According to this article, LEH sold almost all its risk holdings to MER and MS last quarter. MER and MS had to raise $20 bln to cover the loss. http://www.bloomberg.com/apps/news?pid=20601109&sid=aiVAQ4mepPBw&refer=news
MS stated that its Level 3 is mostly property - although it tranferred a few billion from Level 2 to 3 after that. Covered MS on Friday on gut feel supported by pending results and more resilience than I would have expected on the BSC news, govt market distortion being aimed direcltly at financials with market at a key chart point, and with BSC gone the bulge bracket business gets spread beteen 4 not 5 banks. Oh well, still short a lot of other stuff and there are better R:R tradeoffs than holding MS now. ratioale for the trade was FASB 157 not being delayed, MBI and MBK not being AAA and AAA rated defaulting slime that were index constituents not being kept at AAA and that commercial property was probably priced in to a lesser extent than Subprime so MS had more chance of continueing downwards and less chance of snapping back on propaganda.
When Morgan Stanley and Merrill were getting into these markets, Lehman was getting out. ... Fuld, like Lloyd Blankfein, his counterpart at Goldman, has avoided diluting shareholder value, while rivals have had to seek cash infusions to shore up capital. Merrill raised $12 billion from outside investors following subprime writedowns. Morgan Stanley sold $5 billion of debt convertible to stock. ...
Yet? 40 banks to lend USD2Bn to a major IB is telegraphing something about LEH, or omething about capacity to lend, or both.
All news since Friday should be considered classified, United States of America is in war. LEH is just a decoy (dressed in a similar distressed uniform it is one of the best equiped and strongest - the other oneis GS),... by Tuesday when LEH shorts got crashed, it will lift all the financials and the market, then the two MM who got heavily wounded can sneak by on Wednsday. Do you see despite LEH sharp drop on Friday, its calls were barely changed.
UBS AG, Europe's biggest bank by assets, fell the most in more than nine years in Swiss trading after reports that the company may cut as many as 8,000 jobs, propose a new capital increase and sell businesses. Bloomberg ______________________ Layoffs start. Soon you will see numbers like 30,000 being cut in major Institutions. I believe the majority of the cuts for UBS may be overseas. However, this is only round 1 of many more cuts to come.