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 ...
Same guarantees deal with Bear Stearns that was given to JP Morgan Chase. Bank of America might be the acquirer of Lehman.
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.
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.
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.
The gubmint gots the printing machines.....
Stuff it. America/NY will prevail.
(apologies for the “stuff it,” but it’s a sensitive topic for me)
“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.
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’
No doubt about it.
No, it is Corporate Socialism.
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.
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.
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.
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.”
“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.
The Lehman Bros. folks are toast. This is a deal intended to protect assets and not people.
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.
LOL! Dubai's debt problems dwarf our own.
either way it smells. I hope President McCain will put his foot down.
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