September 18, 2019, 03:51:38 AM *
Welcome, Guest. Please login or register.

Login with username, password and session length
News: NEW CHILD BOARD CREATED IN THE POLITICAL SECTION FOR THE 2016 ELECTION
 
   Home   Help Login Register  
Pages: 1   Go Down
  Print  
Author Topic: Lehman Brothers and the Cost of Multitasking  (Read 1262 times)
0 Members and 1 Guest are viewing this topic.
WhiskeyGirl
Monkey All Star Jr.
****
Offline Offline

Posts: 7754



« on: September 25, 2008, 08:33:12 AM »

September 4, 2008, 11:04 am

Lehman Brothers and the Cost of Multitasking

Posted by Heidi N. Moore

Trying to get many things done at once often translates to getting nothing done at all.

How would they value Lehman? (Associated Press file photo)

It is the risk facing Lehman Brothers Holdings. Included in its present juggling act: an auction of all or part of its investment-management unit, which includes Neuberger Berman; a potential capital infusion from Korea Development Bank; preparations for its third-quarter-earnings announcement, expected in the next two weeks; and a potential spinoff of its toxic real-estate loans into a “bad bank” in a deal that may be sponsored by other investment firms.

Amid all that, it is getting bad news on another front, its 20% stake in Ospraie Management, which closed its flagship hedge fund today after a 38% loss in value this year.

(snip)

There are several problems posed by advancing on all fronts at once. The biggest issue for potential buyers or investors in the firm is valuation. If Lehman spins off its bad real-estate loans, it would shift its balance of assets and materially impact the value of the firm to a buyer.

If it sells the investment-management unit, Lehman would be that much smaller and KDB would have to consider how to value Lehman without that valuable arm.

The Ospraie investment is part of that investment-management unit. (Lehman distinguishes between asset management, which is Neuberger, and the bigger investment management unit, which houses Neuberger along with hedge-fund stakes and other investments.). That introduces another variable into valuing the business. Lehman executives said two years ago that Lehman limited its exposure to Ospraie in April 2006 after the hedge fund incorrectly bet copper and silver prices would fall.

Of course, for Lehman, there is upside to keeping multiple parties interested. For one thing, it shows sophisticated investors want parts of Lehman, which is good for morale. For another, Lehman gains negotiating leverage if buyers are bidding for parts of the business while the full structure of the firm is still opaque.

http://blogs.wsj.com/deals/2008/09/04/lehman-brothers-and-the-cost-of-multitasking/?mod=googlenews_wsj

Did Lehman report their 3rd quarter results?

Maybe the bad business is to toxic for anyone?   Including the U.S. government?
Logged

All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
WhiskeyGirl
Monkey All Star Jr.
****
Offline Offline

Posts: 7754



« Reply #1 on: September 25, 2008, 08:40:45 AM »

Quote
FBI probes AIG and Lehman as pressure mounts for legal action

Authorities ask whether executives knew about the dire state of firms' finances

By Stephen Foley in New York
Thursday, 25 September 2008

Investigators at the FBI are combing documents and emails related to the collapse of Lehman Brothers and AIG and the events leading to the nationalisation of Fannie Mae and Freddie Mac, as they widen the search for executive wrongdoing that may have contributed to the credit crisis.

(snip)

Quote
The FBI has already launched more than 500 prosecutions of players at the sharp end of the mortgage crisis – the mortgage brokers and appraisers who helped foist millions of inappropriate loans on people who could never afford to pay them back. It has 1,400 open investigations. Its four additional cases take to 26 the number of investigations of much larger firms. The FBI is examining whether senior executives knew more about the parlous state of their companies' finances than they let on to the public and to shareholders.

Quote
In June, the FBI charged two Bear Stearns hedge fund managers, Matthew Tannin and Ralph Cioffi, with fraud, alleging they misled their funds' investors by painting a rosy picture of their prospect when internal emails showed they believed their toxic mortgage investments could sink them. The pair deny the allegations, but even their arrest generated headlines and the first pictures of the current crisis of Wall Street executives in handcuffs.

http://www.independent.co.uk/news/business/news/fbi-probes-aig-and-lehman-as-pressure-mounts-for-legal-action-941483.html

Are these the homeowners politicians want to protect?  Those loans considered "inappropriate loans on people who could never afford to pay them back"?

Should inappropriate loans continue to be foisted on people who cannot afford to pay them back?

How many people will be able to afford housing in the future?  With the massive national debt, how many new jobs will be created?

What are the living conditions like in the average third world country?  Is that the future of the U.S.? 

Maybe the Chinese, Koreans, or oil rich countries will save us?
Logged

All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
WhiskeyGirl
Monkey All Star Jr.
****
Offline Offline

Posts: 7754



« Reply #2 on: September 25, 2008, 08:49:50 AM »

Quote
Union attacks Lehman Brothers bonus

1 hour ago

Union leaders reacted with anger to news of potential multimillion-pound bonuses for bankers at Lehman Brothers' European offices.

Nomura, the Japanese investment bank that took over Lehman's European enterprise this week, confirmed it was negotiating remuneration packages to retain top staff at the bank.

The Japanese firm did not reveal details of the terms but said they were based on "a per performance pay scale" at "a level we feel appropriate for top talent".

General secretary of the GMB union Paul Kenny said: "GMB members will be shocked and outraged by this news.

"It seems that in banking there always was a culture of being paid a bonus if you succeed, but now it seems you get a bonus if the bank goes bust.

"There is no reason for these bonuses to be paid. It is high time that the Government and the Financial Services Authority get their acts together to put a stop this."

The proposed bonuses come just four days after Barclays announced Lehman's US staff would also receive 2.5 billion US dollars in bonus payouts at the end of the year.

(snip)

The Japanese bank said it hoped to retain "a significant proportion" of the 2,500 staff employed in the businesses and did not take on any of the bank's trading assets or trading liabilities.

http://ukpress.google.com/article/ALeqM5jzDtIQ3WJTQ9R24HQXjEpU2qRxzw

Is "trading assets or trading liabilities" this the ugly piece the taxpayers are expected take up? 

Where is the U.S. taxpayer bonus in all this?

Some seem to be getting the gold, while U.S. taxpayers are getting the shaft.  imho

Is this globalization at it's best?
Logged

All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
Pages: 1   Go Up
  Print  
 
Jump to:  

Use of this web site in any manner signifies unconditional acceptance, without exception, of our terms of use.
Powered by SMF 1.1.13 | SMF © 2006-2011, Simple Machines LLC
 
Page created in 3.841 seconds with 19 queries.