"Unless something is settled, it's going to be a bloodbath Monday"

Discussion in 'Wall St. News' started by Daal, Sep 13, 2008.

  1. Daal


  2. yes there is..
    just to make an example if lehman doesn't pose that big of a systematic risk to the US financial system.

    Im actully hoping for the chpt 11.... marrill chpt 11 .. wamu chpt11 so we can get all this garbage out of the way and start rebuilding the financial system...

    The more they try to delay things.. the worse its going to be for the economy.
  3. Agree 100%.

    If the system can take it, they might do it.

    From what I read, if counter-parties to lehman or CDS writers on their debt can layoff or hedge that loss to in the event of liquidation to near 0, they might junk it.

    Seems they might open their books and look at aggregate net long/net shorts on debt exposure, then exchange positions within themselves to ensure no one is net long or short = totally hedged.

    That sacrifices all the premium earned on CDS writing (or profits earned from purchased swaps that get triggered), but prevents a cascading domino collapse.
  4. how much debt does lehman have outstanding?

    I would think the CDS writers for lehman debt have been charging huge premiums for a while now.. so even with a hedge of 20 cents on the dollar for those CDS ... they shouldn't see major losses but thats just my thinking...
  5. Eddiefl


    Barclays has a bid on the company, if they can contain mortgage loss. Or buy it without purchasing the mortgage component,

    Its on the front page of Bloomberg
  6. Daal


    if the banks walk away and the fed backstops, imagine the outrage for a bailout of a US firm to the benefit of a british bank.. boy are they gonna hear on that congress meeting

  7. f*&^ the congress.
    Those cowards could have prevented all this from happening in the first place.. yet they were taking money from all these wall street firms/hedge funds during the real estate boom.

    They don't represent the american people.. they represent the corprations and the rich backing their campaigns.
  8. Around 400 Billion.

    From what I've read, most CDS debt is insured at a level of 10 times actual outstanding. Thats the problem....

    So for Lehman, if that ratio holds, theres something like 4 Trillion owing on Lehmans debt in the event they go under. Hence the cascading domino fear.

    I dont know how much CDS was written for Lehman. I'm sure that information is out there but don't have it.

    Premiums, again, don't know. But Fannie May premiums were 2.5% of bond face value, per year, before they went under. Not enough to offset the actual payout, for sure.
  9. You're making a mistake I've made at one point in my life. You still believe adults are in charge.

    Yeah. Everything is in play. Anything is possible. The system could collapse Monday. Maybe Tuesday. Maybe a month from Tuesday. How many people outside of us have any idea this is happening? CNBC isn't telling them. ON Today, they are making a Waldorf Salad and having the Jonas Brothers perform.
  10. They can't file chap 11. Chapter 11 is for companies with a future.

    LEH is so fucked up there is no hope. They would go straight Chapter 7.

    #10     Sep 13, 2008