Thursday, October 23, 2008

Hank's Hollow Excuse on Lehman

Hank Paulson said that Lehman had “no good assets” on which the Fed could justify borrowing. What about that $2.5 billion in set aside bonus money? If creditors in bankruptcy court can’t touch it, those assets qualify as good collateral.

The Bush administration didn’t want to save Lehman. It would look bad to have George W. bailing out his close relations right before a key election. Brother Jeb and cousin George Herbert Walker work for Lehman's private equity underwriting (PEU) division.

Those Bush boys stand to gain in two ways. First, they get their $250,000 slice of bonus money. Second, they’re given an equity stake in the deal with Bain Capital.

But the Bain deal is up in the air as Carlyle Group, Goldman Sachs and others put together bids for Lehman’ PEU business.

Should Carlyle win, they’d hold a hand of four Bushes, Poppy, George W. (CaterAir board), Jeb and George Herbert Walker. One could double down with a hand like that.