Lehman Update

Lehman is left with little options after talks to sell the firm have halted. There was said to be 3 potential suitors (Barclays, HSBC, and BofA) for the "good" part of Lehman. The "bad" part of Lehman which are poor performing loans and real estate assets were going to be absorbed by 10 large banks according to people familiar with the deal. Many of the firms are backing out of this because they don't think it's fair for them to take the bad stuff and for the other 3 to acquire the good stuff. That is a very fair point but they must realize the consequences of Lehman going under and the ramifications it will have on all the financials.

Bad news is that Barclays dropped it name from consideration and BofA is reported to be acquiring Merill Lynch. This leaves HSBC or the possibility of another bank like Goldman Sachs stepping up to the table. The prospects of a deal look don't look great anymore which put Lehman in a difficult situation. They will most likely have to declare bankruptcy and start reconciling their trades with other banks. It's going to take a miracle for Lehman to survive. Don't count the Fed out yet though because they have appeased every need on Wall Street throughout the entire crisis.