Lehman Bros.

[McNasty]

Yeah - this blows. Sat here now and no-one has the first idea of what is going to happen next... it's great.....
Same as Mark, just sat here waiting to see if i get paid.... "fortunately" i already had a plane ticket booked to get back for a wedding, guess i make it a one way ticket now!!

Anyone got any job openings?

I know it's no help job-wise but there is always room for you to play for ShrimperZone III's on your return.

 

[fatshrimp]

Lehmans had been rumoured for several months to be in trouble. Last week they brought forward a results announcement to try to quell rumours. I guess the surprise is they haven't been bailed out by the Fed - perhaps they're running short of cash!

Making an example of them more like, and lessening the likelihood that they'll have to do it again. Who's next?

Question is now though, will they step in and rescue another firm if needed? What exactly makes a firm salvagable now?

The 'no action' from the Fed was on the cards I feel, but it still caught some people out. I feel sorry for the people at Lehman, and can't help but think that anyone of us could be next.

 

[EastStandBlue]

Lehmans had been rumoured for several months to be in trouble. Last week they brought forward a results announcement to try to quell rumours. I guess the surprise is they haven't been bailed out by the Fed - perhaps they're running short of cash!

With AIG demanding a $40bn bail out, it'll be interesting to see what happens there...

 

[Matt the Shrimp]

Who's next?

HBOS? They finished down only 17%, having been over 30% down at one point today. Shocker.

Basically, anyone who has significant balance sheet activities in derivatives looks proper knackered at the moment. As for "not seeing it coming", try telling that to Warren Buffet - he foretold this precise story 5 years ago...

Clicky - page 12-13 of this pdf is an excellent summary on derivatives

He's rich for a reason, I guess...

Matt

 

[Holy Joe]

HBOS? They finished down only 17%, having been over 30% down at one point today. Shocker.

Basically, anyone who has significant balance sheet activities in derivatives looks proper knackered at the moment. As for "not seeing it coming", try telling that to Warren Buffet - he foretold this precise story 5 years ago...

Clicky - page 12-13 of this pdf is an excellent summary on derivatives

He's rich for a reason, I guess...

Matt

I think Goldman Sachs has the most mark to myth assets on it's balance sheet (not sure if outright or as a percentage of total assets). Seems to have survived the credit crunch quite well so far - probably due to not writing down assets!

 

[MrB]

I'm pretty sure none of my friends in the city are directly affected by this.

Isn't that more correlated to your lack of friends rather than the lack of city firms being directly affected?

 

[* ORM *]

Lehmans had been rumoured for several months to be in trouble. Last week they brought forward a results announcement to try to quell rumours. I guess the surprise is they haven't been bailed out by the Fed - perhaps they're running short of cash!

not a good day to have Lehmans as one of your clients. Left work around 40 minutes ago. The Fed not bailing them out is not a surprise and there are vast differences between them, Bear Stearns and AIG who I suspect will get help. For those directly affected there is no comfort but I see this as the death of fictitious accounting and shady practice masquerading as bone fide business trading. An asset valued at 1 in the Market needs to be valued at 1 plus a bit. Unrealised P and L needs to be posted as real money lost. Ultimately when the dust settles it will be the pension fund trustees, actuaries and risk managers who will direct that if there is no transparency they will no longer follow the herd and just apply common business sense.

There is much more carnage to come in the next few weeks.

A fantastic time to be a lawyer.

 

[sufcintheprem]

A fantastic time to be a lawyer.

Or a bookmaker, seemingly.

 

[* ORM *]

it was being a bookmaker and a very poor one at that causing Lehmans demise and the main reason a buyer or Fed bale out failed. Not a good time for anyone whose companies are overexposed to the derivative market.

 

[Aberdeen Shrimper]

We are all doomed!!

 

[MrB]

not a good day to have Lehmans as one of your clients.

Were the staff spending all day in the toilet then leaving more mess for you to clean than usual?

 

[Mad Cyril]

I've just been for a stroll around canary Wharf and it is much quieter than usual without the Lehmans employees.

 

[Holy Joe]

I've just been for a stroll around canary Wharf and it is much quieter than usual without the Lehmans employees.

& presumably BOA employees chained to their desks concerned about the impending synergies with ML?

 

[sufcintheprem]

it was being a bookmaker and a very poor one at that causing Lehmans demise and the main reason a buyer or Fed bale out failed. Not a good time for anyone whose companies are overexposed to the derivative market.

My finance lecturers unanimously warned us that there was always a likelihood that this would happen because of (hopefully not doing them a disservice) the overextending nature of trading in relation to real assets and the knock-on effect of a mistake in valuation or default of a debt.

This reminds me of the top goalscorer market we had (different scale obviously). The guy kept trading across the whole market at a certain price and this created more captial he could then bet with again. As soon as the price of one part was shown to be false, the rest were converted from large assests in to large debts.

Part of me wishes I had followed my degree discipline and opted for a financial job but not so much right now, obviously.

 

[Stats]

Were the staff spending all day in the toilet then leaving more mess for you to clean than usual?

Ormando has always classed himself as a good sweeper.

 

[Matt the Shrimp]

HBOS still tanking today, I see - although the company that most people think is in the deepest sh*t is AIG. This piece in the Grauniad reckons its a matter of when, not if...

Did Man U get their sponsorship money up front...?!

:p

 

[fatshrimp]

AIG shares at 1.85% down over 60% at NY open today.

True meltdown on the cards if they are allowed to go. Some estimates reckon there's a day left for them to find U$75bln.

 

[South Bank Hank]

Any thoughts from the financial whizzos on here as to what effect this is going to have on the wider economy?

(Best of luck to Usual Suspect and Benji!)

 

[Napster]

Some estimates reckon there's a day left for them to find U$75bln.

Have they looked behind the sofa? I'm always finding cash down there.

 

[Napster]

Did Man U get their sponsorship money up front...?!

:p

I'm sure the European champions, even though loaded with debt themselves, will find a sponsor prepared to pay top whack. Maybe some Russian company - we're creaming it at the moment from Russian sponsorship...