Barclays Withdraws From Lehman Talks Over Credit Guarantees

[ancient_nomad]

Source: Bloomberg

Sept. 14 (Bloomberg) -- Barclays Plc, the U.K.'s third- biggest bank, pulled out of talks to buy Lehman Brothers Holdings Inc. because it could not agree on terms to ring fence troubled assets at the U.S. investment bank.

Barclays dropped out of discussions to buy all or parts of New York-based Lehman because it could not secure guarantees from the U.S. government or agree on terms to mitigate potential losses in the firm's investment banking division, a London-based spokesman for Barclays said in a telephone interview today.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aZvzZVTCUEKs&refer=home

---

This is not good. I dread what is going to happen this coming week.

[susu369]

1. This is confusing - I just read "Barclay's emerges as buyer"

http://news.yahoo.com/s/ap/20080914/ap_on_bi_ge/lehman_brothers

Lehman talks continue as Barclays emerges as buyer
By JOE BEL BRUNO and MARTY CRUTSINGER, AP Business Writer
57 minutes ago

Government officials and top Wall Street bankers continued talks Sunday in a harried effort to sell Lehman Brothers Holdings Inc. and avoid a collapse of the beleaguered investment bank that could severely disrupt global markets.

Barclays PLC, Britain's third-largest bank, has emerged as the most likely suitor to take over Lehman's good assets, which include investment banking, trading and asset management, according to bankers and officials with direct knowledge of the discussions. They spoke on condition of anonymity because talks were ongoing.

-snip-

Government officials want to avoid a Bear Stearns-like bailout; the Fed in March agreed to provide a loan of nearly $29 billion as part of JPMorgan Chase & Co.'s takeover of the firm. Unlike Bear, Lehman can go directly to the Fed to draw emergency loans if it needs a quick source of ready cash. In recent weeks, though, there's been no indication that Lehman has done so.

Bear's sudden meltdown led the Fed to engage in its broadest use of lending powers since the 1930s. Fearful that other companies could be in jeopardy, the Fed temporarily opened its emergency lending program to investment firms, a privilege that for years was granted only to commercial banks, which are subject to tighter regulation.

Those actions — along with the Bush administration's takeover of mortgage giants Fannie Mae and Freddie Mac just last week — have spurred concerns that taxpayers could be on the hook for billions of dollars and companies will be encouraged to take on extra risks because they believe the government will come to their aid.

==

:shrug:

[SahaleArm]

2. Barclays emerged as a buyer late last night, withdrew this afternoon.

The Lehman liquidation (fire sale) begins tomorrow.

[susu369]

4. Thanks

so much for Yahoo's top stories being current.

[ancient_nomad]

5. It is confusing....

I first learned of this through a NYTimes Breaking News Alert in my e-mail. When I fist clicked on the e-mail link, it was across the top of the Times as a red banner with no link. Checking the Times about 10 minutes later, the story posted was similar to your Yahoo link. I then checked Bloomberg, and got the story I posted. It is still the top breaking news story on Bloomberg. See this link:
http://www.bloomberg.com/index.html?Intro=intro3

[Speck Tater]

3. Lehman must be allowed to fail.

The government cannot afford to prop up businesses that fail due to their own greed and stupidity. Sure, a lot of people will be hurt financially if Lehman collapses. BUT this whole greed-based, no-regulations philosophy of the GOP is failing, and it MUST be seen by the public as a failed political philosophy. Propping up Lehman just postpones the problem, possibly until AFTER the election when it could be too late if McCain pulls out a win.

Lehman is fated to collapse. It must be allowed to collapse into order to cleanse the economy of toxic greed, and to show the American people the REAL consequences of the GOP version of fiscal management.

If it fails, Obama has a better chance because Bush's failure on the economy will be all the more evident. If it is saved then the Bush team gets a free pass on their economic bungling, and McCain still stands a chance of being elected.

[ancient_nomad]

6. I agree Lehman must be allowed to fail.

The people of this country need a big wake-up call. I have been trying to tell many friends the unbelievable situation this country is in economically. Many just pass it off as "oh well". I was reading Roubini's blog, where he says if Lehman fails, there goes Merrill Lynch and AIG. When that happens, it will hit a lot of people.

[Pale Blue Dot]

8. I believe that, starting tomorrow, the American people will be forced awake.

This is not going to be pretty.

[shaniqua6392]

9. Some of us have been awake for a long time.

We can see that Bush is trying to put bandaids on the blood gushing economic disaster that he made. He was hoping the whole thing would hold on until a Dem got in the White House. That way they could make it look like Dems are weak on the economy. Well, as it turns out, Republicans are the ones who are weak on the economy and rack up the worst debts in history. Conservatives, my ass. I don't give a shit if the stock market crashes right now. Maybe that is what it will take for Americans who are even remotely considering voting for McCain to see the truth. The media should not decide who are leaders will be.

[LBJDemocrat]

7. Too fucking bad.

I hope that the taxpayer doesn't end up bailing them out. Let the will of the free market be done.

:nopity:

[54anickel]

10. What pisses me off whenever this sort of shit goes down is that these supposed

lessons learned about needed regulations ALWAYS comes on the backs of the little guys trying to stay ahead of the game with their measly 401Ks and IRAs. The bastard's in charge get their severance whilst we all get the shaft. It's not as if they can seriously say they never saw it coming. There's been lots of folks screaming, both inside and outside the loop.

http://www.iht.com/articles/2008/09/14/business/barclays.php
Barclays chief's predictions on Wall St. banks appear vindicated

LONDON: For many years now Robert Diamond Jr., the president of Barclays Bank, has proclaimed that the days of the stand-alone investment bank were numbered. A former top banker at Morgan Stanley, he left his old firm in 1996 to develop an investment banking business for Barclays in London.

His cocksure demeanor and his contention that the risky lending and borrowing practices of firms like Bear Stearns, Lehman Brothers and even Merrill Lynch would eventually come back to haunt them, won him few friends in the clubby world of Wall Street's elite bankers.

But, after three days of around the clock negotiations at the Federal Reserve Bank of New York trying to find a way to absorb Lehman Brothers investment banking business into Barclays, Diamond and his team of bankers decided early Sunday afternoon that the risk was too great and walked away from a deal.

According to executives briefed on the negotiations, Barclays could not get a commitment from the U.S. government that it would guarantee Lehman's counterparty settlements - a figure that could well exceed $50 billion. According to securities law here, Barclays would have had to get approval from shareholders to offer such a guarantee itself.

A deal can always be revived, but the U.S. Treasury's hard line in not providing financial support for Lehman is an indication that the administration of President George W. Bush is adamant about leaving the future of Lehman to the markets.

snip>

Bear Stearns is no more, Lehman Brothers faces the prospect of liquidation and U.S. government officials and investors now worry that Merrill Lynch - after a 12 percent slide in its shares Friday - could be next.

more...