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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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To: Toddsterpatriot

I believe the gubmint turned a slight profit on LTCM...


51 posted on 09/11/2008 10:02:32 PM PDT by durasell (!)
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To: farlander

Not the point. The point is this: does gubmint involvement signal a crisis of the type private companies cannot work out for themselves?


52 posted on 09/11/2008 10:04:27 PM PDT by durasell (!)
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To: VegasCowboy
I don’t know why you bother. Thanks for trying, though.

I'm a glutton for punishment.

53 posted on 09/11/2008 10:07:07 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
I believe the gubmint turned a slight profit on LTCM...

That would be a neat trick, considering the government didn't spend a dollar helping LTCM.

54 posted on 09/11/2008 10:08:02 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: milestogo
How much OE written off on this one

anyone know?

bet they are selling foreign like UBS and others have

this housing market boom turns bust and subsequent loan bundling exposure collapse has turned into a bonanza for foreign firms to pick up huge pieces of the US and US exposed financial services industry on the cheap with a weak dollar.

i don't recall anything like this before except when the Japs bought up chunks of real estate after the Carter recession

i had a BBQ lunch with a banker today on some commercial mortgage stuff....he said his bank wished they were US Bank, they had no bundling exposure

so many banks and firms going cheap but so few acquirers(sic)fat with cash domestically

those Lehmans shoulda stayed in Montgomery I tell ya...and the damned Shulzbergers in Knoxville while we're at it

55 posted on 09/11/2008 10:18:12 PM PDT by wardaddy (Obama/Pol Pot 2008)
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To: montag813
London and Dubai are benefiting from low dollar and Dubai from record crude

but, it's a cycle you know that

this huge housing boom had to play out and those caught with their britches down are geting slammed

i’m ambivalent on the government arranged sale stuff

BSCO and this one I have more pause than I do with Fannie and Freddie since they were already sorta like TVA of lending

but all the folks responsible should lose it all just like you or I would

this is complex stuff....the ramifications are more heady than just let em burn...

I really don't have the answers but I imagine most governments would make a deal to make the collapse of a giant more cushioned

first one I recall we bailed out when I was in college was Franklin National back in 1974..had we bailed out many before that?

bailing out simply means sorta that depositers get protected and capital holders lose it all...more or less bank wise

not sure how it works on mortgage companies , i would assume with investment and brokerage institutions it means the cash security accounts are backed up but the OE is wiped out.

I'm open to education here...

56 posted on 09/11/2008 10:28:22 PM PDT by wardaddy (Obama/Pol Pot 2008)
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To: trumandogz

>>No, it is Corporate Socialism.

Just a new variant of Collectivism.


57 posted on 09/11/2008 10:28:59 PM PDT by LomanBill (A bird flies because the right wing opposes the left.)
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To: milestogo

U.S. Treasury printing presses running 24/7.

U.S. Taxpayers deeply saddened.

U.S. Dollar in the trash can.

Lehman Brothers executives expecting rich severance checks.

What’s wrong with this picture?


58 posted on 09/11/2008 10:29:04 PM PDT by Deo volente
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To: Deo volente
U.S. Treasury printing presses running 24/7.

Show me.

U.S. Dollar in the trash can.

Up 12.5% against the Euro, since July.

What’s wrong with this picture?

I blame the public schools.

59 posted on 09/11/2008 10:40:45 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: omega4179

Agreed. Lehman has to serious problems, but isn’t ready to collapse this weekend.


60 posted on 09/11/2008 11:08:30 PM PDT by Proud_USA_Republican (We're going to take things away from you on behalf of the common good. - Hillary Clinton)
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To: montag813

Puhleaze. The UK finance industry is in way worse shape than wall street is, and Dubai’s claim to fame is the new center of the universe for money laundering and arabs with more money than brains throwing money at anything that dazzles the eye.


61 posted on 09/11/2008 11:17:56 PM PDT by Proud_USA_Republican (We're going to take things away from you on behalf of the common good. - Hillary Clinton)
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To: Moonman62
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.

And therein lies the problem, it's a very risky market and the nation can't risk it grinding to a halt, or addressing that even more acutely, CAN'T AFFORD IT. We owe so much ***Damn money that if our economy takes a hit we can't meet even our interest payments on the debt. Therefore these moves by the Federal Government are in the interests of National Security, such as it is.

We may not like it, but our government has cocked us up so badly this is our reality. Until WE replace the useless money grubbers, spending yours and mine before even WE make it, the situation will only get worse. We are at the end of the rainbow and the idiots in Washington DC just found out the pot is empty.

62 posted on 09/11/2008 11:32:07 PM PDT by CBF (It's the law stupid!)
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To: Toddsterpatriot
Weren't these the same investment banks that only 18 months ago were all over the news with their partners enjoying the largest bonuses ever paid out in the history of business?? Hell, Financial Papers were giddy with that fact that even associates were getting 5 million in bonuses and buying fancy horse ranches and Ferrari's. The partners were way up in the double digits. The press was gushing, we should all be so smart and impressive!

I say, let the market correct itself, and if these guys still have shares, make them pony up - these are partnerships as well, that means these guys have a capital responsibility. Talk about FORECLOSURE - Let's start with they're second beach houses.

When my business crashed and burned, not billions, but certainly millions, I was stuck holding the bill. Still fighting the problems 2 years after the fact. Where was the government then?? Didn't bail my ass out! Guess I didn't pay enough graft to the guys in congress. Shame on me.

63 posted on 09/11/2008 11:38:48 PM PDT by CBF (It's the law stupid!)
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To: VegasCowboy; Toddsterpatriot

Amazing how many people are using the word “bailout” without understanding of what’s going on, or as a catchall phrase signifying all that’s supposedly wrong with government action(s) that are necessary to stem the mother of all systemic risks in financial system (admittedly caused, at least in part, by some dumb government policies).

Feds are obviously and transparently preemptive now (which is a good thing), and want to “Countrywide” Lehman before they have to “Bear Stearns” it in a panic atmosphere. Countrywide sale to BofA was also engineered on Thursday night, though without visibly “open” involvement of federal regulators and Fed.

Wonder if BofA or JPM will get Lehman, and who will then absorb WaMu, only because they are still digesting recent so-called “bailouts”.


64 posted on 09/12/2008 12:09:50 AM PDT by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: durasell
... signal a crisis of the type private companies cannot work out for themselves?

Not necessarily cannot but don't need to assume the huge uncertainty of failing institutions' portfolio values which no private party has the money or willingness to "guarantee". Think back to John Pierpont Morgan and his ad hoc solution to financial panic of 1907... before existence of Federal Reserve in 1913 originally created specifically with the idea of stopping reliance on private interests to "protect" the economy and possibly avoiding the financial "panics" altogether.

For example, LTCM crisis of 1998 was handled by NY Fed branch getting most major banks (all except Bear Stearns, which refused to participate) to commit reserves to temporarily shore up LTCM's hugely leveraged portfolio (by some accounts of about 100:1) until it was unwound. This time it is bigger, involving many financial institutions (due to bundling and "spreading the risk", which was supposed to reduce it) and compounded by still unresolved real estate macroeconomic environment... Also some of LTCM "helpers" last time have themselves become the "victims" of current crisis, so there is now a need for Fed and Treasury to step in as a lender or intermediary "of the last resort". The most leveraged institutions failed first (New Century and smaller REITs, Countrywide, Bear Stearns), the ones not capitalized or liquid enough to weather the writeoffs and loss of profitability follow.

65 posted on 09/12/2008 1:13:50 AM PDT by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: trumandogz

More socialism for the rich.


66 posted on 09/12/2008 3:11:42 AM PDT by glorgau
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To: CutePuppy

Thanks!


67 posted on 09/12/2008 6:41:41 AM PDT by durasell (!)
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To: CBF
Weren't these the same investment banks that only 18 months ago were all over the news with their partners enjoying the largest bonuses ever paid out in the history of business??

Probably.

I say, let the market correct itself, and if these guys still have shares, make them pony up -

Fuld owned 2 million shares as of November. He's lost about $120 million as the stock dropped from the 52 week high.

According to Forbes, he made $324 million in the 6 years thru 2005. If he broke any laws, take his money and throw him in jail. Shareholders should feel free to sue his ass off.

I was stuck holding the bill. Still fighting the problems 2 years after the fact. Where was the government then?? Didn't bail my ass out!

The government is bailing Lehman out? How's that?

68 posted on 09/12/2008 6:46:50 AM 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
The government is bailing Lehman out? How's that?

OK, maybe not in regards to Lehman, from further reading the government is assisting in facilitating and expedient handling of the crisis. Fair enough. Forgive me, I was getting my FReak on there.

But certainly in regards to Fanny Mae and Freddie Mac, auto manufacturers, airline companies, take your pick. My point isn't that I wanted or expected to have the government there to bail me out, but that there are certain industries that do.

69 posted on 09/12/2008 7:16:51 AM PDT by CBF (It's the law stupid!)
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To: CBF
But certainly in regards to Fanny Mae and Freddie Mac

That's some bailout!

70 posted on 09/12/2008 7:23:18 AM PDT by Toddsterpatriot (Let me apologize to begin with, let me apologize for what I’m about to say....)
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To: milestogo

Anyone know how much money the board and the executives will walk away with?


71 posted on 09/12/2008 7:25:19 AM PDT by CodeToad
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To: Southack

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

This has nothing to do with Bush. If the President actually had this much power God help us.


72 posted on 09/12/2008 7:26:14 AM PDT by CodeToad
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To: Toddsterpatriot

“Shareholders should feel free to sue his ass off.

Like that has worked so well in other cases like Qwest, Enron, Global Crossing, etc.


73 posted on 09/12/2008 7:31:01 AM PDT by CodeToad
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To: CodeToad
Shareholders should feel free to sue his ass off.

Like that has worked so well in other cases like Qwest, Enron, Global Crossing, etc.

Last I heard, officers of Qwest and Enron were in jail and haven't ripped off any shareholders lately.

Maybe you have some info I missed?

74 posted on 09/12/2008 7:44:23 AM 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

“Last I heard, officers of Qwest and Enron were in jail and haven’t ripped off any shareholders lately.”

What does them in jail have to do with suing them. The point is, as you obviously missed it, is that shareholders can sue all they want, they ain’t getting anything back. Thousands at Qwest lost their retirement accounts. Thousands more lost everything in those illegal and stinky deals, yet, the execs walked away with millions.


75 posted on 09/12/2008 7:47:15 AM PDT by CodeToad
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To: Toddsterpatriot

We’ll just have to wait and see the outcome in it’s full complexity and scale. This story is still developing.


76 posted on 09/12/2008 7:53:31 AM PDT by CBF (It's the law stupid!)
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To: CodeToad
What does them in jail have to do with suing them.

They broke the law, they're in jail. Isn't that good?

The point is, as you obviously missed it, is that shareholders can sue all they want, they ain’t getting anything back.

Enron shareholders are getting over $7 billion. AFAIK, Enron officers forfeited $10s of millions.

Thousands at Qwest lost their retirement accounts. Thousands more lost everything in those illegal and stinky deals, yet, the execs walked away with millions.

Nacchio in 2007 was convicted on 19 counts of illegal insider trading, sentenced to six years in prison and ordered to pay $71 million in fines and forfeitures.

The Feds probably kept some or all of the $71 million.

77 posted on 09/12/2008 7:57:48 AM PDT by Toddsterpatriot (Let me apologize to begin with, let me apologize for what I’m about to say....)
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To: milestogo

Lehman? Isn’t that the “Total Transformation Technique” guy?


78 posted on 09/12/2008 11:30:44 AM PDT by Chris DeWeese (http://www.firstcenturychristianity.net)
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To: ThePythonicCow

Hey.....I was right for once!!!

No guvmint money for LEH.


79 posted on 09/15/2008 2:02:51 PM PDT by jdsteel (Palin has more experience, and class, than Obama)
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To: jdsteel
Good call !!
80 posted on 09/15/2008 6:54:43 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: milestogo

The beginning of the end of American Capitalism.....


81 posted on 01/12/2012 6:44:53 PM PST by MinorityRepublican
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