Paulson Insists No Bailout for Lehman

Treasury Secretary Henry Paulson is “adamant” that no government money will be used to bailout ailing Lehman Brothers, according to a Reuters report.

"There are two things that make this different from Bear Stearns. The market's been aware of the situation for a long time and has had time to prepare. Second, the Primary Dealer Credit Facility was created by the Fed to allow time for an orderly process," a source told Reuters.

The investment bank Lehman Brothers Holdings, spent the majority of Thursday in efforts to woe potential buyers after attesting that they had patched up its massive losses as recently as Wednesday, according to The Wall Street Journal.

Bank of America and Barclays are believed to be potential purchasers, according to The Wall Street Journal. Barclays is expected to want the U.S. government to help shield them from future losses. After Bear Stearns was forced into a deal to be acquired by JPMorgan Chase, the federal government agreed to absorb as much as $29 billion in potential losses.

The Federal Reserve and Treasury Department have been working toward resolving Lehman’s problems, including talking to potential buyers, according to WSJ. However, the Fed is not expected to structure a bailout similar to those of Bear Stearns, Fannie Mae, or Freddie Mac.