Lehman

  • 16 Sep 2008 at 2:47 PM
  • Lehman

Lehman And Barclays Announce Acquisition To Employees

The chief executive of Barclays and the president of Lehman Brothers just announced an acquisition of a part of Lehman by Barclays, according to someone present. It was unclear exactly what Barclays was acquiring but earlier news reporters suggested it would be the broker-deal arm of Lehman.
Barclays Bob Diamond and Lehman’s Bart McDade took to the second floor of Lehman to speak to employees.
“It’s time to dominate,” McDade announced.
They are apparently now going floor to floor making the announcement.
“They just announced they are keeping the trading platform in New York,” a person familiar with the matter said.
Update: Lehman employees have set up LaidOffByLehman.com, which is also reporting the tour by McDade and Diamond.

  • 16 Sep 2008 at 11:15 AM
  • Lehman

Barclays – Lehman Deal Marks Bottom of Credit Crunch Panic

Well, now that someone actually put their money where their leaks were and ponied up for something that Lehman owns, other troubled firms look to be buoyed by the lift in Lehman confidence.
Lehman shares soared 9.00% on the news to $0.2276 per share and the rising tide of confidence that the assets in the opaque portfolios of financial firms are more of a Polonium-210-slow-and-painful kind of toxicity instead of the quick-and-violent lethality of sodium cyanide rallied firms like Washington Mutual (WM) up a whopping 19.50% to $2.39, its highest point in the preceding 10 minutes.
The news also boosted the second derivative of AIG’s stock price. The rate of the rate of deterioration in AIG’s share price reversed quickly, jumping +5.50%, up from a brutal -24.33% yesterday. AIG indicated it does not comment on the second derivative of their stock price during market hours, pursuant to that firm’s investor relations policy.

  • 16 Sep 2008 at 10:05 AM
  • Lehman

The Debt That Lehman Dumped Pumped?

Depending on how hungry investors were for debt today, they may or may not have been annoyed at the news that Lehman’s rumored BWIC for $800+ million of debt from issuers like Tribune, Visteon, Sabre Holdings and the like has been canceled. Perhaps Barclays is closing in for the kill after all? Yep, that was it.

  • 15 Sep 2008 at 1:26 PM
  • Lehman

Barclays Balks Before Bluff Blows Bank Buy

One of the most interesting developments in the Lehman debacle must be the abrupt departure and the return (which followed hard upon) of Barclays as a Lehman suitor.
Hazarding a guess, one might think that Barclays was trying to stare down Paulson, pressing for federal backing of the potential toxic waste Barclays would have to take on in a Lehman purchase. After all, Jamie got the government to blink, why shouldn’t our friends from across the pond? That didn’t work so well. Bailing out a major counter-party and prime broker (and coping with the moral hazard problems that brings) was one thing, supporting a foreign buyer was a no-go and I suspect not a small number of risk arb managers who figured that out on Friday did fairly well today.
Still, The Wall Street Journal points out that Paulson was in no mood to nursemaid another transaction no matter who the buyer. Our own John Carney makes the case for a tempestuous and unpredictable Paulson. And for Barclays’ part, well, they look a bit silly now that their bluff bombed. But then, it tends to illuminate the desperation Lehman must feel that they seem to be ignoring all the bluster and continue to act as if nothing at all has happened now that the Brits are back bidding.
John Mack escapes with my favorite quote from the morass that is Lehman’s disposition: “If we’re going to do this deal, where does it end?”

  • 15 Sep 2008 at 11:27 AM
  • Lehman

Wall Street Character Arcs

It is rather shocking (but not) to see how quickly the financial press turns on its former heroes. Truly, very fair weather friends, the press. To wit: Dick Fuld’s fall from grace with the Financial Times as seen in their headlines and prose.
Smart survivors of the carnage

“Dick Fuld, Lehman Brothers chief executive, has emerged triumphantly from the squeeze….”
– FT November 5, 2007
Lehman rides out credit crisis

“Analysts had expected Lehman to earn $1.42 a share. But the diversification strategy of Richard Fuld, chief executive, helped avert the predicted earnings drop….”
– FT December 14, 2007
A fighter on the ropes

– FT June 14, 2008
Dick Fuld, the executioner
– FT June 17, 2008
On Wall Street: Be they ever so humble, but the times they are a-changing

“You know the Street has serious self-esteem issues, when even Dick Fuld, one of the toughest bankers around, has to come out with a mea culpa for Lehman Brothers’ losses.”
– FT June 20, 2008
Lehman chief to forgo annual bonus

– FT June 27, 2008
Fuld faces a tough fight to save his legacy

“Dick Fuld’s reputation as a titan of Wall Street….”
– FT September 10, 2008
Hadron Collider meets Dick Fuld

“…Lehman Brothers chief Dick Fuld was subjected to the laser-beam treatment….”
– FT September 11, 2008
Hubris – is thy name Richard Fuld?

– FT September 14, 2008
Denial disguises Lehman reality

– FT September 15, 2008
A tragedy of hubris and nemesis

– FT September 15, 2008
Ah yes. From smart fighter, triumphant, to humble tower of strength, to executioner, to tough banker to egotistical maniac. We love our financial heros strong, indelible and tough. Until we don’t anymore.

  • 15 Sep 2008 at 10:48 AM
  • Lehman

The Lehman Bankruptcy At A Glance

Best observation:
It might be a good idea to expand the maximum check-box answers on the form for:
Estimated Number of Creditors (Over 100,000).
Estimated Assets (More than 1 Billion).
Estimated Liabilities (More than 1 Billion).
Potential Inaccuracies:
“Does the debtor own or have possession of any property that poses or is alleged to pose a threat of imminent and identifiable harm to public health or safety?” Yes [ ] No [X].
(Though, I suppose it is possible Dick Fuld has been fired, and this is why his ego is not triggering this provision).
Most Potentially Screwed Creditors (though note that some of these may be listed in their capacity as trustees for the debt issues, not as creditors):
CitiBank, Bank of New York (jointly): “Approximately $138 billion” in “Bond Debt.”
Bank of New York (solely): $17 billion.
Aozora Bank, Ltd., Tokyo: $463 million.
Country Other Than The United States With Most Potentially Screwed Creditors:
Japan- about $1.6 billion. (First the real estate in the 80s, now this, HAH!)
Best “That About Sums It Up” Figures:
Total Assets: $639 billion. (AHEM!)
Total Liabilities: $613 billion.
Most Obvious Equity Pain:
Name / % of Common Stock Held
AXA and related parties / 7.25%
ClearBridge Advisors, LLC and related parties / 6.33%
FMR LLC and related parties / 5.87%
Method For The Very Broker-Dealish Lehman To Avoid Chapter 7?
File at the holding company level?

Trading With Lehman: A Commodities Update

Lehman Brothers continues to trade natural gas swaps in the US ICE market, but ICE Europe has shut them out its market for crude oil futures, a person familiar with the matter said. The CME group continues to allow them to trade agricultural futures, currencies and interest rate swaps, and on the NYMEX (which is owned by the CME group) Lehman is still permitted to trade on the NYMEX, the person said.
No one is trading on the physical markets. While several trading floors were instructed by managers to cease trading on the spot market with Lehman late last week and over the weekend, part of the lack of physical trading could be due to the effects of hurricane Ike, which is believed to be diminishing physical trading in oil today. Many Houston trading desks are operating remotely today, with traders difficult to reach by emails and phones and some offices in Houston still closed.