Us Bank Files For Bankruptcy

[Boater]

LEHMAN Brothers, one of the world's largest investment banks, announced today it plans to file for bankruptcy protection - a move expected to rock global financial markets. The stricken firm said it intends to file a petition under Chapter 11 of the US Bankruptcy Code.

Catastrophic

The measure usually allows companies to reorganise their contractual and debt obligations under the supervision of a bankruptcy court.

The bank was close to collapse last night after Barclays abandoned plans to buy it.

Lehman said in a statement: "The board of directors of Lehman Brothers Holdings International authorised the filing of the Chapter 11 petition in order to protect its assets and maximise value."

Lehman Brothers is America's fourth biggest investment bank but last week announced a quarter-year loss of £2.2billion.

In the UK, Lehman employs staff at its regional headquarters in Canary Wharf, London, as well as its office in High Wycombe, Buckinghamshire. Globally the group has around 25,000 staff.

Barclays had hoped to cherry-pick its profitable parts.

But bosses walked away from talks because they could not get guarantees from the US government and were worried about being lumbered with potentially huge payouts.

Another possible buyer, the Bank of America, also decided against a move.

One financial expert said: "This could be catastrophic and lead to the implosion of the banking sector."

Fears deepened yesterday when US stocks tumbled, pointing to a sharply lower Wall Street opening today.

In a separate move to help shore up the financial markets, Bank of America has announced a $50billion (£28bn) deal to buy Wall Street giant Merrill Lynch, which has also been stung by the credit crunch.

Lehman is the latest financial institution to fail.

Struggling mortgage giants Freddie Mac and Fannie Mae were taken over by the US government last week.

But Treasury secretary Hank Paulson has ruled out a rescue of Lehman Brothers.

The overnight developments are set to put financial stocks under pressure when the London Stock Exchange opens for business later this morning.

Edited September 15, 2008 by Boater

[midas]

I was thinking today, I wonder how much of this mess can be attributed to

" derivatives "...........? A friend of mine involved in investment banking

warned me as far back as 1989-1990 that the danger to the world markets

was derivatives................

[Pakboong]

I was thinking today, I wonder how much of this mess can be attributed to

" derivatives "...........? A friend of mine involved in investment banking

warned me as far back as 1989-1990 that the danger to the world markets

was derivatives................

I don't see how the DOW can remain above 11,000. I guess the pending Fed Meeting on interest rates is holding it up.

[T_Dog]

The post title should be "A US Bank", not "US BANK..." which is a popular bank in the USA.

[beejoir]

UK, HBOS stocks just got rinsed out.

[LaoPo]

OP & Mods:

I suggest to merge this thread with another thread already running since July 16th, about the debacle of Fannie Mae and Freddie Mac (the largest US Morgage Banks, saved by the government) now followed by more bad news about American Financials like Lehman Brothers, Merryll Lynch, AIG (the largest insurer in the world) and WaMu, America's largest savings bank and the like.

What do you think ?...The end is not yet in sight and otherwise we end up with many different topics about financial debacles and bankruptcies in the US and elsewhere.

Maybe just change the topic title ?

http://www.thaivisa.com/forum/Fanni-and-Fr....html&st=50

LaoPo

[samtam]

This has been a long time in coming. But the two epithets relevant to markets are always so relevant: FEAR & GREED. We've seen the greed, now we're seeing the fear, which if unchecked will allow a large crash. Cool heads will prevail.

[samtam]

Fannie Mae and Freddie Mac (the largest US Morgage Banks, saved by the government) now followed by more bad news about American Financials like Lehman Brothers, Merryll Lynch, AIG (the largest insurer in the world) and WaMu, America's largest savings bank and the like.

And AIG...

[Boater]

OP & Mods:

I suggest to merge this thread with another thread already running since July 16th, about the debacle of Fannie Mae and Freddie Mac (the largest US Morgage Banks, saved by the government) now followed by more bad news about American Financials like Lehman Brothers, Merryll Lynch, AIG (the largest insurer in the world) and WaMu, America's largest savings bank and the like.

What do you think ?...The end is not yet in sight and otherwise we end up with many different topics about financial debacles and bankruptcies in the US and elsewhere.

Maybe just change the topic title ?

http://www.thaivisa.com/forum/Fanni-and-Fr....html&st=50

LaoPo

I would have added this to the topic http://www.thaivisa.com/forum/Fanni-and-Fr....html&st=50 , but Fanni and Freddie do not have to much impact on Thailand, but Lehman Does....

My fear of this news is Lehmans current assets in Thailand which run into the 10's of billions of THB !!!!!

There Bangkok office which is Headed by Japan may or maynot be affected.... as Lehman own and operate alot of Hotels in Thailand as well as dictate alot of the land prices here ( As they currently own some of the most prime land in Bangkok, Koh Samui and Phuket ! ) , thus if they do go bankrupt and have to sell of there land at VALUE price, surly that would cause an economic crash in land value within Thailand ????

It is the same with AIG as well, as if you take note of Koh Samui, all the prime land is BANKED by investment firms... now if they have to sell off at the REAL MARKET value , how does that leave the averge Joe investor who has purchased at the current land value, but now is being undercut by the investment firms???

Edited September 15, 2008 by Boater

[VegasVic]

OP & Mods:

I suggest to merge this thread with another thread already running since July 16th, about the debacle of Fannie Mae and Freddie Mac (the largest US Morgage Banks, saved by the government) now followed by more bad news about American Financials like Lehman Brothers, Merryll Lynch, AIG (the largest insurer in the world) and WaMu, America's largest savings bank and the like.

What do you think ?...The end is not yet in sight and otherwise we end up with many different topics about financial debacles and bankruptcies in the US and elsewhere.

Maybe just change the topic title ?

http://www.thaivisa.com/forum/Fanni-and-Fr....html&st=50

LaoPo

I would have added this to the topic http://www.thaivisa.com/forum/Fanni-and-Fr....html&st=50 , but Fanni and Freddie do not have to much impact on Thailand, but Lehman Does....

My fear of this news is Lehmans current assets in Thailand which run into the 10's of billions of THB !!!!!

There Bangkok office which is Headed by Japan may or maynot be affected.... as Lehman own and operate alot of Hotels in Thailand as well as dictate alot of the land prices here ( As they currently own some of the most prime land in Bangkok, Koh Samui and Phuket ! ) , thus if they do go bankrupt and have to sell of there land at VALUE price, surly that would cause an economic crash in land value within Thailand ????

It is the same with AIG as well, as if you take note of Koh Samui, all the prime land is BANKED by investment firms... now if they have to sell off at the REAL MARKET value , how does that leave the averge Joe investor who has purchased at the current land value, but now is being undercut by the investment firms???

You really cut to the crux of the situation. Fannie and Freddie were already backed by the U.S. government so their takeover had long been expected at some point, and as you point out the ramifications of F and F beyond the shores of the U.S. are very limited. Lehman on the other hand had 10's of billions of Dollars in assets worldwide that will have to be liquidated and this will exert the most pressure on the smaller countries like Thailand as you point out, but even large E.U. countries and their largest banks will take a huge hit due to lqiudations and counterparty risks.

[bangkokjackk]

at least the price of oil has fallen as a result. Thats one small +ve outcome of this.

[VegasVic]

at least the price of oil has fallen as a result. Thats one small +ve outcome of this.

The bursting of the oil bubble and the Lehman BK have nothing to do with each other. Oil will continue to slide all on its own, and that is a good thing because smaller countries like Thailand will need all the help that they can get once the world (or as lao po likes to say the U.S.) economic influenza strikes its shores.

[midas]

You really cut to the crux of the situation. Fannie and Freddie were already backed by the U.S. government so their takeover had long been expected at some point, and as you point out the ramifications of F and F beyond the shores of the U.S. are very limited. Lehman on the other hand had 10's of billions of Dollars in assets worldwide that will have to be liquidated and this will exert the most pressure on the smaller countries like Thailand as you point out, but even large E.U. countries and their largest banks will take a huge hit due to lqiudations and counterparty risks.

Your statement condradicts what BBC World Buiness Report said this morning ? It said Korean

and Japanese banks could take a big hit and the markets there have plunged this morning.

even the Shanghai market has fallen sharply again. Lets face NO ONE knows for certain

how far this will keep going

[midas]

paragraph from The Times UK this morning :-

"Hank Calenti, a credit analyst at RBC Capital Markets, said that initial estimates putting Lehman’s derivatives exposure at $690 billion were wide of the mark: “I would put the exposure closer to $800 billion,” he said. Mr Calenti said that there would also be a big knock-on effect on the commercial property market because of a likely auction of $32 billion of Lehman’s assets in the sector. Lehman tried and failed in recent weeks to offload $4 billion of securities backed by British residential mortgages. "

The problem with commercial property is where are potential buyers going to

borrow money in the middle of a credit squeeze ?

[Boater]

paragraph from The Times UK this morning :-

"Hank Calenti, a credit analyst at RBC Capital Markets, said that initial estimates putting Lehman's derivatives exposure at $690 billion were wide of the mark: "I would put the exposure closer to $800 billion," he said. Mr Calenti said that there would also be a big knock-on effect on the commercial property market because of a likely auction of $32 billion of Lehman's assets in the sector. Lehman tried and failed in recent weeks to offload $4 billion of securities backed by British residential mortgages. "

The problem with commercial property is where are potential buyers going to

borrow money in the middle of a credit squeeze ?

Arabs and Russians ...............

[PattayaParent]

I guess this sounds the death knell for 'The Sails' in Pattaya then unless some cash rich developer can get it at a knock down price.

[midas]

paragraph from The Times UK this morning :-

"Hank Calenti, a credit analyst at RBC Capital Markets, said that initial estimates putting Lehman's derivatives exposure at $690 billion were wide of the mark: "I would put the exposure closer to $800 billion," he said. Mr Calenti said that there would also be a big knock-on effect on the commercial property market because of a likely auction of $32 billion of Lehman's assets in the sector. Lehman tried and failed in recent weeks to offload $4 billion of securities backed by British residential mortgages. "

The problem with commercial property is where are potential buyers going to

borrow money in the middle of a credit squeeze ?

Arabs and Russians ...............

I dont think so with plummeting oil prices even these peopl are not to be feeling too

good about taking on risks now because who knows how far oil prices will fall............?

[LaoPo]

paragraph from The Times UK this morning :-

"Hank Calenti, a credit analyst at RBC Capital Markets, said that initial estimates putting Lehman's derivatives exposure at $690 billion were wide of the mark: "I would put the exposure closer to $800 billion," he said. Mr Calenti said that there would also be a big knock-on effect on the commercial property market because of a likely auction of $32 billion of Lehman's assets in the sector. Lehman tried and failed in recent weeks to offload $4 billion of securities backed by British residential mortgages. "

The problem with commercial property is where are potential buyers going to

borrow money in the middle of a credit squeeze ?

Arabs and Russians ...............

Nah....not this moment. The Arabs, Russians, Chinese and the lot have been severely hurt by bonds and shares they owned in those large companies which went bust or going under soon.

Study the CITIBANK/GROUP case where the Saudis and UAE Sheiks saved Citi's @rses. I saw some shocking footage (documentary about the Citibank case) of really big shots, flying to Arabia, BEGGING the Arabs for money; a more humiliating thing is hardly thinkable for these US Bankers and they felt really uncomfortable, talking to those Sheiks.

This time the Arabs, Chinese and Russians will wait a little before they decide (or not) to jump in with bags of money.

The big picture is that Corporate America is FOR SALE at this moment at bargain prices and guess who's to blame....?

If I leave the Russians and Chinese alone for a moment and concentrate on the Arabs:

The Arabs is just a relatively small community of a few rulers who are able to decide overnight whether to invest or buy shares, or a company, and since they have the CASH assets of more than Trillions of Dollars - 1 Trillion is 1 thousand Billion dollars - it just shows in what kind of wild water America is in right now.

The people/countries with cash are Kings now and they know it and have all the time in the world.

LaoPo

[Naam]

If I leave the Russians and Chinese alone for a moment and concentrate on the Arabs:

The Arabs is just a relatively small community of a few rulers who are able to decide overnight whether to invest or buy shares, or a company, and since they have the CASH assets of more than Trillions of Dollars - 1 Trillion is 1 thousand Billion dollars - it just shows in what kind of wild water America is in right now.

The people/countries with cash are Kings now and they know it and have all the time in the world.

LaoPo

i second that wholeheartedly and would like to add that "them Ayrabs" are not (as widely thought in Little Rock, Arkansas and Duluth, Minnesota) "stoopid sand-n*ggers". most of the responsible ones who are in power think in different time frames then freaking hedge funds and bankers who have nothing else in mind than the quick buck.

[jts-khorat]

From The Nation: Bangkok bank worst hit by Lehman crisis, Investment of Bt3.5 billion in collapsed US institution

More here: http://nationmultimedia.com/2008/09/17/bus...ss_30083642.php

[thaihome]

From The Nation: Bangkok bank worst hit by Lehman crisis, Investment of Bt3.5 billion in collapsed US institution

More here: http://nationmultimedia.com/2008/09/17/bus...ss_30083642.php

Why it is important to read the whole article:

Bank of Thailand Deputy Governor Bandid Nijathaworn said on Monday that local banks have Bt102 billion invested abroad, or about 1.3 per cent of their funds.

TH

[Boater]

WALL STREET FALLOUT

Risk for prime office market

Lehman was a major Bangkok landlord

POST REPORTERS

The collapse of Lehman Brothers Holdings, the largest bankruptcy in US history, could disrupt Thailand's prime office market, as the 158-year-old investment bank is one of the largest holders of commercial space in Bangkok. Lehman's global assets, listed at $639 billion as of May 31, include an estimated 50 billion baht worth of ''grade-A property, hotels and offices in Thailand'', according to Krisada Kaweeyarn, the executive adviser for Lehman's Bangkok office.

Lehman's office holdings cover about 100,000 square metres of space in buildings including the Italian-Thai Building, Pacific Place on Sukhumvit Road, the Mercury Tower and the Muang Thai Phatra Building.

The company also is a financier and investor in several listed property developers, including Raimon Land Plc, Grande Asset Hotels and Property, and Ascon Construction.

Mr Krisada, who declined to confirm Lehman's borrowers, said the bank had outstanding commitments of 10 billion baht to three listed companies.

As Lehman was in no position to service its obligations, the companies could have funding troubles unless they secured new credit lines.

Pattanapong Tanumathaya, the chief executive of Ascon Construction, said the company was already moving to arrange new funding for its 16-billion-baht Dubai project.

''We approached Lehman several months ago about a loan, but they had delayed a decision because of internal problems,'' he said. ''We are in talks with other funding sources, both in Thailand and abroad.''

Ascon shareholders also were interested in repurchasing the 7.5% stake held by Lehman in the company, Mr Pattanapong said.

Raimon Land executives also denied any impact on the company from the Lehman collapse.

In any case, Mr Krisada said the impact on the Bangkok property market could be substantial if the US bankruptcy court forces a liquidation of assets.

''I think that any new buyer would need significant funds if these properties were to come on the market at once,'' he said.

''Commercial banks are restricted in investment by the Bank of Thailand. Foreign funds may have the money, but many are quite cautious at the moment.''

Mr Krisada warned that the gyrations in the global financial market were ''only the start of the crisis''.

''It's unlikely that there will be a foreign white knight [to buy Lehman's assets]. Everyone is simply unwinding their positions,'' he said.

Mr Krisada said that Lehman's Bangkok office, with fewer than a dozen staff, was in no position to take any action, and that the Bank of Thailand should step in to help mediate with the bank's clients and counterparties.

Authorities should also move to increase liquidity in the money market to ease the impact of the global credit crunch on local firms, he added.

Patima Jeerapaet, managing director of the property consultant Colliers International (Thailand), said he believed buyers would be ready to step in if Lehman moved to sell Bangkok properties.

While Lehman's holdings were in prime locations in the capital, prices could go for 20% to 30% below market value if a forced sale was required.

''It's actually a good opportunity for institutional or individual investors, both Thai and foreign, to pick up the assets,'' Mr Patima said.

The direct impact of the Lehman bankruptcy, meanwhile, is focused on the equities markets, as stock markets worldwide have tumbled over fears of a full-blown US financial crisis and global recession.

Prasong Vinaiphat, the deputy secretary-general of the Securities and Exchange Commission, called on investors to remain calm in the wake of the Lehman bankruptcy.

He said that international equity markets, including the Stock Exchange of Thailand, had fallen as investors adjusted liquidity positions and foreign funds cut back their risk exposure.

''The SEC would ask investors to exercise careful judgement in trading decisions. Thailand's capital markets remain strong and on the right path,'' Mr Prasong said.

He said Lehman Brothers did not conduct any securities operations in Thailand.

The Bank of Thailand, meanwhile, is monitoring closely the potential impact of Lehman's bankruptcy on local banks. Thai banks currently have 4.3 billion baht worth of exposure to Lehman, either through loans or in bond investments.

Asset managers have seen their foreign investment funds contract sharply with the decline in overseas securities markets.

Pichit Akrathit, the president of MFC Asset Management, said the fund had been cutting back its foreign equities and bond holdings over the past several days.

While MFC had no direct investment in Lehman securities, it did have an indirect exposure, although Dr Pichit declined to offer details.

''I think what is clear is that a global recession is a near certainty over the next several quarters,'' he said.

Voravan Tarapoom, the president of the Association of Investment Management Companies, said the association would survey its members to gauge the impact of the Lehman collapse on local funds.

Mrs Voravan, also the managing director of BBL Asset Management, said foreign investors would likely continue to divest their emerging market assets, affecting the SET.

She added that BBLAM yesterday actually saw inflows into its long-term equity and retirement mutual funds double from normal levels, as investors took advantage of the sharp slide in the SET index to accumulate stocks.

''It's good to see that investors have a good understanding of the situation, and are not panicking,'' Mrs Voravan said, adding that the BBLAM funds had no exposure to US securities.

http://www.bangkokpost.com/170908_Business...p2008_biz01.php