Hey guys, I was just wondering if someone could explain to me the details of the Bear and Lehman meltdown. What I am having a hard time understanding is when credit agency downgrade a company and request that you obtain more capital to cover liabilities, what liabilities are you exactly trying to cover? When they refer to “marks” as conservative or aggressive what is that referring to exactly? Also if anyone would like to give a comprehensive overview about the whole Bear Fannie, Freddie, Lehman and Merrill situation that would be appreciated. Thanks Rou
Well, it’s a little involved. Maybe you should do a little research on it first? Liabilities are things like bonds of which LEH apparent owes C something like $130B (wow!). “Marks” are valuations that you give securities that are not actively traded. They are also people who bought financial stocks anytime in the last 6 months.
I saw a headline today, “Fitch downgrades Lehman.” Thank you Captain Obvious.