September 15, 2008
Turning in Their Maseratis*
Lehman Files for Biggest Bankruptcy as Suitors Balk
“The 158-year-old firm filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. Lehman listed more than $613 billion of debt … and $639 billion of assets …. Rival banks and brokers today held a session for netting derivatives transactions with Lehman to reduce uncertainty in the derivatives market. That move means canceling trades that offset each other….
‘Bankruptcy severs all counterparty contracts, and therein lies the systemic risk. This would be the first time we’ve tested how much damage will be done by a bankruptcy.’”
Keeping an eye on the very short-term interest rates, among a hundred other things.
* The title of the post was inspired by Jimmy Rogers who is fond of saying, “Let those guys on Wall Street turn in their Maseratis….” They are now!
September 15th, 2008 at 9:18 pm
Is this what capitalism looks like? I haven’t seen it in a while. So used to the bailouts. Lehman not too big to fail, I guess.
September 15th, 2008 at 9:23 pm
jim rogers proven right again- shorting investment banks until they are in the single digits.
September 15th, 2008 at 11:15 pm
i hope they turn in their mortgages too, i want NYC rental prices to keep fallin!
September 16th, 2008 at 12:47 am
look at AIG today!! look at the implied volatility on the front month $2.50s.. yes, over 1,000!! with 4 days left.
September 16th, 2008 at 5:10 am
Yep. AIG is a wreck. The volume today was insane.
September 16th, 2008 at 5:34 am
31.70 on the VIX. $CPC at 1.47!!! Possible rate cut coming tomorrow. Anyone sense a reversal coming soon?
September 16th, 2008 at 7:55 am
John Murphy mentioned the VIX and CPC numbers and said the intensity will take a while for a reversal but the fear is here. We need to get rid of crashing broker/banks first. I loved watching the live time and sales ticks on AIG, a great way to learn how stocks trade in fast foward.
September 16th, 2008 at 9:35 am
The ISE Sentiment Index (a put call ratio) was a rather bland 104, which doesn’t show a bit of panic. Looks like a pretty vicious countertrend rally into 11 AM sharp following the gaps down and then a terrible afternoon … as I say, looks tricky to trade except for maybe XLF which was more or less straight down.
September 16th, 2008 at 10:20 am
What we saw today in Lehman Brothers was the absent of “enlightened self-interest”.