Wall Street Journal: Lehman's Fate Darkens as Barclay's Walks Away

[marmar]

Barclays Walks from Lehman Deal;
Likelihood for Transaction Narrows


By CARRICK MOLLENKAMP, MATTHEW KARNITSCHNIG and SERENA NG
September 14, 2008 4:10 p.m.

The fate of Lehman Brothers Holdings Inc.'s darkened early Sunday afternoon after Barclays PLC, the sole remaining bidder for the 158-year-old Wall Street firm, told federal regulators that it is walking away from a transaction, people familiar with the matter say.

With Barclays ending talks and the government balking at putting any taxpayer money at risk for Lehman, the likelihood of a transaction was dimming. That would leave an orderly liquidation as the most likely scenario, a dramatic outcome for a once-powerful firm.


As word that a Barclays deal was off filtered across Wall Street, credit derivative traders scrambled to unwind their outstanding contracts with Lehman and shift their positions to other banks. CDS traders at many Wall Street firms were told to come to work immediately.

With many trading desks open, investors rushed to buy credit default swaps tied to other brokerages and corporations, sending the cost of protection on investment banks such as Goldman Sachs and others sharply higher. One senior trader said Bank of America is offering to face Lehman's counterparties in CDS trades, as long as the swaps don't reference Lehman's own debt. ......(more)

The complete piece is at: http://online.wsj.com/article/SB122139688846233147.html?mod=hpp_us_whats_news

[scarface2004]

1. i m sure sarah p has an answer!

pray for them!

[DJ13]

2. Bank of America walked away too about an hour ago

Lehmans will now have to file for bankruptcy.

[madrchsod]

3. another one bites the dust

we will have a clean slate to rebuild our economy.....