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It appears that Barclays is acquiring Lehman Brothers.

The AP is reporting this story.

It appears that yet another American financial institution is being acquired by a foreign entity; in this case, Barclays is acquiring Lehman Brothers:

NEW YORK - British bank Barclays PLC intends to unveil a plan to acquire all or part of Lehman Brothers Holdings Inc.'s investment banking and trading operations, a person close to the talks said Tuesday.

While on one hand, I am relieved for the folks who stood to lose money due to Lehman related losses, it is somewhat disturbing to see another bit of the US financial market move oversees.

Furthermore, I hope that this is not spun by the right as reason why the free market works just fine, and that we need even less regulation, not more.  This whole crisis was brought about by the erosion of the Glass-Steagall Act.

Sorry about the succinctness of this diary; however, with all the discussion about what is happening in the markets and what will happen, I felt this to be germane.  

Update:  It has been pointed out that there is some ambiguity about whether Barclays will pick up all or a portion of Lehman Brothers.  The original AP article is ambiguous somewhat ambiguous.  Another report indicates that the deal "would reportedly pay just under $2 billion for the company's investment banking and trading operations and its Midtown Manhattan headquarters."

Originally posted to JRandomPoster on Tue Sep 16, 2008 at 04:03 PM PDT.

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Comment Preferences

  •  Tips for more regulation (10+ / 0-)

    How do I know what I think 'till I see what I write?

    by JRandomPoster on Tue Sep 16, 2008 at 04:04:02 PM PDT

  •  You need to check this further. (2+ / 0-)
    Recommended by:
    decafdyke, Eloise

    Their investment banking and trading is not the whole operation.  What fraction of Lehman's is this?  NPR said less than $8B.

    John McCain's vision: Having your own steamgrate to sleep on between shifts on your two jobs.

    by captainlaser on Tue Sep 16, 2008 at 04:04:52 PM PDT

    •  It isn't completely clear (2+ / 0-)
      Recommended by:
      CommiePinkoScum, MKSinSA

      The first paragraph implies that Barkleys may acquire the whole thing, or maybe just part:

      British bank Barclays PLC intends to unveil a plan to acquire all or part of Lehman Brothers Holdings Inc.'s investment banking and trading operations, a person close to the talks said Tuesday.

      But then it goes on to say:

      The third-biggest bank in the U.K. had withdrawn from weekend talks with Lehman Brothers about a possible outright acquisition. There have been reports that Barclays can pick up the assets it wants for about $2 billion to $3 billion. The deal must get approval from the bankruptcy court.

      How do I know what I think 'till I see what I write?

      by JRandomPoster on Tue Sep 16, 2008 at 04:08:05 PM PDT

      [ Parent ]

  •  Maybe Britain can govern it better than Bush did (0+ / 0-)

    Isnt our model based upon survival of the fittest?

    Seems like Bush doesnt govern very well

  •  Well, in all fairness, you did attempt to (2+ / 0-)
    Recommended by:
    decafdyke, DanK Is Back

    Sorry about the succinctness of this diary;

    flesh it out with an extra letter here and there . . .

    I am relieved for the folks who stood to loose money due

  •  This is not the whole company (0+ / 0-)

    It's just a small (and good) part of Lehman.

  •  It's a bargain for them...so long as they can (0+ / 0-)

    weather the losses they inherit until the markets are turned around sometime next year.  Also, Barclays is actually already connected to Lehman contractually, so it makes sense for them to protect themselves with the bailout.

    Once in a while you get shown the light in the strangest of places if you look at it right.

    by darthstar on Tue Sep 16, 2008 at 04:10:17 PM PDT

  •  I hope Barclays knows what they are doing... (0+ / 0-)

    I have money with them. I was so relived when I hear they were passing up the offer to but Lehmans. I hope the people at Barclays no what they are doing.

    All I know is what I read in the newspapers. Will Rogers

    by Tulsonian on Tue Sep 16, 2008 at 04:12:22 PM PDT

  •  Barclay's is not (0+ / 0-)

    going to buy all of Lehman Brothers in all likelihood.  Barclays will happily take the good stuff, and leave all the bad stuff behind.  It's par for the course, and explains the collapse of the Barclays/Lehman talks that took place before Lehman's filed for bankruptcy.  So, while many people won't have to worry about losing their jobs, the financial sector is still in a great deal of trouble.  See, AIG.

  •  "Certain assets" -- they're looking (1+ / 0-)
    Recommended by:
    Inky99

    to lap up any cream.

    An interesting little factoid is that 25.7% of Barclays ADR is held by Qatar Investment Authority.  

    What FDR giveth; GWB taketh away.

    by Marie on Tue Sep 16, 2008 at 04:17:44 PM PDT

  •  Probably another scam (2+ / 0-)
    Recommended by:
    mattman, wayoutinthestix

    Remember with Bear Stearns, when the stock dropped to rock-bottom, then after a couple of days it shot up a few points?

    Somebody made out like a bandit on that.

    Probably the same thing happening again.  They probably agreed to take it over on Sunday, but told the world they were backing out, so the stock price would totally collapse.  Now they'll announce this, the stock price might even double (although still be super-low, but double is double!) and they've probably spent the last two days quietly buying up tons of stock for peanuts, which will now double (or whatever) and they'll have gotten just tons of stock for peanuts.

    Nice work if you can get it.

    Foxes guarding the henhouse.  Raiding the henhouse.  LOOTING the henhouse.

    •  Foxes... (0+ / 0-)

      Foxes guarding the henhouse.  Raiding the henhouse.  LOOTING the henhouse.

      The scary things about these foxes is how many people thing that they are "their" foxes.  They convinced too many people that they would profit with less government involvement in the financial industry, and less regulation thereof.

      How do I know what I think 'till I see what I write?

      by JRandomPoster on Tue Sep 16, 2008 at 04:25:37 PM PDT

      [ Parent ]

  •  Barclay's will cherry-pick. (0+ / 0-)

    BushCo™ will let them make off with the handful of worthwhile assets that can be plucked from this flaming shitpile, so they can claim a successful 'rescue'. Meanwhile, the toxic debris after all the manure has burned down to ground will be handed to...yes! The American taxpayers yet again.

    •  BushCo doesn't have a say. (0+ / 0-)

      By filing for Chapter 11, Lehman Brothers put themselves into the hands of a bankruptcy court judge and a U.S. District Court judge to whom bankruptcy court judge rulings can be appealed, plus a U.S. magistrate judge or two, and a few law clerks, and a lot of expensive lawyers on the case.

      The U.S. interest is primarily as a tax creditor, and almost all U.S. interests including that one, have priority in bankruptcy court, and hence are basically non-negotiable.

      Chapter 11 basically takes federal reserve money off the table, or at least, makes it harder to get directly.

      One of the more likely scenarios may be for the operational part of the business to be sold to Barclays in this deal, and for Lehman Brothers' investment portfolio to be sold piecemeal.

      Some investments would probably sell at close to their true value, while the mortgage backed securities portfolio is likely to be sold at a firesale price -- quite possibily to Fannie or Freddie providing some indirect Federal involvement in a piece of the case, but not a major direct subsidy.

      "Those who can make you believe absurdities can make you commit atrocities" -- Voltaire

      by ohwilleke on Tue Sep 16, 2008 at 05:26:20 PM PDT

      [ Parent ]

  •  Investment banks do several things. (0+ / 0-)

    A brokerage operation invests others people's money based upon their individualized instructions with broker advice in separate accounts.

    Another thing an investment bank does is act as midwives for initial public offerings of stock by working out the terms of the deal, hiring major law firms and accounting firms to do due diligence on the deal for a prospectus, and shopping IPO shares to a consortium of broker-dealers who in turn get different pieces of the total deal to offer to their own customers.  In exchange for this they get a fee.

    A third thing that investment banks do is to make investments on their own account in highly leveraged deals (typically far more leveraged than commercial banks are allowed to make).  Sometimes they do this by participating in someone else's IPOs and sometimes they make up their own deals.

    My suspicion is that Barclays wants to acquire the first two parts of the operation, buy not the last one.

    "Those who can make you believe absurdities can make you commit atrocities" -- Voltaire

    by ohwilleke on Tue Sep 16, 2008 at 05:21:41 PM PDT

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