I'm afraid Hydroblunt has fallen into the trap of 'if you can't beat them, join them' A can see the same pattern of balls to the wall put options trading, forced hedging by options MM's, and rumor mongering in LEH this week. *IF* the rumors are false, and they can be traced to individuals who knowingly passed those rumors, then those folks should be given hard time. Not to mention disgorgement of 10X the profit made on the scam. These attempts to 'run the bank' are going to cost YOU money in the long run, don't be so sanguine about it.
You haven't had a fucking idea since you started posting here. Just because you have the shield of the internet, it doesn't protect you from showing your ignorance. And you do. Come up with an original thought backed by some facts. How do you explain the huge fails that day, taken from SEC Data? Let's here it. Who planned the fails along with the CNBC reports? Why did Fuld say he had proof bear was raided? Where did he get the data in that short a period of time - no subpeona, no writ? Come on there, Einstein. It's time to do some diggin if you wanna play. You can't handle the truth.
I believe I said Lehman was a trading long, except I'd scale out, because perhaps Einhorn or his lackies would do a bash job over the long weekend........ Ta Da: http://money.cnn.com/2008/07/02/news/companies/lehman_sloan_boyd.fortune/index.htm right on time. Amazing, isnt' it? Amazing we can see it but the regulators don't? Fact is, they do: they know. Go to Deepcapture.com and search for Roddy Boyd. You'll see some interesting things. PS. Never read the articles. Kinda know what they say before hand. And I never looked at a chart on the Lehman call. Don't have to. No edge into Monday, but they'll be one. This isn't over yet. By a long shot.
Been lurking on this thread, have to say the Vanity Fair article is good but too much about CNBC. Anyway, regardless of how it happened it happened. I wonder what the probability of a drop of this magnitude was as of october 2007 when it really started to drop off a cliff. I guess I should be saying is what were 10 strikes if there were any on the mar 2008 puts.
As an aside I remember that BSC was one of the only banks not to help LTCM. People in the markets remember this vividly I know I do and I am fairly young. I think the higher you go the more political it gets. Sad ending for people stuck with the stock.
great article assuming one reads carefully given the suspect article's sources . to your question: hard to say because nobody would trade so much deep OTM options in Oct07 (and therefore price would reflect liquidity mark up as opposed to probability). You could get some probability of default from 6M CDS assuming 'some' recovery but this tenor is usually illiquid too - and 6M recovery swaps for BSC likely did not exist. Also the probability implied this way would seem lower because CDS would trade cheaper due to a possibility of a takeover.
I'm a strong supporter of naked shorting and believe in less regulated capital markets. So what happened in BSC is perfectly a legit game of the market. For example, what happened at BSC would not likley happen at GS.
It does work that way. If you buy in some of thefloat and then you tell you shareholders that they have to tender their stock to get new stock. The people who purchased stock will tell their brokers to get the stock. the brokers will call the short sellers. Either the broker loses or the person short loses big time as they have to cover from a super squeezed market. I have read that it has been done. As someone who knows a bit about corporate law and governance of small companies I see no reason why large companies could not work the same way. However the foundation for such a play is that the company makes money -therefore the stock has some book value. Basically naked shorting should not work past a certain value area. If a stock has not value then the naked shorts can win. When CEO's blame the shorts - that is the first sign of an incompetent CEO.