UPDATE III: AIG is desperately seeking to raise 30-40 billion, in order to avert a credit downgrade. Also, with a few hours left until Asian trading begins, I believe it is fair to say Lehman will be liquidated. We are living in interesting times.
Should BofA go ahead and take out MER, expect the wagons to circle MS.
Whatever the outcome, just know, you will remember the last trading year for the duration of your lives, with great clarity. History books will reference this era and label it and the people in the forefront as “stupid,” “gay” and everything in between.
UPDATE II: Apparently, all buyers have walked away from LEH. And, to muddy the waters a little further, [[BAC]] may buy MER for $25-30 per share. How will the street digest the collapse of LEH, while another major investment bank catches a 100% premium bid? I have no idea.
One thing is certain, a BofA buyout of MER is a defensive one. They (banking fools) are trying to eliminate future headline risk.
UPDATE: Just to recap this weekends developments:
Paulson and Co. refused to bailout the buyer of Lehman Brothers Holdings Inc. [[LEH]] , whomever it may be. As a result, Barclays PLC (ADR) [[BCS]] has walked away from talks. And, rumor has it, so will Bank of America Corporation [[BAC]] .
The closer we get to Asian trading, the greater the likelihood Lehman may fortune cookie its way into a bankruptcy filing.
Video UPDATE: Cramer’s real position on housing, a few years back. I am sure he would like this video pulled.
[youtube:http://www.youtube.com/watch?v=BVl9SQ-KVmE 450 300] If you enjoy the content at iBankCoin, please follow us on Twitter
First thing yesterday morning I turned on CNN Headline News. First commercial was for AIG Life Insurance. They actually said something like “Financially sound, AIG; We’ll be there in your time of need.”
I thought I was watching an SNL or MAD TV spoof commercial.
Very funny!
Mr. FLY, stop trying to undermine me.
And someone, please tell Jamie Dimon, NO MORE CALLS!
Looks like the cowboy contrarians win again
http://www.bloomberg.com/apps/news?pid=20601087&sid=aH9moOgAuYUA&refer=home
Buying opp in the refiner stocks tomorrow morning? Even without the Ike spike, margins should be better going forward, no?
JJ2000426 said…
For those who wonder what happened to JJ, I was doing some research and lo & behold…Do I detect a little desperation??
http://marketmovers.blogspot.com/2007/07/automation-does-not-equal-profitability_18.html
“SWC down another 8.25% today. In the past three days it dropped a total of 20%. SWC is the only palladium and platinum producer in the US. Palladium and platinum are very important precious metals that see price trippled in the past three years. This is a stock with extremely bullish fundamentals and this may well be the CAPITULATION event where you get an excellent entry point. See my analysis of the SWC fundamentals.”
No way the refiners trade down tomorrow.
Excellent video.
Check out this Ebay listing. It already has one bid for $500.
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=320299216040
The pending Lehman deal is very reminiscent of the Sunday night special news bulletin from Paulson and crew on Bear Stearns. Sunday used to be a day off for the markets. Now it’s the day deals are done.
No bid for LEH from Barclays or BAC. Looks like a big down day for the financials on Monday.
LEH’s portfolio must be unbelieveably toxic.
I would be desperate too if I had my retirement money in two stocks on margin. The good news is that he wont come back here until they go back up, which will be never.
SNORRRTTT!!! :-))
I posted the video on Evil Speculator – hope that’s okay…
“LEH’s portfolio must be unbelievably toxic.”
You think? 😉
Seriously, once you can’t even practically ‘give it away’ you know it’s completely toxic. Nobody wants to touch LEH with a ten foot pole.
“Lehman Brother’s accrued bonus pool for the year so far is estimated to be worth in excess of $3 billion, according to one analyst, while the bank was valued at less than $3 billion at close of trading Thursday night.
Compensation allocated to Lehman staff this year totals about $6.2 billion, roughly half of which will be money directed towards the bonuses, giving a total pool for the first nine months of the year of $3.1 billion, according to his calculations.”
LEH has a market cap of around 2.5 billion as of the close on Friday. Does the lack of a buyer at this level imply that their book value is actually negative?
I respect the man that buys domains to sell on eBay in the wake of impending doom. Great find Boca.
PN – Awesome find. I miss JJ in the same fashion that one might miss a conjoined fetus attached to one’s face.
“Lehman Brother’s accrued bonus pool for the year so far is estimated to be worth in excess of $3 billion”
Not surprised. To anyone hoping that some of fat cats finally will get ‘punished’. Not gonna happen. The ‘smart money’ has already bailed out a long time ago. All that cash they’ve been squeezing out of their respective domains has long been stashed in dark pools, offshore accounts, investments abroad, etc. All that’s left are the puppets put in place to manage the slow unraveling of the leftovers. This country is done for – they knew exactly what was coming but didn’t care. These cats are going to retire on their own islands with their yachts, hot bitches, helicopters, the works…
So, if you’re hoping that ‘Wall Street’ is finally getting what’s coming to them, maybe a few of them yes (the lower ranks for sure), but the smartest guys in the room skipped town a long time ago.
What happens when WM goes down and someone has an account with less than 100K and safe deposit box. Is there any danger to the money in the account or the contents of the safe deposit box?
thanks.
I say, cheerio gents. Bit of a sticky wicket, what? The Lehman row and all that rot. That Paulson chap, quite the jolly little wanker. We told him “bugger off, old bean, we’re geared up enough without your Yankee bollocks”.
So tally-ho men, I fancy we’ll be buying SKF up to our arse at the crack of dawn… whilst eating prawns and drinking expensive sherry.
Derivative traders open session to reduce Lehman risk
September 14, 2008 3:01 PM ET
ReutersAll Reuters news
NEW YORK (Reuters) – An emergency trading session has been opened between Wall Street dealers with Lehman Brothers counterparty risk, the International Swaps and Derivatives Association said Sunday.
The session will run from 2 p.m. to 4 p.m. and will involve credit, equity, rates, foreign exchange and commodity derivatives, the ISDA said in a statement.
The aim is to reduce risk associated with a potential bankruptcy filing by Lehman Brothers Holdings Inc.
“Trades are contingent on a bankruptcy filing at or before 11.59 p.m. New York time Sunday,” said the statement. “If there is no filing, the trades cease to exist.”
Copyright 2008 Reuters
This seems appropriate:
http://www.youtube.com/watch?v=KjsRj8MhaYg&feature=related
curse me and my egregiously small amount of SDS shares.
Wall Street Journal just reported Merrill lynch and Bank of America are in serious merger talks.
Bank of America is in advanced talks to buy Merrill Lynch for at least $38.25 billion in stock, people briefed on the negotiations said on Sunday, as a means to preserve that investment bank while Lehman Brothers looks likely to collapse.
A deal, at between $25 a share to $30 a share, could be announced as soon as Sunday night, these people said. Merrill shares closed at $17.05 on Friday.
Bank of America, the nation’s second largest bank by asset size, had been mulling buying Lehman, perhaps in a consortium with other financial players. But with financial aid from the government looking unlikely, Bank of America has moved on to Merrill, these people said.
As Lehman began to totter in recent weeks, investors feared that Merrill would be the next victim of the credit squeeze. Shares in Merrill, which has already reported tens of billions of dollars in losses, have plunged more than 68 percent over the past year.
Breaking News….next great name to falter…wsj
American International Group plans to disclose a comprehensive restructuring by early Monday morning that is likely to include the disposal of major assets including its aircraft-leasing business and other holdings. Full story coming shortly.
http://online.wsj.com/public/us
Cramers Mad Money mantra has been buy & homework, or something like that. Its unreal how he opens his yap before he completes his own homework. Even anonymous internet pikers knew the subprime problem was potentially way worse than his joke estimate of $500 billion tops. Lets not even get into Alt A, Level 2 & 3.
Good traders know when not to trade. Good journalists know when a piece is not yet ready for prime time.
Dude needs to finish his homework before he misleads & loses his remaining viewers.
What does this mean?
http://www.screencast.com/users/mmehrle/folders/Jing/media/66653e59-4ffc-4d2f-8a3a-d75dfb740a46
boomer….yen is dropping from that pop now in the futures from up 220 to only up 156….so lets see….9433 last price
Theres some nutty action all over the place today. Oil down, yen down, euro up … derivatives gone wild. Lets see what happens tomorrow but I’d say the shit hitting the fan is not far off.
If true, Short BAC on the absurd premium offered for MER. Why pay $25-30 when you can buy all the MER you want on the open market for $17. And if LEH files for bankruptcy, you could get it for less. Fishy fishy. Don’t make sense to me but what would I know.
Just noticed the latest front page quote:
“IBC will put your blog into conservatorship”
I am LMAO!
To all of The Waffle House haters and lovers- Just before I caught my plane this AM I had breakfast at a Waffle House in Tennessee. I had the pecan waffle, double order of hash browns smothered in onions, and a large bowl of grits. The 250 pound waitress screaming the orders at the cook and sweating into my food was a bonus and they didn’t add an extra charge.
Once thing is certain, a BofA buyout of MER is a defensive one. They (banking fools) are trying to eliminate future headline risk.
Or it could be a great deal Fly. Merrill is a great brand name.
Waffle House rules.
Sounds like you got one of the skinny waitresses. Sorry you missed out on some toothless Tennessee curves.
Fly!
There is no question about what will happen over the next couple of days.
The indices will burn.
Dow will hit 10000
FTSE will hit 5000
DAX will hit 6000 (or less)
You know my record so far!
Mike
Stolen from Mr Mortgages Blog, stolen from Roubini’s blog earlier in the day,
“I also argued in follow-up pieces that, in a matter of two years, no one of the remaining independent broker dealers (Lehman, Merrill Lynch, Morgan Stanley and Goldman Sachs) would survive as:
1. their business model is now impaired (securitization is semi-dead);
2. they will need to be regulated like banks given the PDCF support and thus have lower leverage, higher liquidity and more capital that will erode their profitability;
3. Their severe maturity mismatch – borrowing very short term and liquid, leveraging a lot and lending and investing in more long term and illiquid ways – makes them very fragile – in the absence of deposit insurance and in the presence of only limited LOLR support by a central bank – to bank like run that are destructive even of illiquid but otherwise solvent institutions.
Thus all such broker dealers need to merge with larger financial institutions that have a commercial banking arm and thus access to stable and insured deposits and to true LOLR Fed support. That process of unraveling of independent broker dealers started with Bear Stearns; now it is moved to Lehman; tomorrow Merrill Lynch will be on line; and Morgan Stanley and Goldman Sachs will be next.
No one of them can and will survive as independent entities. So, the Fed and Treasury should advise them all to start finding a large international partner (international as almost no domestic partner is now sound to take them over) and merge with such partner before we get another Bear or Lehman disaster.”
lol @ Wallstreet
Great article by Nouriel Roubini:
http://angrybear.blogspot.com/2008/09/roubini-and-bail-in-this-weekend.html
“Market Fool Says:
Just noticed the latest front page quote:
“IBC will put your blog into conservatorship”
I am LMAO!”
–I must proudly accept credit for that headline. Def one of my finer moments.
Listen up all you blogs, newspapers, and TV editors… if you could run the BofA/MER deal headline in a much larger font, we’d really appreciate it. Maybe boldface that shit too. And by “really appreciate it” we mean “open up novel loan facilities”. Thanks in advance.
Great creative mind Danny. Evil but creative 🙂
Now that Roubini has been so accurate (I admit I’ve hated his perma-bearity for eons) I actually registered to read his writings.
Did I really just read the part where he is predicting ALL I-Banks will go the way of the dodo?
Yes, including the coveted Goldmans Slacks.
Where is my building jumper guy?
edit: check resusancy above^^
Okay everybody! FIND A PARTNER! We’re about to start dancin’.
I only know the macarena
Prediction for tomorrow: Oil, Gas, Refiners LOWER, Market as a whole will be higher, LEH will obviously be lower. Either way Energy will be taking it on the chin tomorrow.
Top Pick: Short MRO, Long SKF
futures down 38 on the S&P