Bailouts and buyouts

[cjsmith]

Bear Stearns got a government-orchestrated purchase.
Fannie and Freddie got a Federal takeover.
Merrill Lynch got a government-orchestrated purchase.
"The free ride is over", people said as Lehman was left out to hang.
But today AIG got an $85 billion Federal bailout.

What's with Lehman? Did Dick Fuld piss off Henry Paulson or something?

Comments

[cjsmith.livejournal.com]

Bear and Merrill were both bigger than Lehman?

[530nm330hz.livejournal.com]

It's not just the size, it's how much B2B stuff they do, rather than B2C. Bear was a clearinghouse for a large percentage of inter-institutional trades; if they'd gone under the whole financial system would have been frozen for a week or two.

I don't know the deal with Merrill but I think in this case it was more a question of Merrill taking advantage of a way out before things actually reached the acute crisis stage.

[cjsmith.livejournal.com]

Ahh, so part of it is how tied in they are to the other surviving linchpins?

I do know Lehman had some offers earlier in the summer and turned them down, thinking they could do better. Guess they lost that gamble.