Sunday, September 14, 2008


Looks like I called it right -- Lehman and Merrill disappeared this weekend. I didn't expect Merrill to go so fast, but apparently the Fed gave them an ultimatum. BofA bought them for $44B. The era of the independent broker-dealer is over: only Morgan and Goldman remain.

AIG is next -- they need to raise $40B or endure a downgrade from credit agencies.

Forget about $200 oil (it's under $100 already) and inflation (for a while)-- we're headed into a recession in the US and a serious slowdown worldwide.

It looks like we'll have a mark to market soon :-) Main Street is going to lag for a while -- the final 20% capitulation in housing prices will still take a year or two.

Stockpile food and convert everything to Swiss Francs...


Anonymous said...

Has all of this turmoil decreased the attraction of finance-related careers for physicists?

Anonymous said...

Lehman isnt dead yet.

Fould is gonna get another laugh if not the last laugh.

being reported by cnbc that leh is filing chapter 11

thats reorganization, not liquidation.

still time for the board to allow enhanced compensation for CEO and others before the lid on the coockie jar is shut.

ben, hank, and chris will do everything they can to kick the can down the road until after the first tuesday in november

dont believe it

ever hear of the TAF window at the Fed?

how about the PDCR or the TSLF

all ways that the fed gets around the lender of last resort provision that was not intended to back stop the unregulated investment banks...but there goes your tax dollars anyway.

if you dont understand yet this is all about fraud consider this

tonight the federal reserve announced it would accept stock shares (equities) as collateral at the Fed window.

just think, Lehman, chap 11 can still conduct business and as a PD (primary dealer, can purchase stock and trade it as collateral to the fed for AAA US securities ( which are as good as cash)

the looting will continue for a while but not forever

the pig men got so greedy that they have destroyed the system that enriched them

George Shen said...

The Chinese authoritarian regime looks more and more like a winner these days. Their financial executives, central bank regulators and government legislators must laugh their ass off if the U.S. government officials still want to lecture them on the “free financial markets”. Hey, after all, Chinese Government is the top foreign holder of Fannie Mae, Freddie Mac Bonds with $376 Billion in Chinese Agency Bond Holdings.

who is the better economist, Krugman or Mankiw? Now I know the answer.

Anonymous said...

I was wondering the other day if some supercheap LEH calls would be appropriate. Those guys might be collectively dumb, but up against the wall, they are going to find out how to save their own a$$es. Enough powder for one last shot to enable their escape.

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