To our surprise, Hank Paulson is apparently taking a hard line with Lehman (LEH) and the possible buyers looking for a government handout. This may be posturing (Paulson’s a good negotiator), but it may also be what it purports to be: The perfectly reasonable position that Lehman had SEVEN MONTHS to get its act together and spent 6.999 of those months in arrogant denial.
Three cheers for Hank Paulson.
AP: Treasury Secretary Henry Paulson is “adamant” that no government money be used in any deal that resolves the crisis at Wall Street investment bank Lehman Brothers, a source familiar with his thinking said on Friday. The source said Lehman (NYSE:LEH – News) already has substantial support from the Federal Reserve as it races to negotiate with potential buyers.
“There are two things that make this different from Bear Stearns. The market’s been aware of the situation for a long time and has had time to prepare. Second, the Primary Dealer Credit Facility was created by the Fed to allow time for an orderly process,” the source told Reuters.
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