The Oil Drum: Europe | Lehman: more socialising the losses of the rich

149 comments on Lehman: more socialising the losses of the rich

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Jerome a Paris on September 14, 2008 - 2:19pm

The Financial Times in London is more specific:

Top Wall Street executives and regulators were on Sunday night racing to thrash out a rescue plan for Lehman Brothers as Barclays of the UK, one of two front-runners to buy the stricken bank, said it would walk away unless the US government provided a financial safety net for a takeover.

Barclays said it would withdraw from the race after failing to secure a US government guarantee over Lehman’s potentially huge trading and credit losses. However, in a sign of the increasing brinkmanship over the rescue the UK bank indicated that *a change in the government’s position would bring it back to the table*.

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rainsong on September 14, 2008 - 2:54pm

Business failures 1929 style. Gambling, trading, speculation, leverage, massive borrowings, then bankruptcy. People who invest in money losing companies are likely to lose money.

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DaveMart on September 14, 2008 - 2:59pm

Barclays Bank is worth, at an approximate estimate, sod all, so what is being attempted here is the takeover by one non-viable institution of another, conditional on hand-outs from the taxpayer.
Barclays had a rights issue, which just about scraped through, and have likely vastly understated their potential losses and need re-capitalising themselves.
This sounds like a double or quits desperation play, perhaps an attempt to ensure that they are 'too big to fail'

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andybts on September 14, 2008 - 3:19pm

Agreed. It seems very much like you suggest. They are attempting to make the 'too big to fail' list so they are not cast to the wolves. In effect, the big financial players are attempting to consolidate their web of interconnectedness.

The global financial system is falling apart really quickly now... it's looking like they'll struggle to keep it going until the US election.

Unfortunately that makes me expect a worse distraction event soon.

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