Lehman CDS priced

Cabrone · Posted: Fri Oct 10, 2008 5:40 am Post subject: Day Of Reckoning

Could this be the day the system goes supernova?

Armageddon · Posted: Fri Oct 10, 2008 7:10 am Post subject: Re: Day Of Reckoning

The PPT will pump in everything they have today.

jasonraymondson · Posted: Fri Oct 10, 2008 7:21 am Post subject: Re: Day Of Reckoning

I actually think stocks will go up today. I think we will end this week on a positive note, if not, then it will be a very bad note and possibly a 10% drop

Bas · Posted: Fri Oct 10, 2008 7:28 am Post subject: Re: Day Of Reckoning

dow futures are about 4% lower at 8250...we'll see in five minutes what that means....

Bloomberg futures
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Cid_Yama · Posted: Fri Oct 10, 2008 8:42 am Post subject: Lehman CDS priced

9.75 cents on the dollar. per CNBC this is initial price, final price could be lower.
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Tyler_JC · Posted: Fri Oct 10, 2008 8:45 am Post subject: Re: Lehman CDS priced

Source?

Analysis?

Anything?

This is a discussion forum, not a facebook wall.
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hope_full · Heavy Crude Joined: May 27, 2008 Posts: 256

This was on CNBC's SQUAWK BOX with Mark Haines this morning (about 10:45 am). I heard it as well. After his female co-host talked about this Mark said, "And I suppose this is good news?"

Mark Haines is THE man.

RdSnt · Posted: Fri Oct 10, 2008 9:13 am Post subject: Re: Lehman CDS priced

Turning $400 billion into something under $4 billion is never a good thing.
Check this out:
http://seekingalpha.com/article/99286-settlement-auction-for-lehman-cds-surprises-ahead

The big event though is that this is the first opportunity for a large group of cds's to be "marked to market". What follows then is we have a better idea of what all CDS's are worth. As I've mentioned before, in the current market all CDS's essentially are worthless.

Now we get to see the scramble, and lawsuits, as everyone attempts to avoid paying the defaults that the CDS's have just failed to cover.
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Cid_Yama · Posted: Fri Oct 10, 2008 9:17 am Post subject: Re: Lehman CDS priced

Agreed. This is the thing they were all trying to avoid; a market price on these things.

Silver Lining: They got priced before Treasury was able to pay .50 on the dollar with taxpayer money.
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In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell

It riles them to believe that you perceive the webs they weave. - Moody Blues

Niagara · Posted: Fri Oct 10, 2008 9:21 am Post subject: Re: Lehman CDS priced

seahorse2 · Expert Joined: Oct 18, 2004 Posts: 1956

What price was expected on the auction?

gnm · Posted: Fri Oct 10, 2008 10:06 am Post subject: Re: Lehman CDS priced

So potentially trillions in financial assets could decline 90%?

Well no sweat then.... And here we were all worried...
Very Happy

-G
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RdSnt · Posted: Fri Oct 10, 2008 10:28 am Post subject: Re: Lehman CDS priced

Not "could", "are".
It's actually much worse than that, if you can believe it. Because the derivatives have been packaged in extremely complex tranches it is impossible to unravel the liabilities. No one actually knows who is "supposed to" pay.
Yet, the expected revenues from them have been borrowed against and heavily leveraged to buy other assets.
Because the tranches are so huge (~$700 trillion) and complex there is no possibility of unravelling them, simply because we don't have the staff or the time to do it.

So in practical terms the tranches are worthless. This is why there has been so much effort put into propping up what is essentaily a dead system. How do you write off assets that are nominally worth 10 times the global gdp?

gnm · Posted: Fri Oct 10, 2008 10:39 am Post subject: Re: Lehman CDS priced

RdSnt · Posted: Fri Oct 10, 2008 10:48 am Post subject: Re: Lehman CDS priced

HAHA

sorry no, that won't work. Actually it wouldn't change anything but add zeros to the figures. You have to inflate the fiat currencies without inflating the obligations.