Feds Won’t Bail Out Lehman
According to financial wire service reports, the federal government is unwilling to provide any additional help to New York’s Lehman Brothers Holdings, a global financial services firm. The 158-year-old company lost $4 billion dollars in the third quarter of this year, due to the subprime mortgage crisis.
Treasury Secretary Hank Paulson will allow Lehman to continue borrowing short-term money from the Federal Reserve—something the firm has been able to do since the Spring.
The government’s unwillingness to bail out Lehman has many on Wall Street fearful. Lehman is racing to find another bank to buy it in a bid to stave off collapse.
On Friday, Lehman's stock fell 13.5%, to $3.57, continuing a death spiral that began on Sept. 8.
Now that Wall Street has realized Lehman CEO Dick Fuld won't be able to pull off his previously announced plan for shoring up the balance sheet, it's become a race against time for Fuld to find a buyer—at any price. This may be difficult, as the buyer must take on $30 in rotting commercial real estate assets.
The speculation on Wall Street is that Bank of America, Barclays, and a consortium of private equity firms are the most interested suitors.
Treasury Secretary Hank Paulson will allow Lehman to continue borrowing short-term money from the Federal Reserve—something the firm has been able to do since the Spring.
The government’s unwillingness to bail out Lehman has many on Wall Street fearful. Lehman is racing to find another bank to buy it in a bid to stave off collapse.
On Friday, Lehman's stock fell 13.5%, to $3.57, continuing a death spiral that began on Sept. 8.
Now that Wall Street has realized Lehman CEO Dick Fuld won't be able to pull off his previously announced plan for shoring up the balance sheet, it's become a race against time for Fuld to find a buyer—at any price. This may be difficult, as the buyer must take on $30 in rotting commercial real estate assets.
The speculation on Wall Street is that Bank of America, Barclays, and a consortium of private equity firms are the most interested suitors.
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