# Lehman Merrill Lynch AIG Fannie Freddie WaMu Madoff Citibank saga

#### Andy Nguyen

So Max, has Bloomberg TV crew arrived at your office to interview your boss yet?

#### IlyaKEightSix

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

Well, if I won't think I'm good (now don't get me wrong, I think I have much to learn and many ways to improve), who will?

If I am not for myself, who will be for me?

Might as well shoot the moon, because with the crisis on Wall Street, there aren't many stars in the sky.

#### doug reich

##### Some guy
Well, if I won't think I'm good (now don't get me wrong, I think I have much to learn and many ways to improve), who will?

If I am not for myself, who will be for me?

Might as well shoot the moon, because with the crisis on Wall Street, there aren't many stars in the sky.

That is inspiring, but you have to also recognize the reality that 100,000 more qualified people have lost their jobs on Wall Street. That is an extremely tough market to break into.

#### Stefan Zota

Doug is right.
I think it is very difficult to get even an entry level position at the moment. Competition is fierce but more important, the companies reduced or stopped recruiting until storm weathers.
This is a good time to be an observer and understand what solutions these companies are exploring to get out of the mess. I am sure that is pretty inventive

PS: It also means more people will return to academia. Graduate school is considered by many to be a good refuge in tough times ...

#### Uncle Max

Interesting book is out there:

Auletta, Ken, Greed and Glory on Wall Street: The Fall of the House of Lehman, New York, N.Y.: Warner Books, 1987.

Prices for used copy of this book are growing everyday

#### IlyaKEightSix

Doug is right.
I think it is very difficult to get even an entry level position at the moment. Competition is fierce but more important, the companies reduced or stopped recruiting until storm weathers.
This is a good time to be an observer and understand what solutions these companies are exploring to get out of the mess. I am sure that is pretty inventive

PS: It also means more people will return to academia. Graduate school is considered by many to be a good refuge in tough times ...

Well I have other companies aside from bulge brackets (read: Goldman, JP Morgan) on my mind. www.blackrock.com, Group One, and www.circlewm.com

And there's DE Shaw (another long shot)

I don't want to go back to grad school. $50k more debt when instead I can earn$60k? That's a bad, bad swing.

#### charlesdwright

Interesting book is out there:

Prices for used copy of this book are growing everyday

One of the first books I ever read about the industry. VERY dated material, even if the title is eerily prescient. The "fallen" Lehman was resurrected by Shearson and then spun off years later, if I recall.

#### Andy Nguyen

The talking heads on CNBC just announced that the Fed is working with a syndicate of private equity firms to take over Lehman. The deal is expected to be announced before the Asian market opens on Sunday evening.

#### IlyaKEightSix

So that's it huh...my goodness...

It seems Wall Street is really doing some, for lack of a better term...

Spring Cleaning.

The question is who else is going under? Merrill? BofA?

#### Wallstyouth

##### Vice President
BofA to acquire LEH

When1 I worked for BoFA this use to be the rumor flying around constantly about them acquiring Lehman or possibly Morgan Stanley at one point... My guess is this will probably happen over the weekend given the fire sale which is going on with LEH.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aS74PdCxTlZ8&refer=home

I've worked for both companies and can honestly say this is going to be a major culture clash.

#### Uncle Max

BofA is rumored to take over Lehman. Not big surprise - they took over Countrywide because of their exposure to Countrywide deals. The same as JP Morgan took over Bear - JP had too much CDS on Bear.

Next one is WaMu - one way or another. Merrill should get ready or do something really fast.

#### alain

##### Older and Wiser
Let's see how long ML stays afloat

#### Uncle Max

ML might stand fine. Nobody knows...

But there were so many rumors about it latelty... That's how Lehman's and Bear's fall started. We will see.

#### alain

##### Older and Wiser
The thing going for ML is its massive wealth management and retail business.

#### Stefan Zota

The retail revenue is a "safe" steady source of income. For this reason, ML has a strong position. They should be a bit safer with from liquidity issues.
Furthermore, Thain is an exceptional CEO. He has cut the losses, sold a lot of subprime ballast (e.g. transaction with Lone Star). Overall the exposure to mortgages is significantly smaller than 1 year ago ...

#### DominiConnor

I'm not so sure that Lehman will die. Obviously it's not in the best health, but the discount window is available to it. I do not now see liquidity taking them down, so for a complete collapse we need to think of a new thing to hit them. That's obviously far from impossible, but I do not yet see that threat.

I find it tricky to call the next phase because of the share ownership issue.

A lot of senior execs have a large % of their personal wealth in Lehman stock, and that adds up to a decent % of the capitalisation.
A massive dilution will taste very bitter to them, and their ages are such that it is unlikely they'd get to what they would regard as an acceptable wealth level before retirement.

Thus I perceive that the strategy is mostly to muddle through and hope for the best.

Getting in more capital is tricky because of the dilution issue. Any number of sovereign wealth funds, and in particular the Chinese government would be interested in a stake, if the price was right, ie cheap. Hard for the senior execs to stomach that, unless they perceive that the alternative is ineviatably collapse.

#### charlesdwright

CDS' are through the roof. 700+.

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