Today Lehman Brothers was allowed to fail, not bailed out like BearStearns or FreddieMac or FannieMae. Why? The fact that it is the largest U.S. corporate bankruptcy to date (see list below) cannot be the whole story. After all, we are often told that huge corporations, like GM, are too big to be allowed to fail.
So here is a thought I'm tossing out for consideration: Perhaps Lehman Brothers was not bailed out because of who their major investors were (or weren't). In BearStearns case, the Carlyle Group was involved (through Carlyle Capital). Carlyle is closely tied to the Bush family and Saudi royals. Maybe this is just a coincidence, but I can't find any google route into Lehman Brothers List of Top Shareholders to verify or debunk who their major investors are. Maybe they are people or firms without clout in our neocon world. Maybe they are competitors with Bush-Saudi interests for oil domination. Maybe maybe maybe the "Line in the Sand" (today's official talking point) is really just Bushit.
List of biggest U.S. corporate bankruptcies:
Lehman Brothers Holdings Inc.’s Chapter 11 filing is by far the largest corporate bankruptcy case in the U.S., measured by total assets before the filing. Lehman Brothers filed for Chapter 11 bankruptcy protection Monday after falling under the weight of $60 billion in soured real estate holdings. Its filing listed $639 billion in assets as of May 31.The list includes the date of the company’s bankruptcy filing and its assets at the time of filing...
1. Lehman Brothers Holdings Inc., Sept. 15, 2008, $639 billion
2. Worldcom Inc., July 21, 2002, $103.91 billion
3. Enron Corp., Dec. 2, 2001, $63.39 billion
4. Conseco Inc., Dec. 18, 2002, $61.39 billion
5. Texaco Inc., April 12, 1987, $35.89 billion
6. Financial Corp. of America, Sept. 9, 1988, $33.86 billion
7. Refco Inc., Oct. 17, 2005, $33.33 billion
8. Global Crossing Ltd., Jan. 28, 2002, $30.19 billion
9. Pacific Gas and Electric Co., April 6, 2001, $29.77 billion
10. UAL Corp., Dec. 9, 2002, $25.2 billion
11. Delta Air Lines Inc., Sept. 14, 2005, $21.8 billion
12. Adelphia Communications, June 25, 2002, $21.5 billion
13. Mcorp, March 31, 1989, $20.23 billion
14. Mirant Corp., July 14, 2003, $19.42 billion
15. Delphi Corp., Oct. 8, 2005, $16.59 billion
Source: The Associated Press
Updated: 2:54 p.m. ET Sept. 15, 2008© 2008 MSNBC.com
Did you notice something funny about that list? All but 3 of the 15 largest US corporate bankruptcies in history took place during the GWBush Administration! The 3 outliers took place during the waning days of Reagan and beginning of GHWBush. Those Repubs sure know how to bring down the house!
But don't get me wrong. I'm not saying Lehman Brothers didn't deserve to fail. I'm just questioning why them and why not BearStearns? I'd be willing to hazard a guess that none of the largest shareholders of Lehman Brothers is named Bush or Cheney or Carlyle. Please correct me if you have shareholder info.
Now here's another thought: the BofA spokesman interviewed on Bloomberg today predicted that by this time next year, the number of surviving US banks will be 50% of the current apprx 9,000 US banks. He should know. His company has been in the bank gobbling business for years. Last year BofA acquired MBNA (another Bush-Carlyle investment). Today they acquired Merrill Lynch. Both BofA and Barclay's Bank passed on Lehman Brothers.
There is a very important reason you should be watching which banks are gobbling up the banks you do business with. That reason is FDIC-insurance limits. Your money is only insured up to the FDIC limit for each banking institution (link to FDIC limits). You may find yourself unintentionally exceeding those limits if a few of your banks are merged into one mega bank in the coming financial shake-out.
Well, that's my financial tip of the day, inspired by comments at Enigma's "Black Monday" post. Soon we will see the predictably weak Fed response of lowering interest rates which will further erode the US Dollar (not to mention further impoverishing those living on fixed incomes). It seems to be all they can think of to do!
UPDATE 9/16/08: LindsayLobe found the VIP shareholder info ... read his & my response in the comment thread ... I think we are onto something about why one investment firm was bailed out, but not the other. Thanks, Lindsay!