Meltdown 2008

Thoughts on 2010

2010-01-04T11:41:00.000-08:00

"Today's increasingly bullish sentiment is consistent with a B (or 2) wave, which would imply a setup for the most destructive (for financial wealth and confidence) phase of a C-wave decline, lasting 2-3 years. "What "BC" is describing is similar to the sucker bounce in the early 1930 after the stock market crash of 1929. SourceBy mid to late 2010, we will have lanced the biggest boils of the

Warning: The Deficits Are Coming! (WSJ Sept 4, 2009)

2009-09-13T13:00:00.000-07:00

The former head of the Government Accountability Office is on a crusade to alert taxpayers to their true obligations. By JOHN FUNDWashington, D.C.David Walker sounds like a modern-day Paul Revere as he warns about the country's perilous future. "We suffer from a fiscal cancer," he tells a meeting of the National Taxpayers Union, the nation's oldest anti-tax lobby. "Our off balance sheet

How Overpriced Is The S&P 500?

2009-09-04T09:29:00.000-07:00

America's Fiscal Train Wreck by Richard Berner at Morgan Stanley (New York)

2009-07-06T10:45:00.000-07:00

United StatesAmerica's Fiscal Train WreckJuly 06, 2009 By Richard Berner | New York America's long-awaited fiscal train wreck is now underway. Depending on policy actions taken now and over the next few years, federal deficits will likely average as much as 6% of GDP through 2019, contributing to a jump in debt held by the public to as high as 82% of GDP by then - a doubling over the next decade

S&P 500 at Critical Point

2009-05-20T15:37:00.000-07:00

The dashed line is the closing price today (May 20, 2009). The market is only off 42% from the peak. The S&P has just turned down below its 200-day moving average. Not a good sign for the bulls!

New Mortgage Loan Reset / Recast Chart

2009-05-20T15:26:00.000-07:00

Matt Padilla at the O.C. Register presents a new reset / recast chart from Credit Suisse: Loan reset threat looms till 2012Credit Suisse is using recast dates for Option ARMs and reset dates for all other loans. As Tanta noted: "Reset" refers to a rate change. "Recast" refers to a payment change.Resets are not a huge problem as long as interest rates stay low, but recasts could be significant.

Madoff PBS Frontline

2009-05-13T20:40:00.000-07:00

Mortgage Rate Resets (2010 + 2011)

2009-03-30T15:58:00.000-07:00

Still heavy Option Arms + ALT A in 2010 and 2011

The Quiet Coup (Simon Johnson MIT/IMF)

2009-03-29T12:25:00.000-07:00

{T]he global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further. The Asian economies that export manufactured goods are devastated, and the commodity

U.S. Total Credit Market Debt by Sector: 1929-2008

2009-03-24T20:31:00.000-07:00

Nice chart from Morgan Stanley breaking down total U.S. credit market debt as a percentage of GDP since 1929. The differences in the debt’s composition from the 1930s to today are striking, with households, not corporates, being the credit problem children today.

Dark Musings (Steve Waldman @Interfluidity)

2009-03-24T08:58:00.000-07:00

The news of today is the Geithner plan. I think this plan might work very well in terms of repairing bank balance sheets.Of course the whole notion of repairing bank balance sheet is a lie and misdirection. The balance sheets we should want to see repaired are household balance sheets. Banks have failed us profoundly. We want them reorganized, not repaired. A world in which the banks are all

China has more to worry about than its Treasury holdings

2009-03-15T09:03:00.000-07:00

Premier Wen ...“[w]e have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” He called on the United States to “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”

Citibank Nationalized Commercial

2009-03-08T16:26:00.000-07:00

The New F***ing Citibank - watch more funny videos

Mysterious Plans by Paul Krugman

2009-02-24T15:44:00.000-08:00

At the top are a bank’s assets. Below are its obligations to various parties, with decreasing seniority from left to right. I’ve drawn it to embody a pessimistic assumption about the bank’s finances, because those are the cases we’re interested in: the bank’s assets aren’t enough to cover its debts. Nonetheless, the stock, both preferred and common, has a positive market value. Why? Because of

Nationalizing Bad Banks to Save the Rest!

2009-02-20T20:44:00.000-08:00

Use this Video Link not the Play Button above.Yves Smith, editor of The Naked Capitalism blog, thinks it's just a matter of semantics and that nationalization is nothing new. "We already do nationalization in this country. It's called the FDIC resolving banks," she says on Fast Money.And she tells the traders “nationalization could be a good alternative,” once the government clarifies what

Cumulative Bank Failures Over Time

2009-02-16T09:15:00.000-08:00

How The World Almost Came To An End At 2PM On September 18

2009-02-09T20:24:00.000-08:00

LiveLeak has caught a scary moment of previously undisclosed insight by Paul Kanjorski where he reveals some facts that have not been captured by the media previously. At 2 minutes and 20 seconds in the video below, Democratic Representative Kanjorski explains how the Federal Reserve told Congress members about a "tremendous draw-down of money market accounts in the United States, to the tune of

Rise & Fall of U.S. Mortgage & Credit Markets

2009-02-02T18:08:00.000-08:00

The Paulson Funds 2008 Yeard End Report

2009-02-01T20:31:00.000-08:00

PBS Frontline February 17, 2009 Preview

2009-01-30T18:56:00.000-08:00

Bank Market Capitalization Q2 2007 v. Jan 20 2009

2009-01-23T16:38:00.000-08:00

Four Bad Bears - Where is this one headed?

2009-01-01T18:05:00.001-08:00

Faces of the Crisis: Nouriel Roubini

2008-12-27T12:21:00.000-08:00

In the buzzy, scruffy warren of offices in New York from which Nouriel Roubini runs his economics aggregration and commentary website, one of the young cyber-serfs has taped a New York Post story about the boss to the chalky wall. “NYU Playboy Warns: Econ Party’s Over”, the sub-heading declares, next to a photograph of a smiling, open-shirted Mr Roubini, sandwiched between two attractive young

Nassim Nicholas Taleb on Charlie Rose

2008-12-14T15:03:00.000-08:00

Deflation Virus

2008-12-07T11:49:00.000-08:00

Nobel Laureate Robert Mundell warned last week that America faces disaster unless the Bernanke policy is reversed immediately. This is a minority view, but one held by a disturbingly large number of theorists. History will judge.Henry Kaufman, former economist for Salomon Brothers, said, "we’ve got to kick our addiction to debt if the world is to regain some semblance of financial sanity."

U.S. National Debt

2008-11-23T10:59:00.000-08:00

"I place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt." Thomas Jefferson, third US president, architect and author (1743-1826)

1929, 1973, 2000, 2007 Bears Compared

2008-11-20T18:09:00.000-08:00

1973, 1987, 2000, & 2008 Bear Markets

2008-11-19T12:55:00.001-08:00

Worse Times Ahead by Robert Schiller (Yale)

2008-11-05T15:21:00.000-08:00

"This is not a run of the mill recession that we are in. This is a crisis of confidence that we haven't seen since the Great Depression....Ultimately I think economic forecasting is more guess work than people realize. In times when you don't have a fundamental change, you can exrapolate curves, and people do that pretty well. But right now I don't trust extrapolation. It also - forecasting -

German minister: Crisis far from over

2008-10-26T10:12:00.000-07:00

BERLINGermany's finance minister said in comments published Sunday that global financial markets could still collapse and that the situation remains dangerous despite government efforts to bailout lending institutions."The danger of a collapse is far from over. Any `all clear' would be wrong," Finance Minister Peer Steinbrueck told the Bild am Sonntag weekly. "We are still dealing with a very

Twin Peaks & Volatility

2008-10-25T10:38:00.000-07:00

The Bank Capital Mirage

2008-10-24T20:32:00.000-07:00

The above chart more or less supports what some have been saying for a while -– that major banks in the U.S. and the U.K. will end up being entirely nationalized before this crisis is over –- but it's still a striking way of looking at the data. The gist: Government recapitalization and other fund-raising has largely been in service of banks' prior subprime losses, while corporate and consumer

The Wrong Answer to the Wrong Crisis

2008-10-21T14:54:00.000-07:00

Anna Schwartz wrote the book on the last great banking crisis. That book was called "A Monetary History of the United States," and it was co-authored by the far more famous Milton Friedman. She says the bailout would have worked if it forced banks to take serious write downs on junk assets and allowed imploding banks to fail. Unfortunately we're doing the opposite.

Foreign Central Banks buy Treasuries - The Fed dumps them!

2008-10-17T13:59:00.000-07:00

Over the last 52 weeks, foreign central banks have added $321b to their Treasury holdings at the New York Fed (and no doubt more to other accounts) and $147b to their Agency holdings — for a total of $468b. And there clearly has been a big shift towards Treasuries recently. The rise in Treasury holdings over the last two weeks, annualized, tops $1 trillion. The fall in Agency holdings over that

U.S. Demand for Crude Oil

2008-10-17T09:20:00.001-07:00

The sharp drop in U.S. oil demand -- down in recent weeks by about 9% from a year ago -- shows how deep the economic malaise is across much of the industrialized world now.

Market Takes Worst Weekly Beating

2008-10-12T08:04:00.000-07:00

IMF Warns of Systemic Meltdown

2008-10-11T14:08:00.000-07:00

The world financial system is teetering on the "brink of systemic meltdown", the head of the International Monetary Fund (IMF) has warned in Washington.Dominique Strauss-Kahn said rich nations had so far failed to restore confidence, but he endorsed a new action plan by the G7 group.He also said the IMF was ready to lend to countries in dire need of capital.Mr Strauss-Kahn spoke after talks with

Krugman Last Chance to Avert Great Depression

2008-10-11T13:25:00.000-07:00

Krugman says we need equity injections and guarantees of interbank lending to restore confidence in banking system on a global basis and letting Lehman collapse was a mistake.

Dow May Fall to 7000

2008-10-11T09:39:00.000-07:00

The Dow Jones Industrial Average would have to fall about 18 percent more to reach its ``trend line'' since August 1982, when the 1980s bull market started, according to Peter Boockvar, an equity strategist at Miller Tabak & Co. in New York.

World Stock Markets Lose $26 Trillion

2008-10-11T09:37:00.000-07:00

A Discussion with Paul Volcker - Thursday, October 9, 2008

2008-10-11T08:47:00.000-07:00

Bear Market Rallies

2008-10-08T22:16:00.000-07:00

Hedge funds wilt in credit drought

2008-10-05T20:36:00.000-07:00

Investor redemptions could cull herd of hedgies; 700 to 1,000 funds may disappear by year-end.Source

CBS 60 Minutes: A Look At Wall Street's Shadow Market

2008-10-05T19:36:00.000-07:00

The U.S. Financial Crisis Is Spreading to Europe

2008-10-02T15:26:00.001-07:00

Barely a week after Europeans rebuffed American pleas to join in their bailout of the banking system, Europe now faces a financial crisis almost as grave as that in the United States — demonstrating how swiftly this contagion is spreading around the world.In the last two days, governments from London to Berlin have seized or bailed out five faltering banks. In Ireland, where rumors of panicked

Merrill: On Inflation or Deflation?

2008-09-30T10:02:00.000-07:00

Those who believe that we’ve managed, in one day, to switch from a deflationary to an inflationary backdrop because of additional government debt creation are not taking into account the offsetting credit contraction in the private sector, which comes from three sources: asset liquidation, debt repayment and increased savings. The Fed and Treasury are merely cushioning the massive deflationary

The Paulson Plan - Comments by Roubini, FT, & Naked Capitalism

2008-09-29T08:40:00.000-07:00

Analysis of Roubini post by Naked Capitalism: 1. The plan is inefficient (ie, it doesn't discriminate between who ought to be saved or not, and in fact rewards those who created dud assets)2. It runs counter to the best models of how to deal with this sort of problem [according to a study by the IMF only 7 out of 42 countries in financial crisis actually purchased bad assets/loans and only 1 did

Financial Apocalypse Explained

2008-09-28T15:40:00.000-07:00

Free Will: Financial Apocalypse ExplainedArnold (once of Freddie Mac) explains the housing bubble (12:58) A brief history of Fannie and Freddie (14:14) Was it really so unlikely that we’d end up in this kind of mess? (05:50) Is there a method to the bailout madness? (05:14) Surprise! The US is ruled by a technocratic elite (04:55) Arnold blasts the Paulson plan as essentially corrupt (09:52)

Credit Markets Predictably Not Happy Right Now

2008-09-26T14:22:00.000-07:00

The interventions we've had to date have, by any standard, been massive, yet have failed to bring lasting relief. The idea that a $700 baillout bill is a "comprehensive solution" seems more than a tad optimistic. From Brad Setser:In the last two weeks — if I am reading the Federal Reserves’ balance sheet data correctly — the Fed has:Increased “other loans” to the financial system by around $230

CDS report: Big Mac and fried in the US

2008-09-26T14:19:00.000-07:00

The US has been so hurt by the financial turmoil that markets now view its credit worthiness as akin to - or even worse than - that of McDonald’s, a shocking fact even if you believe that both are fronted by clowns.One broker quoted McDonald’s CDS at about 26.5 basis points, compared with 30bp for the US, on Friday morning and another desk quoted both about 25bp. The picture has worsened since

U.S. Bailout Tombstone

2008-09-21T19:48:00.001-07:00

Bob Shiller's Subprime Solution - Short & Long Run

2008-09-06T08:32:00.000-07:00

Arnold King says ... Shiller is a very independent thinker. He says that what we need is more financial innovation, not less. He says that we should not have been trying to urge so many people to take leveraged positions in homes, and that we should not be trying to maintain high house prices. (He spells out this latter point more in his book.)Contrast these eight minutes, which are enlightening

WAMU CDS Going Thru the Roof!

2008-08-31T13:18:00.000-07:00

Fed Running Out of Treasuries to Swap!

2008-08-27T08:34:00.000-07:00

Mish says, "[a}t the current pace, the Fed runs out of treasuries about a year from now. Things are about to get very interesting. Chart Courtesy Cumberland Advisors.

Fannie & Freddie - Jim Cramer

2008-08-22T13:25:00.000-07:00

Nothing Unusal About 20% decline in Oil Prices

2008-08-12T07:56:00.000-07:00

Goldman's projection of $150/barrel by year end is more than likely.

I.O.U.S.A.

2008-08-05T18:22:00.000-07:00

Auto Industry Default Risk Soars to 95% on GM, Ford.

2008-08-05T15:29:00.000-07:00

Contracts to insure $10 million of General Motors Corp. debt cost a record $4.7 million upfront plus $500,000 a year, indicating an 84 percent chance of default, while Ford Motor Co. has at least a 75 percent risk, according to UniCredit data. Combined with Chrysler LLC, the probability that one of the three will be unable to fund its business is more than 95 percent. GM, the world's largest

Year of Lending Dangerously

2008-08-05T09:08:00.000-07:00

On August 9 2007, the European Central Bank sent shock waves around world financial capitals when it injected €95bn ($150bn, £75bn) worth of funds into the money markets to prevent borrowing costs from spiralling sharply. The US Federal Reserve soon followed suit. But while the central banks had billed these moves as “pre-emptive” actions to quell incipient market tensions, they did not bring the

Housing Lenders Fear Bigger Wave of Loan Defaults

2008-08-04T13:02:00.000-07:00

The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.“Subprime was the tip of the iceberg,” said Thomas H. Atteberry, president of First Pacific Advisors

Housing Statistics - U.S., 20 Cities, Los Angeles

2008-07-30T11:36:00.000-07:00

U.S. Sales & Inventory - New & ExistingComposite 20 City Case Shiller House Price Index Prices & Table - Prices Down 15.8% but L.A. down 24.5%Los Angeles Case Shiller - Low, Mid-Range, High Price Range (Mid-Range down 29.8%)The low price range is less than $401,614. Prices in this range have fallen 36.5% from the peak.The mid-range is $401,614 to $606,600. Prices have fallen 29.8%.The high price

Has Deleveraging Even Begun?

2008-07-28T19:14:00.000-07:00

The serial bubble solution to the problem of prior bubbles and the financial fragilities they spawn has come to a dead end with a third toxic oil bubble the financial authorities did not expect and do not want – the commodity bubble. Now the serial bubblization of the policy makers portends recession, not recovery.....The end of the moon shot in the debt to GDP would appear to be at hand.

Debt Ceiling Raised $800 Billion from $9.815 t o $10.615

2008-07-26T19:47:00.000-07:00

SEC. 3083. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT. Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $10,615,000,000,000.

You Know The Banking System Is Unsound When....

2008-07-23T17:38:00.000-07:00

24. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs,

Death Spiral Financing at WaMu, Merrill Lynch, Citigroup

2008-07-23T09:22:00.000-07:00

Even though hundreds of billions of dollars of capital have been raised by the financial sector over the past several months, which of the investors in a financial institution have made money since their initial investment? Answer: Zero.We can’t think of one. They are all underwater. When Abu Dhabi first invested $7.5 billion in Citigroup last November, Citi’s stock was $35. Subsequently, when

$217 Billion in Subprime & Alt-A at F&F out of $1.5 T; $6.9 Billion in Foreclosed Properties: & Fixed Rate Mortgage 6.71% conforming & 7.8% jumbo

2008-07-23T08:34:00.000-07:00

The average interest rate for 30-year fixed-rate mortgages rose to 6.71 percent on Tuesday, from 6.44 percent on Friday, according to HSH Associates, a publisher of consumer rates. The average rate for so-called jumbo loans, which cannot be sold to Fannie Mae and Freddie Mac, was 7.8 percent, the highest since December 2000. Freddie and Fannie together own about $1.5 trillion in mortgage

The Beginning of the End for America's AAA Rating?

2008-07-16T09:16:00.000-07:00

Over the past three days, the price of a credit default swap (or CDS, a form of "insurance" on creditworthiness) on 10-year U.S. government debt has risen by 8.3 basis points (one-hundreths of a percentage point), or 61 percent, to 21.8 basis points, and is now almost 80% higher than the median value of this CDS since it was first quoted on April 2.There is no doubt that talk of a bailout of

The Fannie & Freddie Doomsday Scenario

2008-07-09T17:11:00.000-07:00

Here's a scary, and relevant, question to ponder as the housing market continues to slide: What would it take for the government to step in and help Fannie Mae and Freddie Mac, and how would a rescue affect you, the taxpayer?A Lehman analyst's note on Monday sent shares of both companies plunging. Though they've recovered some, the fall, and Fed Chairman Ben Bernanke's downbeat outlook for

Meltdown Warnings Are Accelerating from Months to Weeks to only a Few Days!

2008-06-29T16:38:00.000-07:00

June 18, 2008 via nc: RBS (Royal Bank of Scotland) sends out a red alert, warning private clients to prepare themselves for a full fledged rout in equities and bond markets in the next three months, with the S&P losing 300 points, or nearly a quarter of its value, by September. Also: iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade

Is there an Apple without Steve Jobs?

2008-06-17T17:09:00.000-07:00

In Lehman Fallout, Two Stars Are Given Lesser Roles

2008-06-12T22:20:00.000-07:00

Now, it will fall to Mr. Fuld to persuade both investors and employees that Lehman is sound. He plans to meet with the managing directors in New York and London next week to try to improve morale. Lehman may yet sell part of itself to a strategic investor in South Korea, which would most likely buy the stake in the open market, said a person close to the talks. If this happens the open market

Apple has "No Comment" on Steve Jobs Health Rumors (Barrons) at 2:57 PM PST

2008-06-12T15:18:00.001-07:00

A spokeswoman for Apple (AAPL) today said the company was not going to respond to rumors and speculation about the health of CEO Steve Jobs. Four years ago, Jobs had surgery for pancreatic cancer. The spokeswoman would not discuss speculation that he may have had a recurrence.Concerns about Jobs cropped up on Monday following his keynote address at the company’s Worldwide Developers Conference in

Jobs' health questioned again

2008-06-12T08:11:00.000-07:00

At its Worldwide Developers Conference on Monday, the company announced a new 3G version of the iPhone in a push to target mainstream consumers. But a strong undercurrent at the event focused on the emaciated appearance of co-founder and CEO Steve Jobs. While Jobs looked especially gaunt in his trademark black turtleneck and faded jeans, other Apple executives spent more time on the stage during

A Sinking Feeling About Lehman

2008-06-11T20:47:00.000-07:00

How low can Lehman Brothers go?The brokerage's shares fell for the fourth day in a row Wednesday, in the wake of Monday's announcement of a quarterly loss of $2.8 billion and plans to raise $6 billion of capital. Lehman shares slid 13.6%, or $3.75, to close at $23.75. It has fallen 26.5% so far this week. The real decay in the stock began when Merrill lowered its rating on the stock. The week

Future of Financials - Meredith Whitney

2008-06-11T15:25:00.000-07:00

CNBC Video LinkJune 11, 2008 at 12:12 EDT (8:24)With Comments on Lehman Brothers

Lehman is Not Out of the Woods - Jim Cramer

2008-06-11T15:17:00.000-07:00

TheStreet.com (2:50)

Dick Fuld's strategy has Lehman fighting for its life

2008-06-10T21:01:00.000-07:00

It's no surprise that when the fallout from the subprime mortgage mess made the securities built from those toxic loans start wrecking balance sheets across Wall Street, Dick Fuld zigged when everyone else zagged. But Lehman was the biggest underwriter of subprime debt in 2006, and the nation's fourth-biggest investment bank refrained from shedding the junk or writing it off fast enough.By March,

Lehman Credibility ?

2008-06-10T14:41:00.000-07:00

Even though Lehman did take write-downs, reduce leverage and raise capital in the second quarter, he says it's not enough. "Lehman is raising $6 billion that they said they didn't need to replace losses that they said they didn't have," Einhorn said Monday. "Since the credit markets actually improved this quarter, such losses primarily reflect losses that might have been taken in prior quarters.

Derivatives Traders Signal Bank Woes Likely to Worsen

2008-06-08T11:44:00.000-07:00

Interest-rate derivatives traders are betting banks' difficulties obtaining cash to fund holdings and shore up balance sheets will worsen. The difference, or spread, between the three-month dollar London interbank offered rate, or Libor, and the overnight index swap rate, traded forward three months, is greater than similar spreads expiring this month, according to data tracked by Credit Suisse

Deepening Recession, Tumbling Equity Markets and Sky-High Oil Prices

2008-06-08T08:27:00.000-07:00

Housing, Banking, Autos, Airlines, Unemployment, & Oil = Severe Recession

About 1 in 11 Mortgageholders Face Loan Problems

2008-06-07T17:33:00.000-07:00

Lehman May Raise $5 Billion of Capital

2008-06-05T20:37:00.000-07:00

Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, may raise as much as $5 billion in capital by early next week, a person with knowledge of the matter said.Lehman executives are talking to at least one U.S. pension fund and an overseas investor to discuss terms of a transaction, according to the person, who declined to be identified because the negotiations are confidential

Making Sense of David Einhorn vs. Lehman Brothers

2008-06-05T20:28:00.000-07:00

Lehman’s stock plummeted earlier this week in the wake of a Wall Street Journal story saying the firm is “considering” a common stock offering that would be dilutive to shareholders. The precipitous decline was no doubt welcomed by David Einhorn, a hedge fund manager who is short Lehman’s stock and has been quite vocal in his attacks questioning the transparency of the brokerage firm’s financials

Cramer: Why Own Lehman?

2008-06-05T20:19:00.000-07:00

So, the individual asked, would I buy the stock? I said, "Why the heck would I do that? To catch a 2- or 3-point rally? There is no earnings power at Lehman." I explained that some stocks are neither longs nor shorts -- that, to me, is Lehman. There's no reason to short it, because I don't think it is going under but many are betting that way, and there is no reason to go long it, because the

Lehman trading hurt by counterparty worry

2008-06-05T10:21:00.000-07:00

NEW YORK (Reuters) - Lehman Brothers Holdings Inc (LEH.N: Quote, Profile, Research) has seen its trading earnings hurt as clients worry about the credit strength of unregulated derivatives units, though it has sufficient capital and access to government funding, a veteran brokerage analyst told clients on Thursday.But Brad Hintz, who follows brokers for Sanford Bernstein, said that while

Einhorn v. Callan In re: Lehman

2008-06-04T13:57:00.000-07:00

For eight months now, Mr. Einhorn, a rabble-rousing hedge fund manager, has pilloried the venerable Lehman Brothers in an effort to drive down the bank’s stock price, which he is betting against.Lehman Brothers is not amused. In recent weeks, the bank’s chief financial officer, Erin Callan, has tried privately to rebut Mr. Einhorn to nervous investors, who have feared for Lehman’s health ever

Lehman on the block?

2008-06-04T07:14:00.000-07:00

Lehman Brothers (LEH) may not be independent for long. The Wall Street Journal reports the investment bank may be forced by its balance sheet woes and the recent plunge of its stock to sell part of even all of itself to another financial firm. Lehman shares sold off Tuesday after the Journal reported Lehman was considering a $4 billion sale of stock. But the newspaper says the selloff in Lehman

Lehman on the Ropes, Nevertheless Buys Shares Back

2008-06-03T20:34:00.000-07:00

This is one of the most irresponsible financial actions I have seen in quite a while.For a firm which is overlevered, rumored to be on the heels of Bear Stearns, with a large short interest, to go out and buy its own shares? This is a ludicrous short-sighted use of scarce funds. How could it need to sell shares last night, and per the Wall Street Journal story [tonight] "Lehman is Seeking

Lehman Counterparty Rumor or Reality?

2008-06-03T16:10:00.000-07:00

We don't "do" rumors in the 'Ville but we'd be remiss if we didn't pass along our ears to ye faithful. The chatta--and it's just that, unconfirmed chatta--is that counter-parties are "pulling a Bear" on Lehman Brothers (LEH). In other words, the "rumor becomes reality" scenario is making it's way around the trading wires.

Lehman Says Cash Holdings Rise As Rumors Swirl

2008-06-03T16:07:00.000-07:00

Lehman Brothers Holdings (LEH) shares closed down nearly 10% Tuesday as investors worried about dilution from a potential capital increase, and as the firm disputed rumors that it had borrowed from the Federal Reserve.Investors' concerns about Lehman's liquidity and ability to fund its operations were so great that Lehman issued a statement Tuesday afternoon denying rumors it was forced to borrow

Lehman Cut from A+ to A by S&P

2008-06-02T15:08:00.000-07:00

Morgan Stanley, Merrill Lynch & Co. and Lehman Brothers Holdings Inc. plummeted in New York trading after Standard & Poor's lowered credit ratings for the investment banks, saying they may have to book more writedowns on devalued assets.Morgan Stanley, the second-biggest U.S. securities firm by market value, was cut to A+ from AA-, S&P said today in a report. Merrill Lynch, the third-biggest,

REO Keeps Rising

2008-06-01T18:57:00.000-07:00

Lenders and investors in mortgages owned about 660,000 foreclosed homes in April, up from 493,000 in January and 231,000 in January 2007, according to First American CoreLogic ... The April total works out to about 1 in 7 previously occupied homes available for sale nationwide (4.55 million). The lenders were slow to reduce prices at first, apparently hoping for "better market conditions". Now

Google Blog Search via Google Reader of any mention of "Lehman Puts"

2008-05-30T16:28:00.000-07:00

Man look at all the volume on the June 17.5 puts, and it was right at the end of the day. 7,184 contracts traded.Something has to be up.There are about 120,000 put contracts outstanding at-the-money and down to the 17.5 strike.

Cramer's Take on Lehman from Google Finance Discussion Boards

2008-05-30T12:31:00.000-07:00

Jim Cramer made the following statement concerning Lehman Brothers:It is time. It is time for Lehman to put up its defense. Not the talking one. But the one it used in 1998 when everyone thought it was a goner. It needs to go in and start buying its stock. Think about it. If Lehman is right and self-styled nemesis David Einhorn from Greenlight Capital is wrong about the firm needing capital, this

House Price Drop Worse than the Great Depression

2008-05-29T15:57:00.000-07:00

AS HOUSE prices in America continue their rapid descent, market-watchers are having to cast back ever further for gloomy comparisons. The latest S&P/Case-Shiller national house-price index, published this week, showed a slump of 14.1% in the year to the first quarter, the worst since the index began 20 years ago. Now Robert Shiller, an economist at Yale University and co-inventor of the index,

Spreads are Widening Again!

2008-05-29T09:39:00.000-07:00

The debt markets in the US and Europe have begun to flash warning signals yet again, raising fears that the global credit crisis could be entering another turbulent phase.The cost of insuring against default on the bonds of Lehman Brothers, Merrill Lynch and other big banks and brokerages has surged over the last two weeks, threatening to reach the stress levels seen before the Bear Stearns

Greenlight's Einhorn Shorting Lehman

2008-05-27T10:47:00.000-07:00

Speaking Wednesday [May 21] at the 13th Annual Ira W. Sohn Investment Research Conference in New York, Mr. Einhorn said he was short Lehman Brothers stock because he remains skeptical about Lehman’s accounting...In a book published by Wiley to be released this month called Fooling Some of the People All of the Time: A Long Short Story, Mr. Einhorn gives a detailed narration of his multi-year

Level 2 & 3

2008-05-26T15:52:00.001-07:00

When you add up all the Level II assets by just the eight largest holders in the U.S: JP Morgan (JPM), Citibank (C), Bank of America (BAC), Merrill Lynch (MER), Goldman Sachs (GS), Bear, Morgan Stanley (MS) and Lehman Brothers (LEH), it comes to a staggering $5 trillion - nearly half the size of the economy. Level III assets are nearly $600 billion.Is the Fed big enough to bail out all these

FT Interview Nouriel Roubini - $1 Trillion Floor

2008-05-26T10:00:00.000-07:00

Inflation's Back

2008-05-25T17:51:00.000-07:00

Double-digit price rises are about to afflict two-thirds of the world's population