Lehman Merrill Lynch AIG Fannie Freddie WaMu Madoff Citibank saga

[Stefan Zota]

What do you think about current state?

A simple starting point for the discussion:

Contracts protecting $10 million of Lehman debt for one year cost 11 percent upfront and 5 percent a year, according to CMA prices at 8:50 a.m. in New York. That's up from 1,200 basis points at the close of trading yesterday. The price means it costs $1.1 million in advance and $500,000 a year to protect the bonds compared with $1.2 million a year yesterday.

 

[alain]

some rumors...

naked capitalism: Lehman End Imminent

 

[charlesdwright]

Ahh, Alain, I see you've been to Dealbreaker this morning.

 

[Stefan Zota]

It is an interesting rumor.
Many other about Lehman. Anyway, something would need to be announced quickly (few days). I think it is an intense CDS speculation with those spread

 

[Uncle Max]

The story looks very similar to Bear's one. I won't be surprised if we will get announce on Sunday that JP Morgan will take over Lehman with Fed support.

 

[charlesdwright]

The story looks very similar to Bear's one. I won't be surprised if we will get announce on Sunday that JP Morgan will take over Lehman with Fed support.

Way similar. Too similar. It's starting to look like a pattern.

 

[bob]

A sad day down here in lower Manhattan for a whole host of reasons.

It seems Lehman's demise is a foregone conclusion. Is anyone here looking at Washington Mutual? I believe I saw yesterday that CDS on their debt was trading as high as 40% upfront.

 

[Uncle Max]

Yeah, probably WaMu is the next to go. Maybe not that dramatically as Bear.

Also Merrill is in a pretty bad shape too.

 

[alain]

WM is around $2 and MER is under $20 at the moment.

 

[IlyaKEightSix]

If this is true and I can get into Goldman, well, let's just say I'll be a very happy camper.

 

[Andy Nguyen]

Met a Baruch MFE alum who is at Lehman. According to him, things are really bad (understatement?). People are leaving left and right.
Rumors have it that many have bought daily Metro card instead of the monthly one.
I also heard discussion that the Fed would not rescue Lehman because the Treasury just took on a huge responsibility with the Fannie.

 

[alain]

If this is true and I can get into Goldman, well, let's just say I'll be a very happy camper.

You will need to be very good because the competition is going to be stiff.

 

[Stefan Zota]

I agree with Alain and I work for GS. 'Happy camper' does not sound like something I would use related to work

 

[Yan He]

JP Morgan is the only one goes up today.
More and more reporters across the street, looks like there will be big news to be announced today?

 

[doug reich]

Rumors have it that many have bought daily Metro card instead of the monthly one.

That's a strong statement that people consider their days numbered... really putting your money where your mouth is.

 

[charlesdwright]

Spreads down quite a bit.
http://www.reuters.com/article/bondsNews/idUSN1130689520080911

It's a rampage of rumors. If they haven't taken them down by now, I don't know if they can.

***

On the other hand, this doesn't look like good news...

http://www.reuters.com/news/pictures/articleslideshow?articleId=USN0927996520080911&channelName=#a=1

 

[Uncle Max]

WM is around $2 and MER is under $20 at the moment.

Lehman opened $17.36 this Monday and now it is $4.55. Things go pretty fast this days.

 

[Andy Nguyen]

As fast as how Bears fell?

 

[Uncle Max]

I also heard discussion that the Fed would not rescue Lehman because the Treasury just took on a huge responsibility with the Fannie.

Lehman is peanuts for Fed comparing to trillions of $$ exposure in Fannie and Freddie. So, if Fed doesn't bail out LEH there should be another reason.

 

[Uncle Max]

As fast as how Bears felt?

Not that crazy fast, because people are trying to be more careful now. Before most of the people thought that it's impossible that Fed let such a big bank as Bear to go down.