Lehman Brothers Holdings Inc., a diversified, global financial-services firm founded in 1850 by Henry Lehman, a Jewish-German-American businessman, son of a Bavarian Cattle merchant is going belly up. The troubled firm was in negotiations for a buy-out by Barclays and Bank of America (amongst others). Those negotiations fell through today and it looks like the firm is not going to survive. This will throw 26,000 people out of work and wreak quite some havoc on the financial markets.
“I think the most likely option for Lehman is a bankruptcy filing by the end of the day today,” said Peter Cohan of the consulting firm Peter Cohan & Associates… Barry Ritholtz of the research firm FusionIQ said a bankruptcy could mean further financial market turmoil… “We are now on bankruptcy watch, with the midnight hour as the key line in the sand.” he said. “The Wall Street open Monday in the event of a Lehman failure will be wild.” … According to some analysts, the talks on Lehman Brothers were snagged over whether the Federal Reserve would guarantee a deal with Lehman’s troubled mortgage securities as was done to avert a meltdown earlier this year of Bear Stearns, bought by JPMorgan Chase.
It’s going to be a blood bath tomorrow on Wall Street. Yikes.