mailing list archives
Lehman's demise etc.
From: David Farber <dave () farber net>
Date: Thu, 18 Sep 2008 17:09:34 -0400
Begin forwarded message:
From: Dave Burstein <daveb () dslprime com>
Date: September 18, 2008 4:14:21 PM EDT
To: dave () farber net
Subject: Lehman's demise etc.
Dave (for the list if interesting enough.)
Companies often come out of Chapter 11, but I just got the
release below that Lehman's liquidation will proceed starting Friday.
Some of the other problems are on the front page, and the word around
the street is much more to come. The bankers' problem will affect us
in technology, making it much harder to fund startups, IPO, or grow.
That has a direct policy effect: starting a third truly high speed
competitor in the U.S. has gone from highly unlikely to almost
That means that U.S. and Canadian policy has to work well with 2
1/2 competitors, because that''s all we are going to have. Nearly
everything we've done since 1996 has been designed to encourage
competition and assumes there will be strong competition. Two carriers
are weak competition, and that's U.S. reality for many years forward.
Cable and the Bells have become quite good at "winking and nodding"
and holding back what competition is doing in some countries. I wish
wireless could deliver to tens of millions speeds fast enough to watch
TV on our regular sets, which I think is what most people will want.
Nothing I know planned in wireless can deliver 5 meg streams
to a large volume of homes without far more towers than are planned.
Wireless is extraordinary, should be universal, and is changing the
world - especially Asia and Africa. But wireless bandwidth is
essentially shared. The 13 and 130 megabit hopes are if only one user
is on the cell site. You can't deliver 5 megabit stream to a quarter
of your users, much less for two or three TVs, without far more towers
than any plan I know of. I'm not the expert and I hope that changes,
but for my thinking ahead I believe most people will want to watch TV
and therefore will still want cable, fiber, or DSL.
Comcast will be able to offer 50 megabits to 20 or 30 million
people by 2010, their CFO just confirmed on Wall Street. (Yes, DOCSIS
3.0 will be that good if you haven't noticed yet.) Verizon FIOS GPON,
now going in for about 12M homes, can easily handle 200 megabits in
both directions. In Japan and France, 100 megabits costs $20-$40 and
the companies are profitable, and I think that's what most of us want
for our country. So far, it looks like high speeds will be far above
the competitive price and not available for a decade for many, because
we have weak competition. I hope I prove wrong, and I hope the new FCC
commissioner is effective enough we will all have affordable, truly
high speed service. Chiago and San Francisco should have an Internet
comparable to Paris and Tokyo.
SIPC ISSUES STATEMENT ON LEHMAN BROTHERS INC.: LIQUIDATION
PROCEEDING NOW ANTICIPATED
WASHINGTON, D.C. - September 18, 2008 - The Securities Investor
Protection Corporation (SIPC), which maintains a special reserve
fund authorized by Congress to help investors at failed brokerage
firms, issued the following statement today in relation to the SIPC
member, Lehman Brothers Inc. (LBI).
SIPC President Stephen Harbeck said: On Friday, September 19, 2008,
SIPC will file a proceeding placing LBI in liquidation under the
Securities Investor Protection Act (SIPA). After extensive
discussions and consultation with representatives of the firm and
its parent company, as well as representatives of the Securities and
Exchange Commission, the Federal Reserve, the Commodity Futures
Trading Commission, the Financial Industry Regulatory Authority and
others, SIPC has decided that such action is appropriate for the
protection of customers and to facilitate the transfer of customer
accounts of LBI and an orderly unwinding of the business of the
This action is being taken in connection with a proposed sale of the
business of the broker-dealer to Barclays Capital Inc. A hearing on
approval of that sale is scheduled for September 19, 2008, at 4p.m.,
in the Chapter 11 proceeding of the parent company, LBHI.
To provide clarity to market participants, I would note the following:
* SIPCs initiation of the proceeding is designed to minimize market
disruption and to allow the transfer of assets and customer accounts
of LBI to close in a timely manner under the negotiated Asset
* SIPC will ask the court where the SIPA proceeding is filed to
allow the Trustee to operate the business of the firm for a limited
time so that normal operations can continue.
* SIPC continues to consult and coordinate with the above-mentioned
federal agencies and others to ensure orderly market functioning.
SIPC remains vigilant and committed to our core mission of customer
The Securities Investor Protection Corporation is the U.S.
investor's first line of defense in the event a brokerage firm
fails, owing customer cash and securities that are missing from
customer accounts. SIPC either acts as trustee or works with an
independent court-appointed trustee in a brokerage insolvency case
to recover funds. The statute that created SIPC provides that
customers of a failed brokerage firm receive all non-negotiable
securities - such as stocks or bonds -- that are already registered
in their names or in the process of being registered. At the same
time, funds from the SIPC reserve are available to satisfy the
remaining claims of each customer up to a maximum of $500,000. This
figure includes a maximum of $100,000 on claims for cash. From the
time Congress created it in 1970 through December 2006, SIPC has
advanced $505 million in order to make possible the recovery of
$15.7 billion in assets for an estimated 626,000 investors.
For more information about SIPC, see "The Investor's Guide to
Brokerage Firm Liquidations" at http://www.sipc.org/pdf/SIPC_brochure_Investors_Guide_To_BD_Liquidations.pdf
MEDIA CONTACT: Leslie Anderson, (703) 276-3256 or landerson () hastingsgroup com
. All investor inquiries of SIPC should be directed to asksipc () sipc org
or (202) 371-8300. Inquiries about LBHI should be directed to
Monique Wise, 646-333-9056.
This email was sent to daveb () dslprime com
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- Lehman's demise etc. David Farber (Sep 18)