Asians Balk At Lehman Buy and The Fed Steps In

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The Financial Times reported this morning that Lehman Brothers held talks on a sale of up a fifty percent stake with China's CITIC Securities and the state-owned Korea Development Bank, but both investors walked away because the price was too high. CITIC is denying that it held any talks with Lehman, while an unnamed KDB official says the bank is scaling back its foreign investments.
A DealBreaker tipster gave us some vague, drunk-sounding and probably offensive insights into this story. "Got cornered by these two Asian investors at Muji Bar last night," he writes in an email. "They tell me that they passed on Lehman - concerns about their strength - say - 'Too Many Chinks In The Armor' or was it Too Little Chinks...or was it Two Chinks Go Into A bar And Tell me They Are Passing On Lehman...I can't remember - it was so late."
We know exactly how he feels. If your friend opens an absinthe bar and asks you to help outa bit before it opens, do not under any circumstances accept payment in free absinthe. We eventually figured this out but it was too late. Last night we were told about some high level departures at Lehman but our absinthe soaked mind quickly wiped out the information. Maybe the head of structured products? It was so late.
In other news, apparently the Fed is so concerned about the possibility that Lehman will suffer the fate of Bear Stearns it has begun calling banks to make sure they are not pulling business from the troubled investment bank. When it heard rumors that Credit Suisse was pulling out of Lehman, Fed officials called to check. Credit Suisse denied the story, of course. Skeptics will point out that the Fed's calls are likely to intimidate banks from pulling out of Lehman regardless of its financial viability and risk taking, perhaps encouraging risky behavior by Lehman and worsening the already existing moral hazard under which the bank operates.
[Editorial note: Some readers are objecting to our inclusion of the racially insensitive quote above. We decided to include it because it accurately reflects the tone of many of the remarks on this story we've heard. That is, there's a lot of racially insensitive blather about foreign investments in Wall Street. Pretending that this isn't how people are talking about this isn't helpful and creates a false impression of the situation. People are talking like this, and we think that should be reported.]

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