Well, that didn’t take long. As soon as we floated the rumor about an emergency rate cut, we heard from a “source familiar with the matter” who tells us that the New York Federal Reserve and Treasury are scrambling to find a buyer for Lehman Brothers. Our source says that one possible solution may be to have regulators wave restrictions that have prevented private equity buyers from buying the troubled investment bank. Officials at the Fed and Treasury are looking into whether they may have the authority to grant waivers.
One plan under consideration is to bring in a foreign bank to make the purchase, with additional capital coming from private equity buyers. The situation was described as “fluid to the point of chaos, category 4 hurricane” by the source. Both the Fed and Treasury officials agree that there should not be another Fed backstop to Lehman obligations, one of tools employed to get JP Morgan Chase to buy Bear Stearns.
Update: Andrew Ross Sorkin just also said on CNBC that the Fed is actively helping find a solution to the crisis at Lehman.
Update II: Bloomberg reporting that Lehman is in negotiations with buyers. “Bankers from other firms are reviewing Lehman’s books today, people with knowledge of the situation said, declining to identify the potential acquirers,” Bloomberg says.
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
Black Thursday 2 Electric Boogaloo…I Bet Sarah Palin would just put Lehman on ebay
@ what price???
I’m gonna guess here and say less than a jar of mayo
wait wait, other potential buyers are just NOW checking out lehman’s books?
wtf?
price will be 1 TBSP of Mayo & + 1 sqr inch of shamwow per share
If BS went out @ 10…
does that include S&H?
LEH needs to merge with Sham Wow in order to survive.
that’s category 4
@8
Sham wow IS Lehman.
Every time someone says ‘Sham-wow’, another employee gets cut a Lehman.
See, between your post and mine, three Lehman people got let go!
name brand mayo or store brand
I think the Fed should step up and buy it. Then they would have not only 80% of mortgage originations but the machine needed to churn out structure paper to offload the mortgages. Perfect marriage.
I’d then suggest they talk BofA out of countrywide, they would have a fully integrated platform.
No Opinion
@11 Hellmann’s Light. “Bring out the best.”
@11
That’s probably the sticking point in the negotiations. Treasury prefers store brand, Fuld prefers Hellmans.
@12 Yeah, and where would the Fed get the dough to do so?
Unless they go with nationalizing Lehman, of course. Which is a pretty wild thought.
“wave restrictions that have prevented private equity buyers from buying ”
yes, they are going to lift the source of strength doctrine. these times have really brought out the worst in the NY fed/paulson
Fuld is missing Erin Callan and her Miracle Whip, it’s the only thing that made those long nights in the office bearable.
@12
and turn their headquarters into section 8 housing. I like it.
The Govt can nationalize the entire economy. The financials, the airlines and the automakers. Pretty soon we will be calling each other comrade.
Say, anybody else notice that Hellmann is a near anagram to Lehman?
Coincidence? I think NOT!!
Vince Offer is negotiating on behalf of Lehman. This is going to get very interesting, VERY SOON. THESE DEALS WILL NOT LAST.
Threw a $5 bill on a trader’s desk this morning and told him to buy me a share of Lehman. He laughed and said he would make sure to get me change.
Ron Popeil
@23 – who carries around $5 bills?
You following me Treasury Man?
Heard that LEH is being shopped to the National Coalition of Hot Dog Vendors. Might be a two pronged deal with Shake Shack buying in for a minority stake.
The Govt can nationalize the entire economy. The financials, the airlines and the automakers. Pretty soon we will be calling each other comrade.
@19 – With the massive decline in Lehman employees net worth they will need the new Section 8 housing. This could cause a catastophe of biblical proportions – Lehman MD’s selling their S500′s in favor of 15 yr old Fords and brownbagging it to their new jobs as janitors.
23 – So how many minutes later did you go back and ask for your $5 back so you could get your food-cart lunch?
@30 I bring my lunch in a little cooler.
Dick Fuld waited too long, what a maroon. He was just like J. Cayne, swaggering about how his firm was worth north of $100; blah blah until it was worth $2. Dick decided to act as if he was sitting on a pile of gold, when it was really just – well, you all know what it’s a pile of.
Instead of a “temporarily bruised giant” that could sell at a discount, Dick insisted it was just a flesh wound and that he had the upper hand.
Now it’s the Fed calling the shots. Dick – you overplayed your hand. Go make a fourth for bridge with Jimmy C, Chucky P, and Stanny O.
You make me sick – people losing their jobs, a fabled firm name about to go through the mud – because you refused to see the truth. Why not see about using some of your millions to help out some of your guys in the back office and mailroom, because there are just not jobs out there and you can weep in the sanctity of one of your homes.
Every time lehman goes down 10% an Angel (er, options trader) gets his wings
@27 – heard Shake Shack did due dili but wasn’t comfortable with the assets and walked. They felt more comfortable with what goes into hotdogs than the assets on Leh’s balance sheet.
DAVID EINHORN JUST BLEW A LOAD IN ERIN CALLAN’S FACE.
I’m hearing the private equity guys stepped back b/c the guys who run Neuberger, aside from owing a bunch of stock, do not have a retention package past next year and are looking for 400mm to go along with any deal. Anyone hear something similar?
we heard from a “source familiar with the matter” who tells us that the New York Federal Reserve and Treasury are scrambling to find a buyer for Lehman Brothers.
Bullshit. Gawd, you geniuses will believe anything.
The symbol ain’t a bull for nothing. Herd thinkers, all.
#36 – they want to buy it out themselves. Don’t know why they can’t cut a deal where they own a chunk and the acquiror gets the majority.
Neuberger’s people’s contracts end middle of October.
who cares about the lehman death watch, let’s talk about the dennis kneale death watch. how long does he live after calling gasparino “sweetie” @2:46 of this clip:
http://www.cnbc.com/id/15840232?video=852151202&play=1
there is a reason so many prospects have walked from this deal. There is also a reason why LEH wouldn’t come out with full earnings a week early.
without another fed bailout to assume the risk, I’m betting nobody touches it
So how savagely are the LEH employees getting fucked by this? I mean in terms of the way the LEH restricted-stock unit scheme works for annual comp? I thought they have to take some percentage of their comp in RSUs that vest over N years, right?
@ 42, oh, perhaps about as savagely as they ***ked their clients, perhaps?
The Fed only acts on Fridays after 4 pm. If LEH can survive until then, we’re all OK.
@32 Thanks for telling it like it is for the everyday worker. Not everyone who works there is a big man-thing on the trading floor.
@42 Pretty hard. That is correct and the %age of RSUs as comp had been increasing last couple of years.
i have herd that LEH MDs have a 5yr cliff
@42: I’ve heard before that at least at the MD level that about 2/3 of bonus is in 5 year restricted stock.
42 Yeah, honestly, why is it that whenever comp is structured as a two way street (that is, people will be rewarded when things are going well but should expect to be penalized when they’re not) everyone starts whining like a baby. Its so lame, esp coming from people that brag about embracing risk and the wisdom of survival of the fittest.
@46,47,45 – Thanks for the info.
Man, I’m glad I pulled up stakes and left the street when I did (last year). I’m enjoying watching this from a distance, but I’m sure the reality is pretty grim for a lot of folks out there. On the other hand, a lot of the people I met from LEH were pretty arrogant assholes so I guess you reap what you sow to some degree…
when does einhorny cover?
@48: Yeah, I feel bad for people who just end up being collateral damage in these things, but, after the .com bust I don’t have a lot of sympathy for people who put their eggs in one basket. You have to prepare for the worst, whether you’re making $50K a year or $1M. I knew a guy at Bear, who came to work there from some other firm, converted all of his stock from the previous job into BSC and then lost it all the next week – $1M+ down the drain, he was totally wiped out. I just don’t get it – anyone who works in this industry knows it’s built on platform of lies, manipulation, and greed. Not that there’s anything wrong with that, but if you ever forget that you’re walking on thin ice, you’re bound to get screwed.
Guess lot of FIG bankers are pulling all nighters crunching Broker dealer comps…..
Must suck when its for you own firm
@51- Well said..
news flash — apparently lehman employees may look into other jobs!
http://www.reuters.com/article/marketsNews/idINN1112974120080911?rpc=44
@54: Reuter’s news service is renowned for their keen insights on the state of the financial industry. This article just goes to show how their team of talented, hard-hitting reporters can leverage their sophisticated networks of sources, cultivated over years of covering this industry, to bring you the raw stories you won’t find elsewhere. I’m upgrading TRI from neutral to market-outperform based on this latest development.
bCHAlN Im obliged for the post.Really looking forward to read more. Keep writing.