Lehman Brothers sitting on nuclear stockpile

Lehman Brothers sitting on nuclear stockpile 17 Apr 2009, 0048 hrs IST, AGENCIES

NEW YORK: Failed investment bank Lehman Brothers sits not only on toxic sub-prime mortgage loans but also toxic nuclear stockpile.  According to reports, the bankrupt bank holds up to 450,000 pounds of uranium — called yellowcake — which can be upgraded to run nuclear plants and make nuclear weapons.  The stockpile is a hangover from a commodities trading contract undertaken before the Wall Street bank collapsed last year. Lehman filed for bankruptcy after the Bush administration refused to bail it out last September. After bankruptcy, it managed to sell its brokerage business to Barclays, leaving it saddled with $200 billion worth of sub-prime loans and yellowcake worth $20 million.  Liquidators have been trying to offload the stuff for months, but the price of uranium has fallen from $65 to $40 per pound because of the global recession, leaving Lehman's yellowcake languishing in a variety of secure storage facilities, some of which are in Canada.  "It turns out we were looking in the wrong place for weapons of mass destruction,'' said the New York Post on Wednesday in a sarcastic comment on the invasion of Iraq in search of Saddam Hussein's non-existent deadly arsenal. "They were not in Iraq. They were in Lehman Brothers' portfolio."  Bryan Marshal, Lehman's chief executive, who was appointed to salvage value for creditors, told Bloomberg News that the stockpile would be sold responsibly.  "We plan on gradually selling this material over the next two years," he said. "We are not dumping this on the market and have no fire-sale mentality."Yellowcake can be purified and enriched to fuel nuclear reactors or, theoretically, weapons. A lively financial market in uranium trading has developed in recent years. While commodities such as oil and precious metals are dealt in futures contracts which rarely see delivery, the relative immaturity of uranium trading means that trading firms sometimes end up taking ownership of the stuff. Lehman's ownership is governed by tight regulations.   What is yellowcake?  Yellowcake (also called urania) is a kind of uranium concentrate obtained from processing of uranium ore. The name comes from the colour and texture of concentrates produced by early mining operations; modern yellowcake is brown or black. Yellowcake is used in the preparation of fuel for nuclear reactors and may also be turned into enriched uranium suitable for use in weapons and reactors.