Wall Street In A Tizzy
Written by OddCulture on September 15th, 2008 in culture.
Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history.
Source: Bloomberg
The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The collapse of Lehman, which listed more than $613 billion of debt, dwarfs WorldCom Inc.’s insolvency in 2002 and Drexel Burnham Lambert’s failure in 1990.
YouTube Video: Lehman Workers Leave Building
(image courtesy of lolfed.com)
Chief Executive Officer Richard Fuld, who turned the New York-based firm into the biggest underwriter of mortgage-backed securities at the top of the U.S. real estate market, joins his counterparts at Bear Stearns Cos., Merrill Lynch & Co. and more than 10 banks that couldn’t survive this year’s credit crunch.
“There is likely to be a domino effect as other firms and individuals who relied on Lehman for financing feel the effects of its meltdown,” said Charles “Chuck” Tatelbaum, a bankruptcy lawyer with Adorno & Yoss in Florida and former editor of the American Bankruptcy Institute Journal. “The whole thing is frankly frightening for the U.S. economy.”
Don Harrold: The Storm May Be Upon Us
Gallows Humor From the Agonist:
This gem from Yahoo Finance -
Lehman Brothers Holdings, Inc. (symbol LEH)
ANALYST RECOMMENDATIONS
=====================
11-Sep-08 Citigroup: Hold
10-Sep-08 Argus: Hold
10-Jun-08 Wachovia: Mkt Perform
10-Jun-08 Credit Suisse: Neutral
24-Mar-08 Oppenheimer: Perform
McCain says it’s gonna be alright
Obama, of course, is blaming the Republicans.
Nobody wants a panic. But we’ve got one.
Nobody from the Fed has gotten ahead of this problem.
But how can the Fed and Treasury not have been in there telling AIG what to do? How can there not be a plan? How could we let free-market capitalism still run wild? It obviously failed.
How can the Fed not cut rates right now in this deflationary environment to make the deposits of banks worth more?
Free market capitalism failed? Wow, Cramer, don’t let Kudlow hear you talking like that!
Update: Shock and Anger From Lehman Employees
Source: Dealbook
After packing up their desks, many Lehman Brothers employees stopped by two bars near their Times Square office Sunday night. They could be spotted at The Palm restaurant and Playwright Tavern, many exclaiming: “$29!!”
It was just hours after it had been reported that Bank of America would purchase Merrill Lynch for $50 billion, or $29 a share. Employees expressed dismay that Bank of America chose to buy Merrill at a hefty premium, rather than purchasing Lehman at a firesale price.
“This was the place to work four years ago when I came out of school,” said an employee who works in trading at Lehman but asked not to be identified. “How could it go from THE place to work to this?”
The outlook for Lehman employees makes what happened to the people who worked at Bear Stearns look good. When JPMorgan Chase acquired Bear Stearns, they offered jobs to many of its employees and provided severance to those who were let go.
Like other investors in Bear, the company’s employees received $10 per share on their stock holdings. Lehman employees, in contrast, have no hope of getting much back on their stock, and they said last night that they feared they would receive no severance or job offers from the company.
They also focused on the little things as they passed around shots of hard liquor. “Are they going to take my BlackBerry?” one yelled out. “Come on, come get it.”
“People are just packing their things and leaving and many didn’t even come in,” said a Lehman employee leaving the London office, who asked not to be identified. “We were basically told to do our expenses and get our personal belongings.”
Update: Two Guys Making Out in Front of Lehman on CNN
Well, that’s one way for laid off employees to “console” each other.
Update: Ok, that’s Sal the Stockbroker and Richard Christy from the Howard Stern Show. Funny!
