http://finance.yahoo.com/tech-ticker/article/7143/Lehman-Too-Big-to-Fail%3F From Silicon Alley Insider, March 17, 2008: Bear Stearns (BSC) is gone, so the markets are wondering who’s next. The leading contender? Lehman Brothers (LEH). Lehman’s stock dropped 15% on Friday, and it’s down another 33% in pre-market trading. Some specific concerns: Like Bear Stearns, Lehman is relatively small and undiversified. Like Bear Stearns, Lehman just reiterated that its “liquidity position is strong.” Like Bear Stearns, at least one of Lehman’s trading partners is cutting it off: The WSJ reports that Southeast Asia’s biggest bank, DBS Holdings, has asked traders not to enter new transactions with Lehman Brothers. “DBS has sent an internal e-mail saying it would not deal with Lehman Brothers from now on.” Like Bear Stearns, Lehman is levered about 30-to-1. Like Bear Stearns, Lehman chose not to raise additional capital last fall. Like Bear Stearns, no one has any idea what’s really on Lehman’s balance sheet (including, probably, Lehman) Unlike Bear Stearns, says an analyst at ING, Lehman is NOT too big to fail, which means that the Fed might not be in such a panic to bail it out. If Lehman is hellbent on following the Bear Stearns playbook, it will now trot Dick Fuld out onto CNBC to say that the bank is in great shape. And then, a day or two later, it will go bankrupt.
I saw that article. You know who wrote it? Henry Blodget Funny how he appears and is writing in the midst of another recession
There is enough liquidity with LEH to meet “THE” cricis which BSC could not. Its reporting earnings tomorrow and most likey will fall short of the consencus EPS-thats y such volatility. My bet is that it will emerge quite stronger than most. Read this article-puts things in perspective http://www.bloomberg.com/apps/news?pid=20601109&sid=a59l0LdbV_sA&refer=news#
Pack up wifey and the kids and grab a few shotguns and some food and head to the cellar and hatchet down the doors. RISK is EVERYWHERE, and who survives will be more art than science. Ever so Twister or Jurassic Park? The market for BB’s right now is like both, all at once!!!
From today’s WSJ: “Mr. Hintz, a former chief financial officer at Lehman, said Merrill and Morgan Stanley appear to have the strongest funding position, with Lehman next and Goldman the weakest in terms of liquidity.” This is the first time someone mentioned GS.
drs Wrote: ------------------------------------------------------- > I saw that article. You know who wrote it? > > Henry Blodget > > Funny how he appears and is writing in the midst > of another recession LOL!!!
“Pack up wifey and the kids and grab a few shotguns and some food and head to the cellar and hatchet down the doors. RISK is EVERYWHERE, and who survives will be more art than science. Ever so Twister or Jurassic Park? The market for BB’s right now is like both, all at once!!!” A switch to decaf may be in the cards…
Hah I was just about to post a topic on this.
Down 46%… Not on vol like BSC on Friday but, this is scary.
I can’t find the article I read this in. Apparently MS, GS, LEH, and MER are all leveraged in a similar fashion as to that of BSC. Il keep lookin for the article b/c it has some interesting statistics.
I think the hedge funds are taking advantage of the “fear factor” and shorting LEH’s stock big time to improve their positions…LEH has abundant liquidity… LEH learnt a BIG lesson from the 98 crisis…its not going to happen again…
Sure. How many people at LEH in 1998 are still there?
well for one-their CEO has been with the firm since he started his career with LEH in 1969… LEH’s business is run by much much more sound management than bear’s…the 98 crisis was enough for LEH to be prepared for any liquidity crisis in the future… I still say LEH is in good shape and investing in it at its current price is a golden opportunity
JoeyDVivre Wrote: ------------------------------------------------------- > Sure. How many people at LEH in 1998 are still > there? a fair amount of people, actually. among the leading investment banks, LEH has historically had one of the best retention rates of employees…even with the crisis in the 2001-2002 timeframe, LEH probably did the least to scale back on headcount when many other firms on the street were slicing and dicing. that’s why when the job cuts came around starting a couple weeks ago, everyone at the firm was so surprised
I started at LEH in 2000 and am still here.
pimp Wrote: ------------------------------------------------------- > I started at LEH in 2000 and am still here. How is the mood over there?
Everybody is waiting for tomorrows results
Business as usual.
… and after LEH, JT Marlin?
lol, took a screenshet for memories…will make a great t-shirt http://www.bearstearns.com/sitewide/careers/index.htm