Barclays to Buy Lehman Assets for $2 Billion

this has to be a sign of relief for lehman bankers since the move will save around 9,000 jobs
i mean sure the bonuses will be shitty for probably a couple of years, but wall street will rebound eventually?

implication for BarCap interns who got offers?

S&T will have a lot of overlap I feel. BarCap doesnt have an M&A business or an equity underwriting business in US so Lehman would bring in 2 new divisions. There's also gonna be quite some overlap in debt capital market division i think.

WSJ breaking news: Morgan Stanley reports third-quarter profit of $1.425 billion on revenue of $8 billion.

WSJ breaking news: Morgan Stanley reported an 8% drop in fiscal third-quarter net income, but easily topped Wall Street expectations. In after-hours trading, shares of Morgan Stanley rose 6.4%.
__________________________________________
CNBC: Morgan Stanley, announcing quarterly results earlier than expected, reported a profit that declined slightly but blew past analysts' earnings expectations.

Excluding items, the investment bank said it earned $1.41 billion, or $1.32 a share, on sales of $8.05 billion in the third quarter.

Last year, Morgan Stanley reported a profit of $1.526 billion, or $1.38 a share on sales of $7.958 billion in the same period last year.

The firm was expected to report earnings of 78 cents a share, according to a consensus compiled by Thomson Reuters. Analysts, on average, looked for revenue of $6.3 billion.

Shares of Morgan Stanley spiked more than 10 percent in late trading Tuesday.

The stock [MS 28.70 -3.49 (-10.84%) ] finished the regular New York Stock Exchange session at $28.70, down almost 11 percent.

Earlier Tuesday, rival Goldman Sachs said third-quarter earnings dropped 70 percent, marked by sharply lower banking, trading and investment results.

© 2008 CNBC.com

Thats what I'm wondering. My Lehman intern friends are hoping that there is in fact a God.

There is no doubt Barclays will keep most of the US IBD business especially since they lack most areas of traditional IBD. There is not much overlap by way of coverage/M&A/products (except maybe DCM/ECM but I would venture to guess Lehman is much stronger in those areas). It will be interesting to see what happens to S&T. I'm assuming they will take the best in each area and let go of the rest. For current Barclays employees, there could be competition for areas in which they are historically weaker.

Barclays has been trying to build out this US business for awhile now and is able to do it at a discount. Either way, this is great news for Lehman as Barclays is a great bank.

wrong post

you at lehman? in securitization or something?

how has it been going? any news on barclays plans?

So Lehman IBDA SAs may in fact have some hope?

people at Barclays must be so pissed. The added expenses would eat into their bonuses I guess.

Here is my perspective: the lehman interns who got offers in industry groups/M&A and ECM will have good chances, DCM is a huge problem as BarCap is a pretty strong bond underwriter as well. trading-wise, lehman full times in cash equities, equity derivatives and convertible bonds will probably be secure as BarCap is weaker in these areas. Traders in FX and commodities will face the biggest uncertainty. Although lehman has a great credit trading business, not sure how those guys will fare as the timing is kind of bad. Equity research guys at lehman should be safe as BarCap has no equity research operation in US (unless you count equity derivatives strategy research).

my question: do you think barcap will also buy out lehman's proprietary trading businesses in this market? im particularly concerned about the global principal strategies group. to those who work at lehman, how big is this group and are there analysts in it?

Not to mention that this is demonstrates a complete divorce from Barclays' earlier mission statement.

untitled,

Exactly my thinking about the LEH interns in industry groups...they seem to have a pretty good chance....as do people who worked in Equities...

it will be interesting to see what happens. I'm not sure barcap will take on the trading desks of lehman because isn't barcap pretty strong in those areas? Also I don't think they will keep existing offers. They'll probably take on everyone currently working at lehman and keep it at that.

Thing is indian-banker if they take on the IBD (M&A and coverage) groups will they not have to deal with analysts and such leaving every so often.

If they do not bring on a new class, won't they be screwed next year summer 2009 when analysts leave?

They will bring on new SAs for banking depending on need but I'm not sure about what they would do with trading. The thing is in trading, people don't leave as often at least from my personal experiences. I have no idea what they would do or how they would manage this whole mess. Also with banking, you can hit the road immediately with modeling etc. but in trading you have to take the damn series 7 and 63.

Your complaining about 7 and 63? Try adding 86, 87 and at least CFA lvl 1 or 2 to that mix.

what was the lehman dress code? it was b-formal everyday at barcap. and has barclays bought the lehman office, or will everyone cram at metlife?

Lehman has a business formal dress code except for Fridays.

What do you all think about equity research? How is Barclays in that - and, more important, is that one of the divisions that will likely get salvaged through all of this?

as i said, barcap doesnt have equity research (at least not in US). they have equity DERIVATIVES research. so lehman's ER should be fine.

barclays said it would buy lehman trading. lehman's equity (cash and derivatives) credit trading can add some value.

Many Lehman interns (who are pretending that they are concerned about their friends' welfare as opposed to their own) are forgetting that Barclays has absolutely no expertise in banking. I doubt that Skip McGee or any of the other people who would be absolutely critical to running a successful operation will stay around. You can't have a hundred analysts when you have no MDs bringing in business or directing the juniors what to do...

...Probably better than going outright bankrupt, but I don't an overwhelmingly positive outcome emerging from this acquisition.

The key for the time being is keeping the senior people from jumping ship. There is an overlap in capital markets and definitely DCM as Barcap does have pretty strong desks in certain of those areas.

There is also that nasty problem of other places coming in and poaching the senior guys.

I am not 100% sure what will happen to the SAs. But for what it's worth, Barclays' summer classes are pretty small and some definitely have the option of going to London. I think there is hope yet.

Yes, keeping seniors is most important, and, unfortunately, also extremely difficult to do... especially the more talented ones; they'll have plenty of offers with hefty incentive packages to lure them away.

99% of an investment bank's assets are its people; Lehcap banking, if it survives, wouldn't be too large a force if it loses too much talent.

Just speculating, but I do think they'll bring on some IBD SAs.....Barclays has no strength in this aspect... also how else will you replenish your analyst class when they run for the hills in summer 2009?

As for S&T..I have no idea what to say; though Equities peeps prob have a very good chance.

A recruiter called my friend at LEH yesterday and told her to keep looking around at other opportunities, but that if Barclays buys Lehman there's a "great chance you'll get the offer." My friend was in the IBD this summer.