Feds trying to arrange Lehman sale

WASHINGTON, Sept. 11 (UPI) -- The U.S. government is trying to broker a sale of troubled investment bank Lehman Brothers, The Washington Post reported Thursday.

Sources told the newspaper the Treasury Department and Federal Reserve hope to complete a sale in time to announce it before Asian markets open for the new week.

After reporting a $3.9 billion loss in the third quarter, Lehman announced a restructuring plan Wednesday that included selling a majority stake in the investment-management division, unloading $30 billion in real estate and cutting its dividend. The plan met with little enthusiasm on Wall Street, with Lehman's stock dropping 40 percent Thursday to $4.22 per share down from $60 in February.

Michael Kastner, managing director of fixed income at Sterling Stamos Capital Management in New York, said the federal bailouts of Bear Stearns and of the federally sponsored mortgage lenders are not enough to create confidence in the market.

"What we're going to need to see is at least one quarter where the financial institutions don't show write-downs and do show profits and an ability to grow their business," he said.