Lehman Brothers bank to go into insolvency (maybe)

[aceboy]

The ML news is being viewed by the market as a positive. The BOA / ML merger will create a major power house on wall street...

[eliquant]

Well I mean at the end of the day we've seen it all before Barings collapsed and just got sold off to ING and they took the good parts of the business, same goes for Natwest Markets (remember them), they had bits of their company sold off and eventually bought by RBS.

Its not the end of the world or the financial world, they were just misfortunate in investing heavily in mortgage backed assets.

[BrilloPad]

Well I mean at the end of the day we've seen it all before Barings collapsed and just got sold off to ING and they took the good parts of the business, same goes for Natwest Markets (remember them), they had bits of their company sold off and eventually bought by RBS.

Its not the end of the world or the financial world, they were just misfortunate in investing heavily in mortgage backed assets.

greedy

some of these were to ninjas. even some of the "prime" mortgages were lent with no proof of income. sometimes resets were years away so is probably more bad debts in the pipeline.

but the bonuses on the "profits" are already taken and are unlikely to be reclaimed back leaving the government and customers to pick up the mess.

I guess the rich have been screwing the poor for all time - its unlikely to change much.

[sappatz]

lehman

this Is The Largest Bankruptcy In Us History
This Day Will Be Marked In Stone

[KentPhilip]

.. and poor old New Lie scapegoat Northern Rock had no US-Subprime. All they wanted was a short-term loan after money-markets dried up, but Mervyn King in his wisdom initially refused, causing a bank run, draining 14 Billion from savings, which is virtually the amount that they now owe in loans to the BofE. At least the US government is trying to help its banks rather than kill them through ineptness and starvation of funds.

Mervyn King was right to refuse them a loan. Northern Rock took a risk by running its business in a way that required money market loans, so if they dried up then Northern Rock should go bust.

What has happened now that the government has bailed them out is that the taxpayer has to pay more, and benefits such as the NHS will be hammered.

[Cyberman]

I think the news on Merrill Lynch is just as significant.
Who next? FTSE down 2.5% already.

Don't panic! DON'T PANIC!!!

I'm pretty sure I know, but commonsense prevents me from posting the name of a massive bank on here. Suffice to say, it is not HSBC, who I bank with.

[Cyberman]

Mervyn King was right to refuse them a loan. Northern Rock took a risk by running its business in a way that required money market loans, so if they dried up then Northern Rock should go bust.

What has happened now that the government has bailed them out is that the taxpayer has to pay more, and benefits such as the NHS will be hammered.

All of our banks are run in this way, but our authorities pretend otherwise, and the BofE and HMG have been busy bailing others out secretly for months, and thus another is going to fail very soon, as the amounts required are so enormous.

[Cyberman]

Mervyn King was right to refuse them a loan. Northern Rock took a risk by running its business in a way that required money market loans, so if they dried up then Northern Rock should go bust.

What has happened now that the government has bailed them out is that the taxpayer has to pay more, and benefits such as the NHS will be hammered.

So has Mervyn King been wrong to give loans to all banks since then ? Have the other Central Banks been wrong to do the same ?
Giving short-term loans as long as the banks have assets to cover the loans is the obvious thing to do. Northern Rock was making a profit and assets far exceeded liabilities. Drying up of money markets had nothing to do with that bank at all, but was due to other banks overwhelming subprime losses.

[dude69]

ouch.

Just to be 100% sure, does this now mean that there are hundreds of unemployed ex-Lehman computer programmers here in London? That can't be good for rates, another 10% off?

[DaveB]

ouch.

Just to be 100% sure, does this now mean that there are hundreds of unemployed ex-Lehman computer programmers here in London? That can't be good for rates, another 10% off?

LB had around 5000 UK staff, so it's a fair bet that a good number of them were in IT.