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Started By
Message
1
Posted on 9/11/08 at 11:23 pm to kfizzle85
Changing ownership and slashing jobs and assets is not just a shell game.
Posted on 9/11/08 at 11:24 pm to Doc Fenton
It is if you eventually bail out the company that did the acquiring.
Posted on 9/11/08 at 11:27 pm to kfizzle85
No, it's really not. Not even close.
Posted on 9/11/08 at 11:31 pm to Doc Fenton
If BAC buys Countrywide (instead of the Fed bailing them out), then buys LEH (instead of the Fed bailing them out), THEN gets bailed out by the Fed (because they absorbed a bunch of shite)...do you see where I was going with this? Maybe shell game was the wrong term, I don't know.
Posted on 9/11/08 at 11:38 pm to kfizzle85
The Fed does not have to bail out BAC, and won't be doing so anytime soon. The Fed simply provided incentives for acquisitions to take place, so as to expedite what are essentially Chapter 11 bankruptcies combined with takeovers.
Didn't Congress provide a boost to Countrywide after BAC agreed to take it? Didn't this happen with Bear Stearns and JPM?
This is not about forestalling bailouts until further down the road. This is about subsidizing acquisitions so that jobs and assets can be cut loose as quick as possible. There's a huge difference.
Didn't Congress provide a boost to Countrywide after BAC agreed to take it? Didn't this happen with Bear Stearns and JPM?
This is not about forestalling bailouts until further down the road. This is about subsidizing acquisitions so that jobs and assets can be cut loose as quick as possible. There's a huge difference.
Posted on 9/11/08 at 11:45 pm to Doc Fenton
quote:
This is not about forestalling bailouts until further down the road. This is about subsidizing acquisitions so that jobs and assets can be cut loose as quick as possible. There's a huge difference.
Thanks for clearing this up, very important distinction. Forestalling bailouts would = bad bad idea.
Posted on 9/11/08 at 11:47 pm to Doc Fenton
You're absolutely right. It was more of a speculative quip about if BAC ever had to be bailed out. As far as I know, CFC was all BAC, and unlike BS (which I realize undermines my first post, just sayin.)
Posted on 9/12/08 at 5:53 am to Doc Fenton
quote:
This is about subsidizing acquisitions
You are right here.
but its still a bailout.
My opinion is that if they need the fed's help to make an acquisition, the value of the company is not quite low enough.
Posted on 9/12/08 at 7:03 am to MileHigh
But the value of the company is obviously already negative. It's efficient to keep the brand and infrastructure for the future, but the firm has to go through some sort of bankruptcy type of reorganization, whether official (as in slow and painful Chapter 11 process done through the court system) or unofficial (such as was the case with Bear Stearns).
Posted on 9/12/08 at 8:41 am to Doc Fenton
quote:
brand
Why the frick does the brand matter?
quote:
but the firm has to go through some sort of bankruptcy type of reorganization
Yes, I agree. But I see no reason why the gov't should subsidize this. How about the gov't give my fast food start up a few billion, since clearly we need more fast food!
Posted on 9/12/08 at 4:47 pm to MileHigh
But he didn't say it himself?
As the story says in the other thread, Lehman is NOT too big to fail, so the government could just let them twist. Maybe, maybe not.
Certainly, though, even if the government smoothed the transition along somehow, the bondholders of LEH would need to take a serious haircut. There's no way Lehman Brothers should get anything close to as favorable of a deal as Bear Stearns did.
As the story says in the other thread, Lehman is NOT too big to fail, so the government could just let them twist. Maybe, maybe not.
Certainly, though, even if the government smoothed the transition along somehow, the bondholders of LEH would need to take a serious haircut. There's no way Lehman Brothers should get anything close to as favorable of a deal as Bear Stearns did.
Posted on 9/12/08 at 5:01 pm to Doc Fenton
quote:
But he didn't say it himself?
no but i thought it was relevant to this thread.
quote:
There's no way Lehman Brothers should get anything close to as favorable of a deal as Bear Stearns did.
Oh, I agree. Traders have had 6 months to hedge or unwind trades with LEH. Everyone with a half a brain knew they were close to being dead after bear failed.
I don't mind the gov't making calls to help them out, but I don't want a subsidy like JPM got.
ETA: and my opinion counts for something!
This post was edited on 9/12/08 at 5:02 pm
Posted on 9/12/08 at 5:25 pm to MileHigh
quote:
ETA: and my opinion counts for something!
It will soon. I've just called for an Illuminati application form to be sent to you in the mail, and yeah, we already know your address.
Posted on 9/12/08 at 5:32 pm to Doc Fenton
quote:
It will soon. I've just called for an Illuminati application form to be sent to you in the mail, and yeah, we already know your address.
Score, do I get to wear a funny looking hat? I really like funny looking hats.
I would like to point out my hat size is 7 7/8....maybe even a 8, might have to special order any funny looking hats.
Posted on 9/12/08 at 5:35 pm to MileHigh
quote:
Score, do I get to wear a funny looking hat? I really like funny looking hats.
Of course. Life would be intolerably boring without having secret clubs where people gather to wear funny looking hats.
Posted on 9/14/08 at 11:37 am to Doc Fenton
Dealbreakers says deal has been reached, other outlets still not saying this
LINK
We understand that a deal has been reached to divide Lehman Brothers into two entities, with a "bad bank" taking the toxic, real-estate assets amounting to around $85 billion. The deal will be financed without any government backing. Lehman chief executive Dick Fuld will resign.
Bank of America will take the lion's share of the good assets of Lehman, with Barclay's and Nomura playing a role as well. An international consortium of financial firms will inject capital for the deal, preventing Lehman's assets from flooding the market in a fire sale. Many US based firms have not played a large role, in part because they are facing their own financial challenges.
Dick Fuld's resignation was demanded by Bank of America, which played a brinkmanship role in negotiations, threating to let Asian markets open tomorrow without a deal in place, a person familiar with the matter says. Many believe that a Monday market opening without a resolution would effectively have been the end of Lehman Brothers and could have spread financial turbulence to other securities firms. (On a side note: apparently, Japanese markets will be closed Monday morning for a holiday.)
Fuld is said to have taken tonight's developments very badly. He does not believe that the situation is as desperate as others on Wall Street believe it is, and may be trying to negotiate an alternative deal, we're told.
Of course, the situation remains fluid and there is still a possibility that the deal reached tonight could fall apart. Many of the details remain to be worked out, although there is widespread agreement on the outline of this deal.
Update: The New York Post is reporting that Lehman was taking offers for its investment management business today.
LINK
We understand that a deal has been reached to divide Lehman Brothers into two entities, with a "bad bank" taking the toxic, real-estate assets amounting to around $85 billion. The deal will be financed without any government backing. Lehman chief executive Dick Fuld will resign.
Bank of America will take the lion's share of the good assets of Lehman, with Barclay's and Nomura playing a role as well. An international consortium of financial firms will inject capital for the deal, preventing Lehman's assets from flooding the market in a fire sale. Many US based firms have not played a large role, in part because they are facing their own financial challenges.
Dick Fuld's resignation was demanded by Bank of America, which played a brinkmanship role in negotiations, threating to let Asian markets open tomorrow without a deal in place, a person familiar with the matter says. Many believe that a Monday market opening without a resolution would effectively have been the end of Lehman Brothers and could have spread financial turbulence to other securities firms. (On a side note: apparently, Japanese markets will be closed Monday morning for a holiday.)
Fuld is said to have taken tonight's developments very badly. He does not believe that the situation is as desperate as others on Wall Street believe it is, and may be trying to negotiate an alternative deal, we're told.
Of course, the situation remains fluid and there is still a possibility that the deal reached tonight could fall apart. Many of the details remain to be worked out, although there is widespread agreement on the outline of this deal.
Update: The New York Post is reporting that Lehman was taking offers for its investment management business today.
Posted on 9/14/08 at 12:09 pm to MileHigh
quote:
The deal will be financed without any government backing.
quote:
Fuld is said to have taken tonight's developments very badly.
Posted on 9/14/08 at 1:36 pm to MileHigh
Bloomberg is reporting that Bankers and brokers are preparing for a Lehman bankruptcy. They have begun "netting Lehman trades" as of 2 pm today. Not sure exactly what that means. But, it doesn't sound as if a deal has been reached.
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