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Data Storage The Almighty Buck

Data Centers Crucial To Lehman Sale 301

Posted by kdawson
from the gilt-edged dept.
miller60 writes "What assets retain value in the midst of a financial panic? Data centers. When assets of bankrupt Lehman Brothers were sold to Barclays Tuesday for $1.75 billion, Lehman's data centers and headquarters accounted for $1.5 billion of the value in the deal. That echoes the JPMorgan-Bear Stearns fire sale, in which Bear's two data centers and HQ represented much of the sale price. Amidst financial turmoil, Wall Street's high-tech data centers become the crown jewels for buyers of distressed assets."
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Data Centers Crucial To Lehman Sale

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  • Hi! I'm a programmer for Lehman brothers and I'm looking for work. I was the designer of Assett Manager 1.0, a powerful tool that allowed our brokers to get values of our contracts....it's not a bad program, but it had a couple of bugs in it that I would like to have fixed.

    • by Ethanol-fueled (1125189) * on Wednesday September 17, 2008 @12:58PM (#25042199) Homepage Journal
      Idiots buying houses they couldn't afford so they were foreclosed and sold for cheap.

      Companies enabling idiots to buy things they can't afford have their own assets siezed and sold for cheap.

      Poetic Justice(tm)
      • Re: (Score:2, Interesting)

        by antifoidulus (807088)
        Yeah, 'cept now the idiots are bitching and moaning in an election year, so the people who really get stuck holding the bill are the people who know how to spend their money responsibly. The idiots who bought houses they couldn't afford are whining and getting help from the government, and you know the overcompensated execs at these companies are sure to get their golden parachute, even if it comes courtesy of uncle sam. Kind of funny, weren't these the same people who were whining about how high taxes we
      • by spun (1352) <`moc.oohay' `ta' `yranoituloverevol'> on Wednesday September 17, 2008 @01:10PM (#25042429) Journal

        Nice. I'm sure this whole mess boild down to 'idiots buying houses they can't afford' and the companies who enable them.

        No, I'm sure no normal people got hurt in this mess, only bad, dumb people or greedy people who deserved it. I'm sure no first time home owning, hard working parents with dreams of getting out of the ghetto were suckered into ARMS that would screw them over at the first downturn. Nope. Couldn't happen.

        I'm sure no one with a job they thought was secure got laid off and found their finances spiraling out of control, then found themselves and their kids living in their car. Nope. Not in America.

        Have a heart, man. Don't try to make reality fit your worldview that everything is fair, hard work is always rewarded, and only bad people have bad things happen to them. People are born with compassion and empathy circuits in our brain for a reason, and those that don't have them or can't use them are seriously handicapped.

        • by db32 (862117) on Wednesday September 17, 2008 @01:16PM (#25042543) Journal
          Hey...where are your empathy circuits?! I can't believe you would call Republicans seriously handicapped...
        • Unfortunately, while many people made honest mistakes, this stuff has been happening as long as mortgages have been going on - it's just that, now that more people are affected, and there's legitimate allegations of illegitimate activity by the lenders, it's getting big press. Frankly, if the lenders allowed this to happen to increase the bottom line on the income statement, they should be held liable - THEY make the final decisions as to whether or not to lend the money; if they only lent to increase shor

          • by encoderer (1060616) on Wednesday September 17, 2008 @02:29PM (#25043575)

            The trouble is that this has NOT been happening as long as mortgages have been around.

            Anyone that knows anything about econ knows at the core Economics is about incentives.

            In the last 10-15 years inventives in real estate have been flipped backwards.

            Let's just take a few examples:

            #1 The rise of a secondary market for mortgages.

            There was a time when most mortgages were self-funded. The bank would fund the mortgage out of its own pocket. If they were sold, it was to FNMA.

            Banks had a real incentive to do solid deals on homes with proven valuations.

            In the late 90s the secondary market exploded. Somebody figured how to sell just portions of a mortgage by combining it with portions of other mortgages into a MBS (Mortgage Backed Security) and these securities were sold as ROCK SOLID CREDIT opportunites. The reason?

            #2 The derivatives market and other developments

            The derivatives market is valued at an est. 6tn. Bigger than stocks. Bigger than bonds. This and other developments, like the consolidation of the IBank industry led to real issues with the 3 credit rating agencies. There began to be financial incentives to give good, AA and AAA ratings to securities.

            So these MBS's were given, yes, A, AA and even AAA ratings. You have to understand that AAA means "rock solid investment." That is, a AAA credit rating is considered to be as good as a t-bill.

            #3 Brokers
            Since banks sold mortgages to the secondary market, all of a sudden you didn't NEED $200k for 15 years to lend somebody $200k. All you needed is $200k for 180 days. This led to the rise of mortgage brokers. With far less scrutiny than banks, it was easier to fudge numbers to get deals made.

            This led to an array of CRAZY financial instruments designed basically just to make a profit for the lender.

            Take the infamous NINJA loan: No Income, No Job, No Assets. That is, you're given a mortgage based on nothing but good looks and your credit score. Nothing else is verified.

            Or the interest-only loan with a balloon payment.

            Or ARMs.

            Technology played a part, too. A small role, but still, being able to access a HELC via a debit card makes that TV purchase or riding lawnmower or whatever a lot more tempting.

            All of these things casue real issues with inventives.

            Who is the appraiser working for? Well, he's hired by the loan officer. Who is the loan officer working for? Well, he's not lending his bosses money anymore, since the mortgage will be sold in 90 days after close anyway. Who is the agent working for?

            This has NOT been business as usual. Make no mistake about that.

            • by spectro (80839)

              Take the infamous NINJA loan: No Income, No Job, No Assets. That is, you're given a mortgage based on nothing but good looks and your credit score. Nothing else is verified

              Thanks to these NINJA Loans this month it will be 5 years since I live in my own house. I may have never gotten out of renting without them since I wasn't good with money, my credit score sucked and had no assets besides my computers and car (following George Carlin's leadership, the rest of my paychecks went to pussy and beer)

              The bes

              • Re: (Score:3, Insightful)

                by petermgreen (876956)

                Good for you, unfortunately many people when given the ability to spend way beyond thier means by the dodgy mortgage brokers did so. Of course in many areas housing is in limited supply so more money availible to borrow just means prices go up meaning even more people end up taking out loans that they can't really afford.

                Now there has been a massive bust and the feds have to work out how to deal with it without destroying the rest of the US economy and possiblly several other countries economies too.

            • by Red Flayer (890720) on Wednesday September 17, 2008 @03:40PM (#25044757) Journal

              Take the infamous NINJA loan: No Income, No Job, No Assets. That is, you're given a mortgage based on nothing but good looks and your credit score. Nothing else is verified.

              The big problem with the NINJA loans was that the interest rates given on them did not reflect the risk. Typically NINJA loans were made with just a 1-2% premium over standard loans. They should have been assigned a Phenomenally Increased rate (at least a 5% premium), or PIRATE -- which would have held them in check.

              However, because the NINJAs were allowed to go unchecked, we still have a dearth of PIRATES, and thus heavy global warming in addition to the credit crunch.

            • by knghtrider (685985) on Wednesday September 17, 2008 @05:30PM (#25046017) Homepage

              The trouble is that this has NOT been happening as long as mortgages have been around.

              Anyone that knows anything about econ knows at the core Economics is about incentives.

              In the last 10-15 years inventives in real estate have been flipped backwards.

              In the late 90s the secondary market exploded. Somebody figured how to sell just portions of a mortgage by combining it with portions of other mortgages into a MBS (Mortgage Backed Security) and these securities were sold as ROCK SOLID CREDIT opportunites. The reason?

              That somebody was Alan Greenspan. When he took over as Fed Chairman, one of his goals was to shrink the financial sector to just a few banks to better compete with Europe. In 1933, the US passed the Glass-Steagall act; which made it illegal for Lenders (Banks) and Underwriters (Brokers) to be under one roof. This law was further tightened in 1956 to exclude ownership of out of state banks.

              Fast forward to 1996. The Federal Reserve, under the leadership of Alan Greenspan (a former head of JP Morgan) decides to allow banks to have 25% of their business in Underwriting (brokerage). This decision effectively nullified Glass-Steagall. Then, in 1999, the Gramm-Leach-Bliley act repealed part of Glass-Steagall and opened the door for Banks to compete with Insurance and Security companies. This law was signed by then-president Bill Clinton. While it was created by two Republicans; it had bi-partisan support in an attempt to 'modernize' financial services.

              #3 Brokers Since banks sold mortgages to the secondary market, all of a sudden you didn't NEED $200k for 15 years to lend somebody $200k. All you needed is $200k for 180 days. This led to the rise of mortgage brokers. With far less scrutiny than banks, it was easier to fudge numbers to get deals made.

              This led to an array of CRAZY financial instruments designed basically just to make a profit for the lender.

              This monster is precisely what the GLBA created. And this monster is precisely why the Tech Bubble and then the Housing Bubble occurred. It will be a decade, at least, before we have completely recovered. The Bush Administration is not at fault for creating the mess, but neither they nor Congress did anything to fix it early on--despite numerous warnings from economists across the country.

              • by daemonburrito (1026186) on Wednesday September 17, 2008 @07:51PM (#25048107) Journal

                An amusing footnote to illustrate how powerful the proto-financial-services people were in U.S. politics:

                Citigroup nee Citibank merged with Travelers a year before GLBA using a temporary exemption from Glass-Steagall.

                Smith-Barney, Travelers, Shearson and Primerica merged in 1994, five years before GLBA, using a similar waiver from Glass-Steagall compliance.

                http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act [wikipedia.org]

                • Re: (Score:3, Interesting)

                  by knghtrider (685985)

                  Oh yes...there were others too; I just skimmed over the highlights. The biggest highlight of all is the fact that Alan Greenspan favors total deregulation of the financial sector.

                  The same deregulation failure that has hit the Electric Industry in PA, where we are facing up to 60% cost increases in 2 years after the 'caps' come off. Caps that were put in place for 'deregulation' to occur and save the consumers. Deregulation to 'encourage' competition--that has led to the loss of 22 power companies in PA.

                  Th

            • Re: (Score:3, Informative)

              by ksheff (2406)
              What a lot of people don't understand is that this is occurring in other nations too. I'm sure any Slashdotters from the UK can chime in on the Northern Rock bailout and the condition of their real estate market.
        • but (Score:5, Funny)

          by toby (759) * on Wednesday September 17, 2008 @01:27PM (#25042707) Homepage Journal

          People are born with compassion and empathy circuits in our brain for a reason, and those that don't have them or can't use them are seriously handicapped.

          ...But will probably get elected anyway. :(

      • by Venik (915777) on Wednesday September 17, 2008 @01:30PM (#25042741)
        The problem really started with you. And here's how. You elected the government, which adopted legislation, which enabled the lenders to give loans to unreliable borrowers, who would buy hugely overpriced houses they could not afford, that would go down in value because they were never worth their price in the first place, sending real estate business down the drain, closely followed by construction, mortgage, and insurance industries, that form the core of the country's financial system, which is controlled and guaranteed by the government, which borrowed trillions from EU, Japan, China and Russia to fight wars abroad for no particular reason, which dropped the value of the dollar, which caused energy prices to skyrocket, which accelerated our country's economic recession, which made it necessary for the government to spend more of your money to prop up this whole pyramid scheme we call the "free market". And how did all of this start? With too many of us voting for the idiot who couldn't spell "economy", let alone understand it.
        • by Abreu (173023) on Wednesday September 17, 2008 @01:39PM (#25042867)

          Problem is, the entire global economy is affected when the US is in a recession. ...and most of us cringed when we saw that you reelected Bush

          • Re: (Score:2, Insightful)

            by IanHurst (979275)
            Most of us did too, unfortunately. The re-election is truly unforgivable. Anybody can be wrong once, but to vote Bush twice... yeah.

            To be fair, some of the causes of this crisis go back decades. You can't pin quite everything on Bush - just a lot of it.

            Here's hoping we'll make ourselves an energy policy and get working on that current accounts deficit finally.
          • Re: (Score:3, Insightful)

            by evilviper (135110)

            Problem is, the entire global economy is affected when the US is in a recession. ...and most of us cringed when we saw that you reelected Bush

            The US economy affects the world, but it's much more significant in this case than it should be...

            The entire global economy is MUCH WORSE off than if they were just dealing with a US recession. This is because banks (and mutual funds, and other investors) around the world were foolish enough to blindly buy up sub-prime mortgages. Governments around the world were si

        • Re: (Score:3, Insightful)

          by VJ42 (860241) *
          In many ways I agree with what you've posted, however I live in the UK; you've probably heard the saying "when the US sneezes, the world catches a cold". Well what do you think happens to us when the US has 'flu?

          Of course it doesn't help that my own government has also mismanaged what little power it had, but I'm not taking the blame for mistakes made by the American electorate.

          Now do some of the more insular slashdotters out there understand why the rest of the world has an opinion on who should be t
      • Here's a clue (Score:3, Interesting)

        by Colin Smith (2679)

        y = (1 + x)^N

        It's the function which describes the growth of a debt due to interest.

        Here's the function which describes the growth in the money created at exactly the same moment, when the loan is taken out.

        y = x

        You notice one is exponential, the other isn't in fact growing at all.

        That is the Fractional Reserve Banking based monetary system. I'll let you work out the implications.
         

    • by Dogtanian (588974) on Wednesday September 17, 2008 @01:34PM (#25042797) Homepage

      I was the designer of Assett Manager 1.0, a powerful tool that allowed our brokers to get values of our contracts....it's not a bad program, but it had a couple of bugs in it that I would like to have fixed.

      Unfortunately it appears that some people missed your important email (subject line:"important Tech news..") about positive and negative values being displayed the wrong way round if the application is started between 7 and 9.30AM. I suspect that many also missed your 284-line MSN message reminding them of the "isolated few dozen places" where they had to watch out for decimal points being a digit or two out of place.

      Other than that your software was excellent, and it's a real shame we won't be able to give you your bonus of -$2.347 this year.

    • by mwvdlee (775178)

      Was your program responsible for the $1.5 billion "valuation" of Lehman's data centers and HQ as well?

  • No DR Site? (Score:4, Funny)

    by Black-Man (198831) on Wednesday September 17, 2008 @12:49PM (#25042011)

    I guess this is one 'disaster' Lehman Bros couldn't failover?

  • by plopez (54068) on Wednesday September 17, 2008 @12:49PM (#25042015) Journal

    Programs come and go. Information is timeless and valuable.

    • by mccalli (323026) on Wednesday September 17, 2008 @12:53PM (#25042087) Homepage
      No. it's all about avoiding the expense of building one yourself. The actual data in those centers may or may not be worthwhile to the buying organisation, but the floor space and ready-to-roll IT structure most certainly is.

      Posted anon since I was involved in one of these things recently.
      • by mccalli (323026) on Wednesday September 17, 2008 @12:55PM (#25042145) Homepage
        Posted anon since I was involved in one of these things recently.

        At least, it would have been if I'd had a brain.

        OK, since my name's out I'll finish the job. The operations are most likely valuable, as are the apps running in there. However, come merger and consolidation time merely having those centres around is a tremendous advantage. These things cost serious amounts of cash, and the electronic transaction volumes are growing all the time - yes, even now. So the raw existence of a pre-equipped building is the thing, not necessarily the data files within it.

        Cheers,
        Ian
      • by AKAImBatman (238306) * <akaimbatman AT gmail DOT com> on Wednesday September 17, 2008 @12:56PM (#25042153) Homepage Journal

        And let's not forget the multi-gigawatt generators, the fail-over system, the trained staff, the fire suppression systems, the network infrastructure, the secured access, etc., etc., etc.

        The actual servers in the racks are the LEAST valuable part of a good data center. They're also the highest depreciating.

        • by bstadil (7110)
          Fyi, When you buy something the depreciation done by the seller is of no consequence to you.
        • The actual servers in the racks are the LEAST valuable part of a good data center. They're also the highest depreciating.

          No doubt, you can pick up used Sun equipment CHEAP. For instance, I love to window shop AnySystem [anysystem.com], one of their current "Ugly Duckling Special" [anysystem.com] (scratched boxes, missing face plates, etc.) had a list price of $21,000 - you can get it now for $1200 (yeah - a 6GB RAM, 6 CPU SPARC box for a grand). You can get this stuff second-hand for 5% of what they cost less than a decade ago. With the storage rigs, the drives cost more than the rackmount/backplane. Unfortunately, drives don't usually live long enough

      • by Will Fisher (731585) on Wednesday September 17, 2008 @01:48PM (#25042981)
        Almost! It's actually about the location of the data center, i.e, close to the exchange. A fast, low latency connection to the exchange gives you a crucial edge over the competition. It means when things change you can get your trades in before your competition does. This is ever more important in the up-and-coming automated trading systems.
    • by wild_quinine (998562) on Wednesday September 17, 2008 @01:09PM (#25042407) Homepage

      Information is timeless and valuable.

      I just can't agree with this. When something is timeless that means that it does not age. But information does age. Virtually all information ages; all information relating to human affairs certainly does. The aging of information can be measured not merely in whether it is forgotten, or known, but in how it is considered. Remember: we can still watch the original series of Knight Rider on re-run channels. This does not mean it is 'timeless'. It would be too polite to call it anachronistic.

      Even for example the information we have about the collapse of Lehman.

      Two weeks ago that information would have been worth billions.

      Now it is common knowledge, and the details must be investigated, after the fact.

      In twenty years it will be of historical interest, taught in economics classes.

      In a thousand years it may have been forgotten.

      The very fact that we have already seen different states of this information over two weeks means that it is not timeless.

    • by nospam007 (722110) *

      >Programs come and go. Information is timeless and valuable.

      In London you find the information in the tube every other day.

    • by andy1307 (656570)
      Information like what? credit risk models?
  • by rodney dill (631059) on Wednesday September 17, 2008 @12:50PM (#25042029) Journal
    Your towel and your thumb.
  • Banks and financial firms are fairly notorious for being 5-10-15 years behind on modern data retention because it's so expensive to convert over from paper to electronic systems. Having modern systems is a true boon because you're set up to scan, store, and do everything electronically and go paperless. Catching up with past accounts and paperwork is partly ignored by some banks as well - there's lots of paperwork that is lucky to get scanned in, and may sit in boxes in warehouses, particularly in older d
    • Re: (Score:2, Informative)

      by Anonymous Coward

      What?? I'm sorry, I gotta call your bluff here: [Citation Needed].

      Banks *love* electronic retention, because it's zillions of times cheaper than paper retention. I was working on a project in the early 90s for a now-purchased-purchased-purchased bank that was nearly zealous in their conversion from warehouses full of checks and bonds and whatever to WORM-drive archiving of photos of said instruments. It didn't get much trendier (and certainly not 5-10-15 years behind) than that. Pretty much any way a ba

      • Re: (Score:3, Interesting)

        I deal with a lot of distressed older commercial debt, so I see a lot of the backlog. There are a handful of banks, certainly, that have it right, but there are plenty out there which can't afford the expense of updating to modern data retention, or at least taking care of what is already on paper. There's a ton of paper out there in places like Iron Mountain and such which does nothing but store paper because the bank can't afford to digitize the stuff. You're partly right, at least for the bank you did
        • I deal with a lot of distressed older commercial debt, so I see a lot of the backlog.

          There's a ton of paper out there in places like Iron Mountain and such which does nothing but store paper because the bank can't afford to digitize the stuff.

          That's backlog - not current data as you try to imply in your original post [slashdot.org]. Two entirely different things.

  • Suprising? (Score:5, Insightful)

    by AKAImBatman (238306) * <akaimbatman AT gmail DOT com> on Wednesday September 17, 2008 @12:51PM (#25042041) Homepage Journal

    What assets retain value in the midst of a financial panic? Data centers.

    You know what else retains value in the midst of a financial panic? Skyscrapers.

    Anytime you have physical assets, you have value. Especially if those physical assets are in continuing demand. (Which data centers are in particular, because the Technology sector is doing quite well right now.)

    The only difference is that companies rarely own their own spaces anymore. They sold them off to realty companies long ago, because they didn't want to be in the real-estate business. This sort of sell/lease arrangement is almost certain to become common with data centers in the future. CoLos are already the standard of the industry, and are going to take over increasing amounts of large corporate business in the future.

    • Re: (Score:3, Interesting)

      by russotto (537200)

      You know what else retains value in the midst of a financial panic? Skyscrapers.

      Depends on what caused the panic. I wouldn't be surprised if the book value on many skyscrapers dropped significantly about 7 years ago.

      • Re: (Score:3, Insightful)

        by Kingrames (858416)
        I would say the value of at least 2 of those towers was greatly overestimated, in that ever since then they've cost us way too much.

        I am not, however, referring to money.
      • by Deadplant (212273)

        I would guess the opposite.
        There was a sudden drop in office space supply in a dense downtown area and a sudden surge in desperate companies needing space asap.

    • by miller60 (554835) *
      You're exactly right about the sale/leaseback trend. Several of the well-heeled data center developers are actively marketing the sale/leaseback option, targeting companies who have expansion space left in their data centers. The existing tenant keeps their space, sheds a lot of overhead, retains some expansion rights, and the new owner fills the rest of the space with colo.
    • Re: (Score:2, Interesting)

      by alexander_686 (957440)
      Tell that to the Japanese, where skyscrapers have fallen in value by a good 50%. When your mortage is worth more than the building this is not an asset.
    • by AndersOSU (873247) on Wednesday September 17, 2008 @01:21PM (#25042615)

      You know what else retains value in the midst of a financial panic? Skyscrapers.

      That's true... Unless there's a real estate crisis coincident with the financial panic.

      Sure, a sky scraper isn't going to lose all it's value, but it could be worth less than you paid for it - especially if companies are failing by the dozen and your prospects for new tenants aren't good.

      Also from the irony department: Lehman didn't own it's London offices, and the rent Lehman paid for the space was 15% of the landlords total income. The landlord, thinking ahead carried insurance to protect against the eventuality that one of their major tenants would vacate. Their insurance company: AIG.

      • Re:Suprising? (Score:5, Interesting)

        by AKAImBatman (238306) * <akaimbatman AT gmail DOT com> on Wednesday September 17, 2008 @01:58PM (#25043129) Homepage Journal

        Sure, a sky scraper isn't going to lose all it's value, but it could be worth less than you paid for it

        I somewhat doubt Lehman is making a profit on their data centers, either. What they are doing is liquidating the assets that have value.

        The landlord, thinking ahead carried insurance to protect against the eventuality that one of their major tenants would vacate. Their insurance company: AIG.

        As amusing as it is, that's exactly why AIG is in trouble. Each tier saw the risk coming and tried to pass the risk upstream. The problem is that the risk was not isolated. With all these upstream pushes, the risk ended up concentrated in the largest companies in the market. It's no coincidence that AIG is one of the largest insurance underwriters in the world.

        • by AndersOSU (873247)

          Agree with you there, I just wouldn't be touting the soundness of investments in real estate (skyscrapers or mortgage backed securities) this year.

          The data centers retain their value mostly because they're infrastructure.

    • by Kjella (173770)

      Uhh... is the technology sector doing well? If so, it's only because it's early because when people get poor tech-gadgets are way down on their list of priorities. The last big downturn in the economy computers were still improving at crazy speeds to keep it going, this time around I think few will consider a new computer very high on their purchase list. There's many exciting things happening in terms of development, but 200$ systems aren't exactly going to make killer margins.

      • Re:Suprising? (Score:5, Interesting)

        by AKAImBatman (238306) * <akaimbatman AT gmail DOT com> on Wednesday September 17, 2008 @02:03PM (#25043181) Homepage Journal

        Uhh... is the technology sector doing well?

        Indeed. It's one of the few sectors where rapidly rising oil costs and plummeting property values has little effect. As a result, the sector is one of the strongest in the market today. And not just because people must have the latest and greatest software and gadgetry. (Consumers actually have less money for that.) Instead, technology is seen as a possible solution to the problems plaguing other industries.

        Real world example: UPS developed software to route their trucks through fewer left turns. This rerouting reduces fuel costs and thus produces tremendous savings for the company.

    • Intellectual property. Why just last Friday I patented "A business process and related methods to leverage instability in financial markets and raid the US treasury."

      I don't expect to deploy the process myself, but licensing should be worth a good bit.

    • by jez9999 (618189)

      You know what else retains value in the midst of a financial panic? Skyscrapers.

      You've obviously never heard of 9/11. :-)

    • Anytime you have physical assets, you have value. Especially if those physical assets are in continuing demand. (Which data centers are in particular, because the Technology sector is doing quite well right now.)

      I seriously doubt the data centers are worth, as hardware or real estate, anything approaching even close to 1.5 billion dollars. Even with the devalued dollar and assuming the real estate is in midtown Manhattan... That's a huge data center, especially considering that IT equipment depreciates (f

  • Free (Score:3, Funny)

    by C_Kode (102755) on Wednesday September 17, 2008 @12:53PM (#25042083) Journal

    Using Linux could have saved millions. ;) :P

    • by DamonHD (794830)

      There *was* a lot of Linux in those data centres, with my code running on it! B^>

      Rgds

      Damon

    • I agree. I've been using Linux on my laptop for 5 years now, and I must say, I have saved millions of...well, choose your unit, and I've saved millions of it. Dollars, meters, liters, bytes, grams, etc.
  • by Optic7 (688717) on Wednesday September 17, 2008 @12:54PM (#25042103)
    Is it any surprise that the most valuable assets in a company that is going down the tubes would be its physical assets, real estate, etc? The summary itself says data centers AND HEADQUARTERS. What a shock that "datacenterknowledge.com" is telling us how valuable and important data centers are. I'm almost tempted to say this is spam, but I can't be bothered to go to the website to learn more about it.
    • Re: (Score:3, Insightful)

      by Anonymous Coward

      Real estate: billions

      Data centers: couple million

  • Which is it? The datacenters (infrastructure), or the data they contain, that has the value?
  • I was just thinking how I needed some more drive space.
  • Here's an industry that isn't ready to farm out its work to cloud computing. Internally, they operate their own clouds.
  • by mpapet (761907) on Wednesday September 17, 2008 @01:30PM (#25042753) Homepage

    First of all, these are unprecedented times in global financial markets. Once in 100 years is putting it mildly.

    Second, a data center and a building are the only assets that can be valued with the shotgun marriages the Administration, Treasury, and Fed are making right **now.** By now, I mean no sleep, no one leaves until the deal is closed NOW.

    BofA got a sweetheart deal with Countrywide, they are getting another sweetheart deal with whatever brokerage they acquire. The same holds true of JPMorgan Chase and Co.

    The Fed has literally run out of money with the AIG nationalization and has asked the treasury to print more dollars NOW. http://www.ft.com/cms/s/0/271257f2-83f1-11dd-bf00-000077b07658.html [ft.com]

    Once again, the losses are being socialized while the titans of financial executive management just walk away.

    You would be wise to re-balance your asset pool to reflect coming inflation. And any pension holders out there should do your best to liquidate your pension today, that is, if your pension isn't underfunded already or if that is even possible.

    • by infinite9 (319274)

      You would be wise to re-balance your asset pool to reflect coming inflation.

      You don't know that. What's really happening is that we're experiencing a huge amount of deflation. The credit markets are contracting in a major way. The fed will almost certainly fire up the printing press to bail out more institutions and to counteract this deflation. The real question will be which one will happen at a greater rate. There's a large group of economists claiming that there's no way the printing press can kee

    • Re: (Score:3, Informative)

      by Abcd1234 (188840)

      The Fed has literally run out of money with the AIG nationalization and has asked the treasury to print more dollars NOW.

      Just as a correction, AIG was *not* nationalized. It was provided a bridge loan while it's slowly dismantled. The US will then, in theory, be paid back through funds generated by the selloff of assets and subsidiaries. It's effectively a controlled liquidation of the company.

      As for the Treasury programme, I have no idea what you're talking about vis a vis "[printing] money". They're p

  • by Anonymous Coward on Wednesday September 17, 2008 @02:04PM (#25043199)

    I am an investment banker and can say with confidence that the datacenters were an afterthought in this deal. Important? Certainly. The most important? a joke. Bob Diamond and Barclays have wanted to extend its US investment banking business for several years, and found an opportunity to grab one at a fire sale. But the true value of the deal is enormously larger than listed, as it involves taking on assets estimated (with confidence, I'm sure)at $72 billion and liabilities of $68 billion. I'd recommend reading http://www.ft.com/cms/s/0/5c9dcc26-83f1-11dd-bf00-000077b07658.html?nclick_check=1 [ft.com] to inform yourselves about the transaction.

    As to the Bear Stearns datacenters comprising the bulk of the value - that is about as wrong as you can get. The breakup fee (the fee paid to JP Morgan if the deal did not go through) was the building. JPM could have walked from the deal and gotten the builing, so to argue that the deal was for the building/datacenter is absurd. Let's not forget that the Federal Reserve alone lent $29 billion for the transaction. Datacenters are valuable, but not worth that amount of money.

  • by melted (227442)

    Why did they even need such a huge datacenter? I guess things can get out of hand when you play with other people's money.

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