Skip to: Content
Skip to: Site Navigation
Skip to: Search

December 2, 2008 7:56:24 PM CST

Learn about Newser Points »

« Back to the grid | Next story »

Lehman Considers 'Good Bank/Bad Bank' Split

Posted Sep 5, 08 10:22 AM CDT in Business 

(Newser) – Lehman Brothers is considering splitting itself into two banks, a “bad bank” to house its $30 billion in troubled mortgage and real estate holdings, and a “good bank” to carry on with the help of a new investor or two, the New York Times reports. The move, which is not unprecedented, may be necessary to re-instill confidence in the beleaguered institution.

Sheltering bad mortgage debt in the “bad bank” would offer shareholders a means to bet on commercial real estate’s turnaround while encouraging other institutions to do business with Lehman’s “good” arm. "Management is in a quandary—the commercial mortgage is performing too well to be dumped in a fire sale but, yet on the other hand, the equity market appears to want it gone," one analyst wrote this week.

Source New York Times

0 comments | Print E-mail | Digg Seed this on Newsvine Add this link to Del.icio.us StumbleUpon

Related Newser Stories

  • Wall Street's Doom Years in the Making

    Nov 27, 08 4:00 PM CST
    Wall Street's Doom Years in the Making When he wrote Liar’s Poker in 1989, Michael Lewis figured the end of Wall Street was near. After all, it had hired him, a 24-year-old with neither experience nor interest in finance. “Sooner rather than later,” he writes in Portfolio, “someone was going to identify me, along with a lot of people more or less like me, as a fraud.” Now, decades later, Wall Street’s stupidity has finally brought it low. More »

  • Where Is Wall Street's Leadership in This Mess?

    Oct 14, 08 12:53 PM CDT
    Where Is Wall Street's Leadership in This Mess? It’s easy to criticize Hank Paulson, writes Steven Pearlstein for the Washington Post—for not predicting the depth and breadth of the crisis as subprime mortgages went sour a year ago, for letting Lehman Brothers fail, or for taking his lead from the UK this weekend. But Paulson and others in the government have shown admirable leadership—"Wall Street, by contrast, has served up a nothing sandwich."
    More »

  • How-To Films for Tough Times

    Oct 12, 08 5:17 AM CDT
    How-To Films for Tough Times Nothing lifts a Great Depression like a visit to the talkies. Gawker recommends 20 films to watch on your iPhone while standing in tomorrow's bread lines—assuming you haven't already sold your iPhone.

    • It's a Wonderful Life: How to survive a bank run, and have a Merry Christmas.
    • Grapes of Wrath: Your Ugg boots won't help you on that long march.
    • Ironweed: Pick up tips on Depression-era love, even if Jack Nicholson and Meryl Streep do get a little nasty.
    More »

  • How to Protect Your Money

    Sep 30, 08 2:56 AM CDT
    How to Protect Your Money After the biggest single-day's loss in Wall Street's history, even Americans whose sole investment is a bank account are nervously scratching their heads. Here are some guidelines to the failed-bailout crisis from the New York Times:

    • What happens next? The market's deep dive may scare Congress into passing the bailout or a new bill, at which point stocks may rebound.
    More »

  • 10 Films About Nasty Business

    Sep 29, 08 4:10 PM CDT
    10 Films About Nasty Business Wall Street executives have it tough these days, but Hollywood has rarely gone easy on guys in suits. USA Today lists 10 definitive films about them:

    • Stagecoach (1939): Like all John Ford movies, this one makes a banker look bad.
    • Splendor in the Grass (1961): A 1930s investor doesn't just get depressed—he takes it out the window.
    • American Madness (1932): A bank man takes a rare turn as the nice guy, battling his board over loan policies.
    More »

Lehman Brothers' New York headquarters is shown in this March 18, 2008 file photo. The bank may split to create confidence in its better assets as its mortgage investments languish.   (AP Photo/Mark Lennihan, File)
Lehman brothers, beleaguered by the credit crisis, is considering splitting itself into two banks.   (AP Photo/Katsumi Kasahara)
« Prev« Prev | Next »Next » Slideshow

Management is in a quandary — the commercial mortgage is performing too well to be dumped in a fire sale but, yet on the other hand, the equity market appears to want it gone. - David Trone, analyst, Fox-Pitt Kelton

« Prev« Prev | Next »Next » Slideshow
Our editors also recommend:

Threads (
1
 of 4)

Tags

subprime crisis • Wall Street • Lehman Brothers • finance • mortgage debt


Loading...

Premium Articles from HighBeam

Find more articles like this

Today's Most Popular

Loading...

Other Business Stories

What is Newser?

2008 Codie Finalist

Face it: there's too much news. At Newser a team of editors and writers culls the most important stories from hundreds of U.S. and international sources and reduces them to a headline, picture, and two paragraphs. It's the Newser guarantee: we can take any report or column or video and pack what you need to know into 120 words or less. Newser's short-form aggregation, visual format, and unique information tools help you get more of the kind of news you want, in a quicker and more entertaining way. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »