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raycarey

i defer to your knowledge and experience, but i would think that goldman would be a likely choice....that is if they're books are as clean as they say they are.

what a country......profits for banks are privatized and their losses socialized.

bear is lucky they fell first. they're isn't going to be anyone around to save merril if/when they go under.

Butterfly

US Treasury Bills mature in less than 1 year, usually 6 months and are sold at discount, there are the Zero-Coupon Treasuries, so yes there are short terms,

You might be confused with long term STRIPP, which is the stripping of a long term US Treasury bond by large financial institutions and resold to investors, which is something different and it is not issued by the US Treasury, only the underlying asset is from the US Treasury

Accidental Ajarn

So, has the US economy failed as that nutcase BKKA predicated? Fuck, here is an obvious example of a little knowledge is a dangerous thing. Bkka may fool some of you (Like rc) who don't really understand economics since Bkka has learned a few of the words, but Bkka has no real knowledge or analytical ability. He is just a nutcase.

Spin

LEH look doomed, Barclays took one look at their books and got on their toes.
Next up is Merril Lynch.

Another week of systemic risk for the Fed to deal with.

bkkandrew

^I said a while ago that Lehman going bust 'was a given', but I had never suspected that it might be a proper bankruptcy with no bailout. With only a few hours to go, this is what we are facing!

When I predicted the collapse of the US banking system as we know it and the systemic collapse in the FED, I was waiting for this to spread to Citigroup and had assumed that Lehman and Merrils would be bailed and Citi would prove to be the one too big to bail. It now looks like the FED have decided to circle the wagons now.

who

"systemic collapse in the FED"

What does that mean ?

bkkandrew

When one entity causes another one to fail due to its own failure.

I was typing fast, more accurately it should have read 'to' not 'in'. I believe that Paulson has now realised that Lehman on top of Freddie/Fannie, on top of Bear will deplete the pot too much and is now drawing back from a bailout.

who

bkkandrew

Spin

I wonder if the Fed will use an interest rate cut ahead of tuesdays announcment as a bone to toss wall street for a few hours?

bkkandrew

They did that last time and it worked. Maybe they think that this would be a winner again?

who

bkkandrew

The statement in full:

ISDA Statement on Lehman Brothers Bankruptcy Trades: Full Text

By Scott Lanman

Sept. 14 (Bloomberg) -- Following is a statement today from the International Swaps and Derivatives Association:

``ISDA confirms a netting trading session will take place between 2 pm and 4 pm New York time for OTC derivatives. Product classes involved are credit, equity, rates, FX and commodity derivatives. The purpose of this session is to reduce risk associated with a potential Lehman Brothers Holding Inc. bankruptcy filing. Trades are contingent on a bankruptcy filing at or before 11:59 pm New York time, Sunday, September 14, 2008. If there is no filing, the trades cease to exist. These trades are subject to a protocol which is being distributed by ISDA (International Swaps and Derivatives Association). Traders should execute the protocol and return to ISDA.''

Taken from:

Bloomberg.com: Worldwide

bkkandrew

Greenspan gives his two-cents worth:

Greenspan Says Crisis May Be `Once in Century' Event (Update1)

By Vivien Lou Chen

Sept. 14 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the financial crisis that began with the collapse of the subprime-mortgage market last year ``is probably a once in a century event'' that will lead to the failure of more firms.

``There's no question that this is in the process of outstripping anything I've seen, and it is still not resolved,'' Greenspan said in an interview today on ABC's ``This Week with George Stephanopoulos.'' Greenspan, 82, retired from the Fed in January 2006 after serving for 18 years as chairman.

Treasury and Federal Reserve officials are working on a sale of Lehman Brothers Holdings Inc., the 158-year-old investment bank that reported a third-quarter loss of $3.9 billion. U.S. Treasury Secretary Henry Paulson, who spearheaded a government takeover of mortgage giants Fannie Mae and Freddie Mac last weekend, has said he's reluctant to use Federal funds to rescue Lehman.

``What they are trying to do with Lehman is find a way in which there is no government money involved in this particular set of negotiations,'' Greenspan said. ``If they can't, they have to make a very key decision as to whether they allow it to liquidate or support it,'' he said, adding that he doesn't know enough details to recommend the right move.

In March, the Federal Reserve took on a $29 billion portfolio of mortgage-backed debt and other assets when it brokered the sale of Bear Stearns Cos. to JPMorgan Chase & Co. It also opened up cash loans to investment banks, a safety net unavailable to Bear Stearns.

`Fundamental' Institutions

``There are certain types of institutions which are so fundamental to the functioning of the movement of savings into real investments in an economy that on very rare occasions, and this is one of them, it's desirable to prevent them from liquidating in a sharply disruptive manner,'' Greenspan said.

Asked whether government bailouts should be used to help the auto industry, Greenspan said that would undermine savings and growth of the economy, leading to stagnation.

Shares of American International Group Inc., the largest U.S. insurer, have plunged 46 percent over the past week on concern that the company may be the next big U.S. financial firm after Lehman to fall short of capital.

The federal government took over Fannie Mae and Freddie Mac, the two largest sources of money for U.S. home loans, on Sept. 7, placing them under conservatorship and establishing procedures for buying their senior preferred stock if liabilities exceed assets.

Winners and Losers

``This is a once in a half century, probably once in a century type of event,'' Greenspan said. ``We shouldn't try to protect every single institution. The ordinary cost of financial change has winners and losers.''

Bloomberg.com: Worldwide

Spin

^They're certainly short of options now, I can't think what else they could do to calm any chaos might develop. Next deadline is 11.59 which is the latest bankruptcy can be declared? Thats 11am Monday morning Thai time I think.

bkkandrew

^Correct.

I think I am going to get a few hours kip now, as I can't see anything else happening for the next six hours. If any last-minute deal gets done it will, indeed, be at the 11th hour.

Spin

Bank of America have just announced that like Barclays, they will not do a deal either.

who

bkkandrew

Sept. 14 (Bloomberg) -- Bank of America Corp. abandoned talks to buy Lehman Brothers Holdings Inc., according to a person with knowledge of the matter, less than three hours after Barclays Plc said it wouldn't buy the faltering investment bank.

Bank of America, the biggest U.S. consumer bank, and Barclays, the U.K.'s third-largest lender, had been among the leading candidates to acquire all or parts of New York-based Lehman.

The two potential bidders pulled out amid a third day of emergency negotiations led by the U.S. Treasury and Federal Reserve, Leigh Bruce, a spokesman for London-based Barclays, said in a phone interview today.

Bloomberg.com: Worldwide

Spin

Dow futures have opened and are -314 points -2.73% at 11144.