Monday, September 15, 2008

No Bailout for Lehman as Fed Awakens to Bond Market Crash Risk

No Bailout for Lehman as Fed Awakens to Bond Market Crash Risk

Noises emanating from Hank Paulson at the US Treasury department over the weekend of having drawn a line against an effective bailout of the bankrupt investment bank, this will not live up to bidder expectations of providing tens of billions of tax payers money so as to enable a relatively risk free takeover by other banks, this therefore results in suitors in advanced talks such as Barclays now declaring their withdrawal from a possible weekend bid for the bank and indicates that Lehman's is now heading directly towards bankruptcy

Posted by nadeem walayat @ 10:02 AM (531 views)
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2 thoughts on “No Bailout for Lehman as Fed Awakens to Bond Market Crash Risk

  • planning4acrash says:

    This is the best news. No bail out, means less money available, means less money for criminal directors of Lemans, means a better price for those buying them out. Let the market decide. Remember that the bond market is MASSIVE!!! Loosing Northern Rock is like breaking a toy car in the toy shop or high street of toyshops of bond holders.

    “the apparent action NOT to bailout Lehman’s is actually a panic move, under normal circumstances the US Treasury and Fed WOULD bailout Lehman’s” “In conclusion, we are witnessing panic moves by the US government and worlds central banks on literally an hourly basis in the face of a potential wave of bank failures as I have pointed out several times over the last 6 months that most of the big western worlds banks are bankrupt, insolvent, and the only thing thing that will keep them afloat is a flood of tax payers money with all of the economic consequences associated with running huge budget deficits at the same time as the credit markets contract, which implies economic depression. ”

    – I tend to agree. Globalised fiat has never occured before, and the advent of internet and electronic trade makes it far more sensitive to manipulation, so, you have chaos where a butterfly stroke can trigger a hurricane. I think they brought it down too quick. Lets see whether it manifests prior to the election. NOTE that NONE of the two party dictatorship are discussing this!! They still state that (t)errorism is the biggest threat!

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  • Good news that there was no bailout I agree. I doubt it was moral hazard they were worried about either. It is solvency of the US Government that is at stake now. Pretty soon investors are going to turn away from US Government debt as toxic I think.

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