Will the Fed let Lehman Fail?

[poorsaver]

Chatter on the web is the Fed might orchestrate a shotgun wedding of sorts, possibly between B of A. More backstopping? Or backstabbing the taxpayer.

[patientlywaiting]

It will be interesting to watch.

http://money.cnn.com/2008/09/12/news/companies/paulson_lehman.ap/index.htm?postversion=2008091212
WASHINGTON (AP) — Treasury Secretary Henry Paulson is against any use of government money to bail out Lehman Brothers Holdings Inc., a person familiar with his thinking said Friday.

[patientlywaiting]

It will be interesting to watch.

http://money.cnn.com/2008/09/12/news/companies/paulson_lehman.ap/index.htm?postversion=2008091212
WASHINGTON (AP) — Treasury Secretary Henry Paulson is against any use of government money to bail out Lehman Brothers Holdings Inc., a person familiar with his thinking said Friday.

[patientlywaiting]

It will be interesting to watch.

http://money.cnn.com/2008/09/12/news/companies/paulson_lehman.ap/index.htm?postversion=2008091212
WASHINGTON (AP) — Treasury Secretary Henry Paulson is against any use of government money to bail out Lehman Brothers Holdings Inc., a person familiar with his thinking said Friday.

[patientlywaiting]

It will be interesting to watch.

http://money.cnn.com/2008/09/12/news/companies/paulson_lehman.ap/index.htm?postversion=2008091212
WASHINGTON (AP) — Treasury Secretary Henry Paulson is against any use of government money to bail out Lehman Brothers Holdings Inc., a person familiar with his thinking said Friday.

[patientlywaiting]

It will be interesting to watch.

http://money.cnn.com/2008/09/12/news/companies/paulson_lehman.ap/index.htm?postversion=2008091212
WASHINGTON (AP) — Treasury Secretary Henry Paulson is against any use of government money to bail out Lehman Brothers Holdings Inc., a person familiar with his thinking said Friday.

[DWCAP]

I am confused. Wasn’t a major reason to do a BS bailout for BS to protect the counterparty’s. I could be totally wrong, but I thought the logic went something like this:

-Bear fails.
-Sells all assets in firesales to pay debts.
-Market prices appear for MBS/CBO/CDO2 and etc
-Deadweight still in M3 gets repriced
-More institutions start failing due to big losses

If Lehman goes under, doesn’t that start this all over again, making the Bear bailout pointless cept for the few billion dollar hit the treasury will take??????? Or is Lehman that much smaller than Bear was?

[DWCAP]

I am confused. Wasn’t a major reason to do a BS bailout for BS to protect the counterparty’s. I could be totally wrong, but I thought the logic went something like this:

-Bear fails.
-Sells all assets in firesales to pay debts.
-Market prices appear for MBS/CBO/CDO2 and etc
-Deadweight still in M3 gets repriced
-More institutions start failing due to big losses

If Lehman goes under, doesn’t that start this all over again, making the Bear bailout pointless cept for the few billion dollar hit the treasury will take??????? Or is Lehman that much smaller than Bear was?

[DWCAP]

I am confused. Wasn’t a major reason to do a BS bailout for BS to protect the counterparty’s. I could be totally wrong, but I thought the logic went something like this:

-Bear fails.
-Sells all assets in firesales to pay debts.
-Market prices appear for MBS/CBO/CDO2 and etc
-Deadweight still in M3 gets repriced
-More institutions start failing due to big losses

If Lehman goes under, doesn’t that start this all over again, making the Bear bailout pointless cept for the few billion dollar hit the treasury will take??????? Or is Lehman that much smaller than Bear was?

[DWCAP]

I am confused. Wasn’t a major reason to do a BS bailout for BS to protect the counterparty’s. I could be totally wrong, but I thought the logic went something like this:

-Bear fails.
-Sells all assets in firesales to pay debts.
-Market prices appear for MBS/CBO/CDO2 and etc
-Deadweight still in M3 gets repriced
-More institutions start failing due to big losses

If Lehman goes under, doesn’t that start this all over again, making the Bear bailout pointless cept for the few billion dollar hit the treasury will take??????? Or is Lehman that much smaller than Bear was?

[DWCAP]

I am confused. Wasn’t a major reason to do a BS bailout for BS to protect the counterparty’s. I could be totally wrong, but I thought the logic went something like this:

-Bear fails.
-Sells all assets in firesales to pay debts.
-Market prices appear for MBS/CBO/CDO2 and etc
-Deadweight still in M3 gets repriced
-More institutions start failing due to big losses

If Lehman goes under, doesn’t that start this all over again, making the Bear bailout pointless cept for the few billion dollar hit the treasury will take??????? Or is Lehman that much smaller than Bear was?

[cr]

Will Lehman be bailed out?

[quote=A Paulson source]”There are two things that make this different from Bear Stearns. The market’s been aware of the situation for a long time and has had time to prepare. Second, the Primary Dealer Credit Facility was created by the Fed to allow time for an orderly process,”

“Given these things, (Paulson) is adamant that there will not be government money used in the resolution of the situation,” the source added.[/quote]

So Paulson states adamantly no Government bailout for Lehman.

Given his track record I’d say expect a bailout on Sunday.

His foot in the door is not using Government money, because he will use taxpayer money.

I hope I’m wrong.

Investors who thought they were investing in a sound company were screwed, banks jointly leveraged with Lehman, and insurance companies will be hit too.

[cr]

Will Lehman be bailed out?

[quote=A Paulson source]”There are two things that make this different from Bear Stearns. The market’s been aware of the situation for a long time and has had time to prepare. Second, the Primary Dealer Credit Facility was created by the Fed to allow time for an orderly process,”

“Given these things, (Paulson) is adamant that there will not be government money used in the resolution of the situation,” the source added.[/quote]

So Paulson states adamantly no Government bailout for Lehman.

Given his track record I’d say expect a bailout on Sunday.

His foot in the door is not using Government money, because he will use taxpayer money.

I hope I’m wrong.

Investors who thought they were investing in a sound company were screwed, banks jointly leveraged with Lehman, and insurance companies will be hit too.

[cr]

Will Lehman be bailed out?

[quote=A Paulson source]”There are two things that make this different from Bear Stearns. The market’s been aware of the situation for a long time and has had time to prepare. Second, the Primary Dealer Credit Facility was created by the Fed to allow time for an orderly process,”

“Given these things, (Paulson) is adamant that there will not be government money used in the resolution of the situation,” the source added.[/quote]

So Paulson states adamantly no Government bailout for Lehman.

Given his track record I’d say expect a bailout on Sunday.

His foot in the door is not using Government money, because he will use taxpayer money.

I hope I’m wrong.

Investors who thought they were investing in a sound company were screwed, banks jointly leveraged with Lehman, and insurance companies will be hit too.

[cr]

Will Lehman be bailed out?

[quote=A Paulson source]”There are two things that make this different from Bear Stearns. The market’s been aware of the situation for a long time and has had time to prepare. Second, the Primary Dealer Credit Facility was created by the Fed to allow time for an orderly process,”

“Given these things, (Paulson) is adamant that there will not be government money used in the resolution of the situation,” the source added.[/quote]

So Paulson states adamantly no Government bailout for Lehman.

Given his track record I’d say expect a bailout on Sunday.

His foot in the door is not using Government money, because he will use taxpayer money.

I hope I’m wrong.

Investors who thought they were investing in a sound company were screwed, banks jointly leveraged with Lehman, and insurance companies will be hit too.

[Author]

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