Posts filed under “Bailouts”

Lehman Bailout This Weekend?

Rumors circulating amongst several hedgies are that KKR and Blackstone are interesting in taking a bid at Lehman. Note that Blackstone is run by Peter Peterson and Steve Schwartzman, former Lehman Brothers guys.

The scuttlebutt is that the private equity boys are looking for a Fed backstop, and want a Bear Stearns-like deal, with Fed/Treasury taking on $20-40 billion dollars in risk. So goes the circulating rumors amongst the Long/Short crowd.

The WSJ noted:

"Given the firm’s deep financial troubles, a deal of any sort is far from certain, according to people familiar with the situation. In addition, prospective buyers would likely want the U.S. government to help shield them from future losses from any such transaction, these people said, as happened in March, when Bear Stearns Cos. was forced into a deal to be acquired by J.P. Morgan Chase & Co. In that deal, the federal government agreed to absorb as much as $29 billion in potential losses."

Other rumors today included Bank of America making a run at Lehman brothers. Recall their CEO, Ken Lewis, said back in October 2007: "I’ve had all of the fun I can stand in investment banking at the moment." Is he ready for more fun? I guess if you define LEH at $4 as fun, he might be tempted back to the iBank pool.

Here’s a more neutered version of the story, via Washington Post:

"The Federal Reserve and Treasury are actively helping Lehman Brothers put itself up for sale, and officials are hoping a deal will be in place this weekend before Asian markets open on Monday, according to sources familiar with the matter.

The government is looking for an agreement that would not involve public money. One scenario that is emerging includes multiple suitors acquiring different pieces of the venerable investment bank, which has suffered staggering losses from its business in real estate and mortgages.

The situation was still fluid tonight, and there was no guarantee what form an agreement would take, or even that it would be in place by Monday, the sources said on condition of anonymity because they had not been authorized to speak."

We will find out soon enough.

If its Sunday, it must be Bailout.



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Sources:

Lehman Races to Find a Buyer 
Bank of America Is Said To Be in Preliminary Talks; U.S. Plays Matchmaking Role
MATTHEW KARNITSCHNIG, CARRICK MOLLENKAMP, SUSANNE CRAIG and ANNELENA LOBB
WSJ, September 12, 2008      
http://online.wsj.com/article/SB122116292232524671.html

I’ve had all the fun I can stand in investment banking, says the boss of Bank of America
Stephen Foley
The Independent, 19 October 2007
http://www.independent.co.uk/news/business/news/ive-had-all-the-fun-i-can-stand-in-investment-banking-says-the-boss-of-bank-of-america-397294.html

U.S. Government Helping to Arrange Sale of Lehman Brothers
David Cho and Heather Landy
Washington Post, September 11, 2008; 7:39 PM
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/11/AR2008091102580.html

Category: Bailouts, Credit, M&A, Valuation

Put Some More Lipstick on These Pigs

It ain’t just Lehman, Fannie and Freddie: There are plenty of other Pigs in the sea. > Washington Mutual (WM) We are long this — my trading desk has been trying to bottom tick this today — but I don’t like it as anything other than a trade. > American International Group (AIG) We are…Read More

Category: Bailouts, Corporate Management, Credit, Short Selling, Valuation

Ackman on Freddie, Fannie bailout

Ackman on the GSE Bailout

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Ackman 

Wed. Sept. 10 2008 | 8:06 AM[12:29]

Perspectives on Lehman, Fannie & Freddie, with Bill Ackman, Pershing Square Capital Management managing principal

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Financial Crisis

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Ackman_faber_2

Wed. Sept. 10 2008 | 8:35 AM[05:06]

Discussing the ensuing financial crisis and the risk of global recession, with Bill Ackman, Pershing Square Capital Management; Nouriel Roub…

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Parting Shots

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Ackman_roubini

Wed. Sept. 10 2008 | 8:57 AM[02:23]

Final thoughts, with Bill Ackman, Pershing Sqare Capital Management and Nouriel Roubini, RGEMonitor.com

Category: Bailouts, Credit, Video

“Each crisis has been followed by a bigger crisis…”

Category: Bailouts, Federal Reserve, Markets, Technical Analysis, Trading

“Each crisis has been followed by a bigger crisis…”

Category: Bailouts, Federal Reserve, Markets, Technical Analysis, Trading

“Each crisis has been followed by a bigger crisis…”

Category: Bailouts, Federal Reserve, Markets, Technical Analysis, Trading

Nice discussion via Charlie Rose: Floyd Norris, Mohamed El-Erian, Gretchen Morgenson, Nouriel Roubini discuss the world’s biggest bailout: Fanny Mae and Freddie Mac

 

Hat tip, Paul!

Category: Bailouts, Credit, Video

GSE Honeymoon Is Over

Category: Bailouts, Credit

Gross on PIMCO’s Fannie Trade

Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., talks with Bloomberg’s Tom Keene and Pimm Fox about the impact of the U.S. government’s takeover of Fannie Mae and Freddie Mac on Pimco’s business and mortgage debt, and the outlook for Federal Reserve monetary policy.

click for video

Gross

00:01 Impact of Fannie, Freddie takeover on Pimco
02:18 Effect on housing market; foreign investors
04:24 Reasons behind takeover; Fed monetary policy
06:18 Outlook for U.S. mortgage market
Running time 07:36

Last Updated: September 7, 2008 21:21 EDT

Category: Bailouts, Video

Gross on PIMCO’s Fannie Trade

Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., talks with Bloomberg’s Tom Keene and Pimm Fox about the impact of the U.S. government’s takeover of Fannie Mae and Freddie Mac on Pimco’s business and mortgage debt, and the outlook for Federal Reserve monetary policy.

click for video

Gross

00:01 Impact of Fannie, Freddie takeover on Pimco
02:18 Effect on housing market; foreign investors
04:24 Reasons behind takeover; Fed monetary policy
06:18 Outlook for U.S. mortgage market
Running time 07:36

Last Updated: September 7, 2008 21:21 EDT

Category: Bailouts, Video