Lehman Brothers' Presidential Connections

Now that the government has agreed to rescue Citigroup (C), investors are pondering again a question that never seems to die: Wasn't it a mistake to let Lehman Brothers fail? Treasury Secretary Hank Paulson was asked this very question in a Q&A that ran in yesterday's Wall Street Journal, and he replied, "We didn't have an option." He said that Lehman had neither a buyer, as Bear Stearns did in JPMorgan Chase (JPM), nor adequate assets to justify a life-saving federal loan.

There's a certain irony here. Did you know that Lehman had incomparable Washington connections? Downright presidential connections, in fact (and even they couldn't save the firm). Now that Lehman's North American core has been acquired by Barclays Capital (BCS), they remain:

Read the whole story here.

Comments

[000Jade000]

It was a mistake to let Lehman fail. The only thing that makes sense is that Paulson let it go because he thought that Lehman's $7.1 trillion in derivatives exposure wasn't so bad as the rest, and he didn't realize how letting the bank fail would have such a cascading effect.

If Lehman kicked off this mess, imagine how bad it will be when Citi finally goes under. Citigroup is the #3 gambler with $37.1 trillion in derivative bets.

Educate yourself here:

http://georgewashington2.blogspot.com/2008/10/whos-got-biggest-derivatives-exposure.html

and here: http://www.globalresearch.ca/index.php?context=va&aid=11147

[nogimmicks]

Because Bush has no real power. He is told which lines to read and where to sign and he is going to be blamed for everything while almost the same "writers" will remain in power under Obama.

[LHoney]

Could you elaborate on that??

[haramagoti]

What if this whole manipulation of our financial system is simply a White-(House) Washing of the bank's books that a new administration could potentially find the more damning evidence against certain top level officials of our government within? In other words, when Angler Paulson says "There was no option" to Lehman's demise, surely there was, as has been proven there is currently for others. Given the top tier ties to our gov't, in Lehman's case, are we witnessing the most expensive bailout of not the economy in American history, but a public -yet invisible- bailout of those who surreptitiously abused our financial systems and are now covering their collective ass by destroying all the evidence down to whole banks where that evidence was otherwise incapable of being concealed? These guys don't talk nor do they act straight, so what's really happening? With pirouetting techniques that spin deception after false start thus far, we might not ever find out why a bailout was pushed so adamantly and recklessly, sold to everyone as the "only option". Most economists are embarrassed by the lack of diplomacy towards this beast. Those who, prior to pushing such a sweeping stab in the dark so fecklessly, were considered professionals, but now their names nearly spit on themselves in many a corner of the financial realm. We might be watching them shave prison sentences more than future economic risk. I could be wrong, i'm no professional, but neither are Anglers Bernanke and Paulson, by good measure.

[KarateKid]

Seeing the picture of Jeb Bush reminds me that we are not done with the Bush family. Don't be surprised to see him in 2016. He won't be on the scene in 2012; he's too smart to be a sacrificial lamb, Mark my words.

[dadw5boys]

JEB BUSH WAS THE ONE WHO HANDED OUT MONEY DURING THE LAST BANK CRASH.

HEY DADDY BUSH WAS PRESIDENT WHEN WE HAD THE LAST BANKING PROBLEMS.

FUNNY HUH.

JEB BUSH WORKED FOR KARL ROVE UNDER THE DADDY BUSH ADMINSTRATION HANDLING THE BANKING CRASH OF THE SAVINGS AND LOANS.

DAN RATHER WAS RIGHT !!!!!!!!! LOL

[MadeinAmericaProud]

Now you know a gun is not the only thing that can take a life.

[curiousasheck]

Jeb Bush, the President"s brother and former Governor of Florida, was a senior adviser for Lehman"s private equity arm. He parted ways with Lehman around the time of the bankruptcy.

After having loaded up the trucks at the back docks with whatever loot he could get his hands on.

[satyriasis]

Lehman may have been connected but they weren't connected to the right people at the right time. Paulson and his disciples who run Treasury are from Goldman and their biggest rival was Lehman. Someone had to be made an example of and it just so happened it was gonna be Lehman.