New York, New York - Negotiations broke down between Lehman Brother representatives and that of the feds for a federal bailout when the accounting books disclosed that Lehman Bothers did not qualify under the Bush's "Too Big to Fail" economic doctrine because their capital to debt ratio was too small and their overall business practices to sound.
"They'll have to file for bankruptcy or be taken over by Bank of America like the others," said the Fed. "We're out to loan the taxpayers money to financial Titians. Not tall skinny kids who are anemic, asthmatic or have a heart murmur. We want giants like Bear Sterns, Fannie Mae, Freddie Mac and AIG whose feet are made of clay."
Upon hearing the news of the Fed rejection of the Lehman Brothers application for finical assistance due to not having enough debt or liquidity shortages, panic spread on Wall Street as banking and investment CEOs scrabbled to take on even more risk by piling on more worthless loans onto their books and investments portfolios.
"It's crazy," said Jack Rodgers, CEO of a multination bank. "Just last week I was trying to unload a bundle of bad housing mortgages. Now, just a week later, I'm trying to buy them back for three times what I sold them. I would have gone as high as five times to get them back but that would have aroused suspicion. As it is now, I have other financially sound banks calling day and night, asking me if I have any more bad loans to sell them."
Rogers advises other CEO not to let on that they are in the market for bad loans, or worst yet that they are finically sound. As now days, it is considered a sign of weakness.
"Tell me how is a finically sound institution suppose to compete with unsound business practices that get rewarded with bailouts form the federal government," rhetorically asked Rogers. "It's a race to the bottom and it's on."