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ralphmalph

Anybody Watching Cnbc

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Its true, its our fault. Barclays refused to buy them up at the 11th hour.

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Anybody shed some light on this he says the money was locked up in London. By who our own econmic genius Brown?

What happened was that the Chancellor prevented Barclays from mounting a last minute rescue.

Good job too, it would probably have brought down our entire system. Perhaps that was the plan.

For that one thing, we should spare Darling the noose.

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I believe Barclays wanted UK Govt help, hence the Uk taxpayer put on the line.

I think Alistair Darling did the right thing in this case.

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I believe Barclays wanted UK Govt help, hence the Uk taxpayer put on the line.

I think Alistair Darling did the right thing in this case.

It was a two fold problem:

Shareholders had to be given the right to decide on the takeover and Darling refused a waiver to enable Barclays to do the deal.

Darling also refused to back stop Barclays purchase of Lehman (as Barclays were a UK entity) and the US refused to do so for the same reason. I would bet my last cent that if Darling and the Bald Eagle were given their time again they would have underwritten this deal.

Rightly or wrongly, the view that IB's should be taught a lesson, that someone had to fail to prove a political point was bloody expensive and near catastrophic. It may have been morally or ethically right, but when you've started to steer a course where you bail out one bank, you bail out all the others. Something that they ended up doing anyway.

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Anybody shed some light on this he says the money was locked up in London.

By who our own econmic genius Brown?

I recall something about this. Lehman's had money in London. Just before they went bust, they were trying to move it all back to the US, in a desperate attempt to stay afloat. The UK managed to stop some if not all of the money going, as the regulators/authorities knew that money had to be used to pay UK creditors of Lehman's.

All of this moving money around stuff is very confusing, I have no idea what the rules are. I bet what Lehmans were trying to do was illegal, but that fact becomes irrelevant when you are facing bankruptcy. Illegality is a risk worth taking. The UK also stopped a lot of the Icelandic banks from taking money out of the UK as well, for the same reason. Bit if controversy over that as they used anti-terror laws to stop the Icelanders from committing an offence of their own, I am not sure what happened in the case of Lehmans.

Now cos Lehmans couldnt get their hands on the UK money, it would have speeded their downfall, but not by much, they were doomed anyway. Committing theft (or some sort of crime, it was certainly a crime though I dont know the best name for it, fraudulent conveyance perhaps) by taking money from one business and giving it to the other may have kept one afloat temporarily, but it would have left a nasty hole in the UK's banking system. It shows the kind of people they were, as such actions could have destroyed the UK economy, but they thought only of their own skins, not the people of the UK.

As for the tosh that this was what caused the demise of Lehmans, well I think someone needs to get their facts straight. Lehmans had a load of dodgy assets that were worth far less than they were marked at. The market knew it, wanted to withdraw their money, and only a massive capital injection would have saved them. But whoever gave them that capital injection was bound to lose money, as the first chunk of capital you put in would immediately dissolve into losses. Lehmans had levered itself up to 40 - 1, and any bank that does that is sure to go bust sooner rather than later, as the chance that 2 1/2 % of your assets will go bad is pretty high, and you only need a fear of that to cause a run.

Blaming anyone else is just childish, it was the fault of the Board of Directors, and Dick Fuld in particular. He was quoted as saying that he wondered constantly what he could have done different. Well how about not lending so much and being careful about who you lend to?

The UK government did the right thing. It stopped money being taken out of the UK (almost certainly illegally), and it refused to lend UK taxpayers money to underwrite an unknowable financial black hole in a currency that it couldnt control.

Score 1 Alistair Darling.

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Anybody shed some light on this he says the money was locked up in London.

By who our own econmic genius Brown?

Becasue when bank of america decided to buy another bank instead, the only bank left interessted in buying lehmans was barclays.... because neither the BOE or the fed was willing to underwrite their trading book then barclays couldn't proceed... they ended up getting the bits they wanted for 10 cents on the dollar. It was quite right of the UK not to guarantee their trading book as it was an American bank.... whether it was right or wrong of the fed to have stood with their hands in their pockets is another matter.

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