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"Lehman Brothers essentially committed suicide. Its head, Mr. Fuld, had many offers from Korea and from investment banks in the US to take it over. He tried to bluff them. He tried to say, "Crisis? What crisis? Our loans are perfectly good. We haven't lost a penny. We want you to pay at the book value of what we say our loans are worth."
But no one believed it, and why should they. "These are guys who like to wipe out their partners, like to wipe out people they are doing business with. He (f'd) the whole firm and wiped out the shareholders (saying) 'We're too big to fail.' " Was Fuld complicit in a deliberate scheme to bring down Lehman, and if so why?
Apparently, he profited hugely, and so did the Street by removing a key competitor. First Bear Stearns, then Lehman. According to Brown:
"Although Lehman Brothers filed for bankruptcy on Monday, September 15, 2008, it was actually 'bombed' on September 11" when it was hit by the "biggest one-day drop in its stock" the result of manipulative naked short-selling and apparent sabotage to prevent the company from negotiating a deal to be bought. The UK-based Barclays Bank was interested and was willing to underwrite Lehman's debt.
But as Brown explained:
It "needed a waiver from British regulators of a rule requiring shareholder approval. (However,) UK Chancellor of the Exchequer Alistair Darling" stonewalled long enough to prevent it. He did the same thing with Britain's Northern Rock and "changed the rules of the game" by opening the spigot in both countries for open-ended bailouts for banks too big to fail.
Again, why so and cui bono? It "suggests that Lehman Brothers (Northern Rock and others) did not just fall over the brink but (were) pushed." The likely reasons were to engineer the financial crisis, create an emergency, pressure Congress (and the UK government) to provide billions in rescue funding, give selected major banks in both countries more power to consolidate, then use bailout proceeds to buy choice assets on the cheap plus reward themselves handsomely for their cleverness.
It's not new with numerous past examples of predatory bankers, including JP Morgan, engineering financial crises for profit. The difference is that today the stakes far higher and global with US giants Goldman Sachs, JP Morgan Chase, Citigroup, Bank of America, Wells Fargo, and Morgan Stanley the major survivors - bigger and more powerful than ever, and so far thriving with open-ended bailouts.
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