[Daniel_Plainview]

link

Lehman outlook dims on failed sale reportThu, 21 Aug 2008:
LONDON (Reuters) - The outlook for Lehman Brothers Holdings Inc darkened further on Thursday as a newspaper reported that an intended asset sale had collapsed and a Citigroup analyst forecast big losses for the group.

The fourth-largest U.S. investment bank has taken a $7 billion hit from credit-related writedowns and losses since the start of the global crisis and is forecast to write down more.

Lehman is concerned its capital cushion is not enough to absorb losses, and people close to the matter said this week it is considering selling at least a part of its asset management business.

The Financial Times said Lehman's talks with China's biggest brokerage, CITIC Securities and state-owned Korea Development Bank (KDB) on a sale of up to half its shares had failed, fuelling speculation about the U.S. bank's efforts to raise more capital.
(continued)

[nobodypanic]

i really hate to be a financial ghoul, but will somebody please put a damn stake in their heart and end it already.

[wisconsin_cur]

NYT: Options Narrow

But Lehman has remained in the center of the storm because of its smaller size, its significant mortgage exposure — about $61 billion in mortgages and asset-backed securities — and its seeming reluctance to take drastic steps. Citigroup sold off its large German consumer banking franchise, while Merrill Lynch recently bit the bullet and sold a $31 billion portfolio of mortgage-related collateralized debt obligations for 22 cents on the dollar, as well as its stake in Bloomberg L.P.

Lehman declined to comment on its plans.

After a dismal quarter, analysts have slashed their third-quarter estimates for Lehman. Where they had predicted a small profit, they now expect a write-down of up to $4 billion and a loss for the quarter of $3.30 a share.

On Thursday, Mr. Bove upgraded Lehman to a buy, but it will not be a comfort to Lehman employees. He says the company is ripe for a hostile takeover because of the disconnect between what investors think the company is worth and what management thinks it’s worth — a lot more.

“Investors are unwilling to accept any positive view of the company; management is unwilling to sell out at a deeply distressed value,” Mr. Bove wrote. “The stage is set for a hostile bid to take over the whole company.”

[Iaato]

Yeah, I'm here, Rocc. I've been out floating my boat. Back now to watch the continued death throes of LEH. At least silver is cheap right now.

"Ok - any of the following 5:
LEH
Wachovia
WaMu
Citi
USB

bailout chatter with rebound you [Iaato] win, anything else i [Rocc] win. k?"

[Iaato]

"Breaking News: Lehman To Be Acquired by Tooth Fairy

The market responded with enthusiasm to reports that the Tooth Fairy has agreed to acquire Lehman. The purchase price has not yet been determined and will be set by Dick Fuld wishing upon a star, clicking his heels three times, and being ransported back to that magical place where Lehman still sells for over $70 per share.

In related news, Lehman has agreed to sell all of its level III capital, including CDOs, ABSs, pet rocks, baseball cards, slightly used condoms, and credit default swaps written by MBIA and Ambac. Lehman’s level III capital will be acquired for 150% of its face value by Tinkerbell, who will carry it off to Neverland to be fed to a crocodile. Lehman is financing 90% of the acquisition at an interest rate that has not been announced; Tinkerbell’s up-front payment consists of a handful of pixie dust, three crickets, and a bullfrog. Analyst Dick Bove estimates that the bullfrog could eventually be transformed into three princes and a pumpkin coach. The deal gives Lehman no recourse to any of Tinkerbell’s assets other than the Level III capital. If Tinkerbell defaults, Lehman’s successor entity will stick its hand down the crocodile’s throat and attempt to get it to regurgitate. The firm’s historical value-at-risk analysis shows that sticking your hand down a crocodile’s throat is completely safe.

Treasury Secretary Hank Paulson issued a statement: “I am delighted that SWFs (Sovereign Wealth Fairies) continue to express confidence in the terrific values represented by American financial institutions. As I have been saying since August of 2007, this shows that the crisis is now over.”

Meanwhile, the SEC has announced an investigation of mean, evil, bad short-seller David Einhorn. While out for a beer with a friend, Einhorn reportedly suggested that the Tooth Fairy does not exist and that wishing upon a star is not a wholly reliable price discovery mechanism. Christopher Cox, chairman of the SEC, said, “Vicious rumors attacking the Tooth Fairy will not be tolerated. Our entire financial system and indeed the American way of life depend on the Tooth Fairy and wishing upon a star. How else could one value level III capital appropriately?” The SEC is reportedly planning to set up re-education camps for short-sellers."

Immobilienblasen-check out the picture of the tooth fairy

[Spanktron9]

LEH in freefall today. Down $4 to $10.15 the first 2 hours of trading.

[firestarter]

Stock down 40%. BK rumors flying.

[smallpoxgirl]

Wow!

Opened at $17.62 yesterday. Got down as low as $8 so far today.

[Spanktron9]

See the LEH deathwatch thread.

[Spanktron9]

Down $5.50 for the day....

[ReverseEngineer]

The Financial Storm is Officially a Hurricane, on its way to Cat 5 in a mighty big hurry. Lehman is going DOWN.

NEW YORK (Reuters) - Lehman Brothers Holdings Inc (LEH.N: Quote, Profile, Research, Stock Buzz) shares sank as much as 46 percent on Tuesday on growing concern the fourth-largest Wall Street investment bank won't be able to raise the capital it desperately needs to survive the global credit crisis.

In a sign of the severity of its predicament Lehman brought forward the release of "key strategic initiatives" and quarterly results by a week to 0730 New York time (1130 GMT) on Wednesday. Major Wall Street banks, including Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz), issued statements saying they were still trading with the firm.

Facing what may be billions of dollars in additional write-downs, the bank has examined options from selling a stake to a Korean bank to spinning off its investment management unit, but they have yet to bear fruit.

"This has been going on for a while now, and people are worried about liquidity, survival," said Rose Grant, a portfolio manager at Eastern Investment Advisors in Boston, which invests $1.8 billion and has never owned Lehman shares.

The firm's woes raised the possibility of a Washington-sponsored rescue just a few days after a U.S. takeover of mortgage companies Fannie Mae and Freddie Mac and months after the Bear Stearns meltdown, which resulted in a fire sale brokered by the government. U.S. officials declined to comment.

I love the part about the other major Investment Banks still trading with Lehman. What are they trading? Baseball Cards? They have NOTHING anyone wants to BUY.

The stock is in the toilet and they are supposedly going to sell to South Korea. South Koreas banking system is of course in even worse shape than our is, and they are halfway down the road to Argentina-ville already.

Anyhow, the chances they can raise enough capital through sale of assets to stay floating is slim and none, and of course they are also "too big too fail". ANOTHER Government Bailout?

Its becoming a Clown Act, and rapidly. The spin down is out of control now, put on your seatbelts and hold on tight. Am I too early calling for hitting TSHTF Button?
Reverse Engineer

[TreebeardsUncle]

The deal with SK fell through.

Looks like another one will bite the dust.

Perhaps its reanimated corpse will be strung up like a marrionette by the feds and paraded around to keep up appearances.

[jbrovont]

By trading, do they mean just swapping different securities between them? I know I read something about this practice - more like bartering with junk based on bad mortgages.

[Cashmere]

Strategic Initiatives.

[Heineken]

If necessary, won't the government "step in" and prop it up? That's what it did with those other ones that were on the edge.

Nobody goes bankrupt anymore except the little guys. Your friendly US taxpayer is enlisted to save all the big, fat, bald guys.

[Ludi]

Your friendly US taxpayer is enlisted to save all the big, fat, bald guys.

Funny how it's evil "socialism" when it's to help the average Joe, but somehow it isn't when it's to help big fat rich guys.

[Roccland]

"The Braintrust, our own Dr. Lalani called me today and said if Lehman Brothers goes any lower, they are going to have to change their name to Lehman Brother, the other Brother will need to be let go...Lehman does not survive this, and if they are smart, they will realize that there is room for ONE MORE Bear Stearns-like forced merger. The next institution (or 2, or even 3) will just have to fail.
GM & Ford, Fannie & Freddie, Bear & Lehman, American & United Airlines, wanna know who is next? What about Fedex and UPS?"

linkThe bet's still on, Rocc?

Yep - the bet is still on.
I gave ya'll 3 months to short this bitch...hope ya made some jack.

[Heineken]

Yeah, that says it all, Ludi.

The bigwigs running these bankrupt companies even get to keep their bloated compensation packages.

Socialism for the rich. That's what we have.

And the poor average dummies out there with the flag stickers on their cars play right along.

[Spanktron9]

Yeah, that says it all, Ludi. The bigwigs running these bankrupt companies even get to keep their bloated compensation packages.
Socialism for the rich. That's what we have. And the poor average dummies out there with the flag stickers on their cars play right along.

+1

[seahorse]

Yes, whatever happened to the argument that the US can't afford a national health care, cannot afford Social Security and the like, but miracuously, we can somehow afford these "offbudget" wars and now Freddie and Fannie? In case you all haven't seen it yet, I posted an article from Financial Times reporting the US CBO (Congressional Budget Office, non partisan) says that Freddie and Fannie should now be carried on the US budget. Tell me that won't be a budget buster!