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Time
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Sep 17, 08 7:40 AM CDT
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The Federal Reserve seemed to draw a hard line against bailouts with Lehman Bros., but just days later it stepped over that line to save AIG. Why? First, says Time : Size. Its implosion would have been "as close to an extinction-level event" as we've been since the Depression. But also: Fear. Whereas Lehman’s collapse was long expected, AIG blindsided the Fed and market participants alike. The business is so complex and mysterious, and its reach so broad, that no one was sure what its failure would mean.
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Wall Street Journal
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Sep 16, 08 3:41 PM CDT
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Barclays will pick up the US capital-markets business of Lehman Bros. in a $2-billion deal worked out today that will go before a bankruptcy judge at 5pm and Lehman creditors shortly after that, the Wall Street Journal reports. Barclays backed away from buying all of Lehman over the weekend, but a deal was salvaged by Lehman's bankruptcy, which made it easier to leave "bad assets" at the holding company to be liquidated by the court.
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Washington Post
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Sep 16, 08 12:27 PM CDT
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Cue the Kenny Rogers, suggests Steve Pearlstein in the Washington Post ; “Hank Paulson knows when to hold ‘em and when to fold ‘em.” Paulson was so determined not to commit federal dollars to bail out Lehman Bros. that when the banks said they couldn't step in without help, he called their bluff. It was the banks that blinked, he writes—not rescuing Lehman itself, but cushioning the blow to the economy.
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Financial Times (UK)
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Sep 16, 08 11:28 AM CDT
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Barclays has reached a deal to buy part of Lehman Brothers’ US business, the Financial Times reports. Lehman’s international divisions could eventually be brought into the deal, or the deal could allow for their acquisition later. Exact terms are unclear, but the Wall Street Journal adds that the figure will be around $2 billion.
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Wall Street Journal
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Sep 16, 08 5:20 AM CDT
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Barclays is in talks to buy Lehman Brothers’ key assets in a shift that could save 10,000 jobs and some operations, the Wall Street Journal reports. A deal could be finalized today. No sale price has yet emerged for the possible transaction, which wouldn’t touch Lehman’s bad assets. UK-based Barclays pulled out of talks on Sunday to purchase Lehman, which declared bankruptcy yesterday.
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Wall Street Journal
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Sep 15, 08 4:39 PM CDT
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As the dust settles on Wall Street, details of the final frantic negotiations on Lehman Brothers reveal that Henry Paulson’s opposition to a government bailout ultimately sealed the investment bank’s fate, the Journal reports. Paulson summoned an emergency meeting of 30 Wall Street executives Friday to definitively state that taxpayer rescue wasn’t coming, and urged them to work on saving Lehman.
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Bloomberg
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Sep 15, 08 3:26 PM CDT
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After a midday lull, stocks plummeted again late today as traders adjusted to the failure of Lehman Brothers and the acquisition of Merrill Lynch by Bank of America, Bloomberg reports. Lehman’s stock alone was down 94.9%. The Dow fell 504.48 to 10,917.51. The S&P 500 lost 59.01, its biggest drop since the 2001 terror attacks, closing at 1,192.69; the Nasdaq fell 81.36 to 2,179.91.
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Wall Street Journal
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Sep 15, 08 9:38 AM CDT
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What caused two venerable investment banks to implode this weekend, and how much more damage can we expect? It started when Lehman Bros. surprised markets by slashing the valuation of its mortgage holdings last week, making downward revisions so steep that "even longtime bears on the stock thought the firm was finally marking its residential portfolio to realistic levels," the Wall Street Journal writes. This prompted investors’ fears that other firms would follow suit, driving losses all around.
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CNNMoney
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Sep 15, 08 9:09 AM CDT
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Stocks tumbled at the opening bell this morning, with the Dow dropping more than 300 points after a weekend that turned the financial industry on its head. Lehman Brothers’ collapse and AIG’s request for $40 billion from the Federal Reserve “are causing a major financial panic this morning,” said one strategist—though Bank of America’s takeover of Merrill Lynch injected some optimism, CNNMoney reports.
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Bloomberg
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Sep 15, 08 7:42 AM CDT
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Lehman Brothers gasped its last breath this morning, filing for Chapter 11 protection in Manhattan under a crushing $613 billion in debt, the largest—and potentially most frightening—bankruptcy in US history, reports Bloomberg. Experts say the filing is likely to trigger a domino effect in the US economy.
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Bloomberg
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Sep 15, 08 3:40 AM CDT
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Lehman Brothers’ bankruptcy, along with news that mammoth insurer AIG is seeking a $40 billion Federal Reserve loan, has sent European and Asian markets, US futures and the dollar sharply downward, Bloomberg reports. Swiss-based UBS AG, Europe’s bank most hurt by the subprime crisis, plunged 7.2%. Australia’s biggest investment bank, Macquarie, fell 10%, and S&P futures expiring in December fell 2.9%.
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New York Times
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Sep 14, 08 8:20 PM CDT
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After what the New York Times calls one of the most extraordinary days in Wall Street history, Lehman Bros, the nation's fourth largest investment bank, is expected to file for bankruptcy protection. The withdrawal of both Bank of America and Barclays today removed the last hope to avoid the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago, the Times notes.
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TheStreet
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Sep 14, 08 7:24 PM CDT
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Barclay's dropping out of a Lehman deal means that the Feds lost a game of chicken with the big banks holding Lehman mortgages, and now there will be a disorderly liquidation of Lehman assets, instead of the orderly liquidation that would have been possible with a real buyer, James Cramer writes on TheStreet.com. The question is how big a hit those owning Lehman mortgages will take.
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Wall Street Journal
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Sep 14, 08 2:31 PM CDT
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Barclays told federal regulators today that it is walking away from talks to buy all or part of Lehman Brothers. Barclays reportedly balked at a request that shareholders approve the agreement, a process that could take weeks—and left some wondering why the demand came up as late as today. But Barclays may only be walking away as a negotiating tactic, the Wall Street Journal reports.
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Wall Street Journal
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Sep 13, 08 7:08 PM CDT
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A possible deal to salvage Lehman Brothers took shape today but cast a dark mood over Wall Street, the Wall Street Journal reports. Washington refused to save the ailing bank, sparking a plan for either Barclay's or Bank of America to buy "good" Lehman assets while other banks propped up an $85 billion "bad" Lehman bank—a move that could send ripples of pain through the financial industry.
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Wall Street Journal
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Sep 13, 08 2:05 PM CDT
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Washington and Wall Street continued talks today aimed at solving the Lehman Brothers crisis as early as tonight, the Wall Street Journal reports. Federal Reserve officials still refuse to approve a bailout like the one that enabled JP Morgan to acquire Bear Stearns this summer—but possible buyers like Bank of America and Barclays are balking at Lehman's bad assets, which have so far hindered a deal.
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Wall Street Journal
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Sep 13, 08 6:39 AM CDT
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The New York Fed called an emergency meeting of Wall Street heavyweights last night to try to avert a collapse of Lehman Brothers, the Wall Street Journal reports. Top execs of all the big financial firms were urged by NY Fed Chief Timothy Geithner to work together to save the bank, the New York Times reports, arguing that if they failed, other banks would be in jeopardy. Treasury Secretary Henry Paulson and SEC Chairman Christopher Cox were also in attendance.
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Financial Times (UK)
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Sep 12, 08 12:17 PM CDT
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Bank of America could partner with financial investor JC Flowers and a Chinese sovereign wealth fund on a bid to rescue Lehman Brothers, the Financial Times reports. The hobbled investment bank had resisted selling itself, but is now eagerly seeking suitors before the last of its goodwill on Wall Street dries up.
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New York Times
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Sep 12, 08 8:03 AM CDT
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Lehman Brothers employees who watched their colleagues at Bear Stearns lose their jobs earlier this year are preparing for a similar fate in an already clogged field, reports the New York Times . “Everyone is walking around like they have just been Tasered,” said one Lehman employee. Making matters worse, many receive a sizable chunk of their paycheck in the form of stock and stock options, and shares have plunged from $60 to about $4 this year.
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Washington Post
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Sep 11, 08 5:13 PM CDT
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The US government is helping to arrange a sale of Lehman Brothers this weekend, the Washington Post reports, with the Treasury Department and Federal Reserve working with the reeling investment bank to hammer down its fate before the Asian markets open Monday morning. Officials are reportedly talking to several different suitors and helping Lehman sort through the different scenarios.
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