
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To: durasell

The firm is comprised of guys who were told they are very, very smart and think that. They are incapable of doing a deal.

Fixed it for you’


28 posted on 09/11/2008 3:29:54 PM PDT by razorback-bert (Save the planet...it is the only known one with beer!)
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To: milestogo
We are a huge Socialist Nation.

No doubt about it.

29 posted on 09/11/2008 3:31:12 PM PDT by Afronaut (It's 1984)
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To: omega4179
This is bullsht

No, it is Corporate Socialism.

30 posted on 09/11/2008 3:32:14 PM PDT by trumandogz
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To: Afronaut

Yes, you can fail in your business and your investments but the American Tax Payer is there to bail out the Big Finance Houses when they make bad investments and fail.

The only thing you can do is smile when you write the check to the IRS and laugh as you watch the dollar devalue.


31 posted on 09/11/2008 3:34:42 PM PDT by trumandogz
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To: durasell

I think the real problem is that no financial institution wants to take on any additional risk in this environment, regardless of the value or the potential gain.


32 posted on 09/11/2008 3:36:37 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: RFEngineer

I think the government is being nudged into this by the private sector, and the Fed is probably a willing participant. However, my impression of W is that he could care less about the financial markets and Paulson is his puppet.


33 posted on 09/11/2008 3:38:45 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Moonman62

Citi has a ton of Saudi petro-dollars behind it. Bank of America is chewing on the Countrywide deal.

Any which way you want to slice or dice it, it’s incredibly bad news for NYC. Thousands of folks will no doubt be told to “hit the bricks.”


34 posted on 09/11/2008 3:39:16 PM PDT by durasell (!)
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To: Moonman62

“I think the government is being nudged into this by the private sector, and the Fed is probably a willing participant.”

Ya think? This is another opaque bailout. We’ll never know how it was decided to make this move.

It’s easy to figure out how it works. The Fed says “how much do I have to pay you to buy Lehman?”. The sellers get paid, the buyers get paid, and members of the Fed get goodwill consideration for a job when they retire from government, or worse, an under-the-table quid pro quo.

It’s going to make it worse - but it will make it worse for folks other than the bailed out Lehman brothers folks......and that’s the objective.


35 posted on 09/11/2008 3:45:22 PM PDT by RFEngineer
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To: RFEngineer

The Lehman Bros. folks are toast. This is a deal intended to protect assets and not people.


36 posted on 09/11/2008 3:48:32 PM PDT by durasell (!)
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To: durasell
No -- they couldn't.

No one, other than the U.S. Treasury, has the billions of "spare" dollars that it will take to grease the wheels for this deal. Just as JPMorgan got some $30 to $50 billion to close the deal with Bear Stearns, similarly it will take serious money to close this deal.

The banks and countries with the spare tens of billions sitting around who could handle a deal like this are way too risk adverse these days to consider such a deal, on any sort of terms that one could get without some Treasury money "facilitating" it.

37 posted on 09/11/2008 4:02:16 PM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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To: montag813
"London and Dubai are the new centers of finance."

LOL! Dubai's debt problems dwarf our own.

38 posted on 09/11/2008 4:06:20 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: durasell
Something like that, similarly to JPMorgan's takeover of Bear Stearns, seems reasonable to me too. The Treasury can kill two birds with one stone this way. If the gaining company, say Citi, was also at high risk of failure, then the Treasury can structure the deal so that Citi comes out ahead (and you and I come out short, again, but we knew that ;).
39 posted on 09/11/2008 4:06:56 PM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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To: trumandogz

either way it smells. I hope President McCain will put his foot down.


40 posted on 09/11/2008 4:21:30 PM PDT by omega4179 ("John McCain has not... talked about... My muslim faith")
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To: trumandogz

Where were they in 2000 with my tech holdings?

This is ridiculous. The least “needy” people get bailed out each time. The only solution is quite simple: NO BAILOUTS.


41 posted on 09/11/2008 5:07:14 PM PDT by Red in Blue PA (Now you know why the needles on compasses point north - Sarah Palin.)
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To: rabscuttle385; Travis McGee
Well, I wonder if KDB, the S. Korean bank pursued by Lehman, joined the consortium of private firms.
42 posted on 09/11/2008 6:52:58 PM PDT by TigerLikesRooster (kim jong-il, chia head, ppogri, In Grim Reaper we trust)
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To: fightin bronco

As a LEH stockholder, I am taking a beating on a once great company and stock. It was over $80 last year, now ... $4. Ug.. I owned it from mid-1990s when they built up a great franchise.

The fall has been swift. Whoever gets their assets will get a great deal.


43 posted on 09/11/2008 8:27:23 PM PDT by WOSG (McCain/Palin 08)
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To: trumandogz

“Yes, you can fail in your business and your investments but the American Tax Payer is there to bail out the Big Finance Houses when they make bad investments and fail.”

As a Lehman stockholder, I can assure you, I am not getting bailed out!


44 posted on 09/11/2008 8:28:44 PM PDT by WOSG (McCain/Palin 08)
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To: milestogo

The government bails out Fannie Mae, Freddie Mac and Lehman Brothers...with taxpayer money.

Are these people going to give back their millions of dollars in bonuses? Jamie Gorelick made 26 million at Fannie Mae. Johnson made similar millions. All the while they cooked the books to make sure they got their bonuses. And the taxpayers now pick up the pieces.


45 posted on 09/11/2008 8:37:46 PM PDT by ladyjane
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To: milestogo

Apparently there is no end to welfare. Corporate welfare, private welfare.

Let this be a lesson to everyone here...start a company, take as much risk as you want....as long as you become big enough the Gubmint will be there to bail you out.

Why manage risk at all? Your government will be there to sell you to the Saudis.


46 posted on 09/11/2008 9:00:12 PM PDT by Eric Blair 2084 (Alcohol, Tobacco and Firearms shouldn't be a federal agency...it should be a convenience store.)
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To: ladyjane; All

Hold your horses people. The G’ment will make money on the Bear Stearns deal, and, if they do the same type of thing here, they’ll most likely make money on this deal too. Way too much jumping of the ‘bailout with taxpayer money’ gun here. Not a dime of taxpayer money was actually spent, nor was a single shareholder bailed out (ie, prevented from loosing their shirt). I’d get the hard facts first before yelling ‘taxpayer getting soaked for fat cats’ and ‘corporate socialism’.


47 posted on 09/11/2008 9:08:20 PM PDT by farlander (Try not to wear milk bone underwear - it's a dog eat dog financial world)
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To: trumandogz
Too bad the Federal Government is not there to bail is all our of our bad investments.

How did investors in Bear Stearns get bailed out?

How will investors in Lehman get bailed out?

48 posted on 09/11/2008 9:21:25 PM PDT by Toddsterpatriot (Let me apologize to begin with, let me apologize for what I’m about to say....)
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To: durasell
So, why is the gubmint involved in this?

Why was the gubmint involved with LTCM? How much did that one cost you?

49 posted on 09/11/2008 9:22:37 PM PDT by Toddsterpatriot (Let me apologize to begin with, let me apologize for what I’m about to say....)
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To: Toddsterpatriot

I don’t know why you bother. Thanks for trying, though.

I don’t think these folks understand who is being “bailed out” and who is losing everything. Hint: if everything you’ve invested in a company disappears, you’re not being “bailed out” out of anything.


50 posted on 09/11/2008 9:31:54 PM PDT by VegasCowboy ("...he wore his gun outside his pants, for all the honest world to feel.")
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