Tuesday, December 16, 2008

Fed Loaned Lehman Brothers $138 Billion Post Bankruptcy

The Bush administration cited it had no choice but to let Lehman Brothers fail. Months before, it saved Bear Stearns. Within days it rescued AIG. Treasury and the Fed said their hands were tied in mid-September as Lehman cratered.

Andrew Ross Sorkin reported the Fed loaned the firm $138 billion shortly after the bankruptcy. Why did they say one thing, and do another?

I believe politics played a major role. A Republican administration bailing out the President's close relatives wouldn't do. Bush cousin, George Herbert Walker, and brother Jeb worked for Lehman.

Sarah Palin had yet to botch basic interview questions and the race was close. Did Lehman fail to save the Bush brand?

Jeb and George Herbert Walker came out smelling like roses. They kept their share of the $2 billion bonus pool. The bankruptcy judge chose not to roll those funds up to satisfy creditors.

The judge granted a second gift when he selected Mr. Walker and management's bid for Neuberger Investment Management over Bain Capital's. Cousin George got the firm for half price with no money down. Sweet!

Bush's open and transparent financial rescue reflects none of this. The Fed considers its $2 trillion in loans and collateral "trade secrets". It looks like more Bush sponsored Corporafornication to me.