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Fed and Treasury Working On Solution For Lehman Purchase

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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.

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.