You guys are acting like it was LEH only. It was the whole market that gaped up on the 1st. My guess it has something to do with one of the April fools jokes going around.
http://youtube.com/watch?v=6-qThuhHXrs Think outside the box. This is the "Army of Davids". We started this type thing with Naked Shorting. Now, the politicians have to follow. Notice the comments below about 'civil unrest'. This is extrememly important. The Govt is well aware of the possibility. Of course, CNBC thinks the bottom is in. You decide!
I was a mortgage broker for a while and trust me lehman bought ALOT of subprime and no-doc loans. Is there a way to find out what a company like lehman really has on its books as far as types of loans? I always here some guy on CNBC say so-and-so was a large buyer of subprime loans. How do they find that out?
You can have a lot of stock and at the same time buy a lot puts to hedge your positions. LEH/GS didn't have to take much loss because of the hedge. On the other hand, banks which bought a lot of CDOs are like the put writer, end up lost Billions even without owning any subprime loans. LEH prefers not to let the world know that they didn't suffer as much as the banks... really hurts a lot of feelings of other people on the bank side.
Isn't the first when the 401k fund managers get their new cash? Maybe that's the source of some buying??? That said it's fairly obvious the market can be and is manipulated. You can complain all you want, or you can trade with them and use it to your advantage.
Not collusion, just big institutional short covering and taking long positions for next quarter after option expiration from the prior quarter. This is not an unusual occurance. IMO, it is the big fund program trading on days like that which tend to make the market uni-directional.
I have in my notes that March is typically the worst month in an election year, and that 80% of the time a 10% down quarter is followed by an up quarter. These are likely co-factors for the 04/01 lift across the board, LEH included. Good trading all.