That's some bailout!
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 ...
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.
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.
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.
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”.
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.
More socialism for the rich.
Thanks!
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?
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.
That's some bailout!
Anyone know how much money the board and the executives will walk away with?
“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.
“Shareholders should feel free to sue his ass off.
“
Like that has worked so well in other cases like Qwest, Enron, Global Crossing, etc.
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?
“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.
We’ll just have to wait and see the outcome in it’s full complexity and scale. This story is still developing.
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.
Hey.....I was right for once!!!
No guvmint money for LEH.
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