- I am here before the call has begun. This is a miracle. Not washing the shampoo out of my hair saved a significant 30 seconds.

- "This information is...inherently subject to uncertainties...difficult to predict...beyond our control...for more information about what could happen, see Bear Stearns"

- Dick Fuld in the house.

- Fuld: "I am very disappointed with these results. Losing $2.8 billion is unacceptable. This is my responsibility." At this time, you might be wondering why, then, didn't I punish myself by firing myself, instead of those two people underneath me? I still need time to ruminate on that one.

- "In hindsight, we made some poor choices."
BigDaddyCaCayne: that's what i'm talkin' about!
DFuld8473: Not now Jim
BigDaddyCaCayne: just sayin' i feel you brother...my legs, not so much.

- Management Changes: "Joe Gregory stepped down. Joe's been my partner forever. It was one of the most difficult decisions that he and I had to make together." More so for him than me, but it all evens out in the end. "You might've also seen that Erin Callan stepped down from her role. I respect her. We're still talking."

- "2007 was a record year!" He should just read those results.

- "Our strategy of diversifying is working"

- "We've got good opportunities-- The key is to execute!. We have to got to be closers! We've got to close that shit!"

- Turns it over to Ian

- Who's not speaking into the mic

- Cause I'm hearing nothing

- Hah, his "microphone was off" [laughter]

- Ian is South African! Dick Fuld is a genius. No one pays attention to what's actually being said when there's a cute accent talking.

- "Our hedges, which used to kick ass, didn't do so well this time around"

- Headcount declined by 1900 + 2

- The "dominant theme" in this quarter was "capital raising." Eroded investor confidence. Diluted shareholder value. Etc, etc etc.

- LEH is still focused on serving clients, and they have an internal yardstick for making sure everything's up to snuff.

- While Ian reads off the press release, let's talk about this awesome new feature on the MIKE'S HARD LEMONADE site.

Summer/Fall/Winter 07/08

Dear Mr. Schwartz,

Because of what happened, I'm not going to make it in to work. You might think I'm just enjoying a summer day off in my backyard BBQing, but I'm really not.

I'm not sure if you saw my story on the local news so I've enclose the clip below.

Jim

- Gross leverage decreased from 31.7x to 24.3x

- Writedowns from commercial and residential mortgages decreased from first to second quarter, that's good.

- Carney: Lowitt stressing that recent asset sales and purchases have given them good transparency in pricing. This is meant to reassure the market that their valuations are not just based on models and estimates but rooted in actual market activity.

- SunCal. Got some significant exposure in SoCal (23 separate residential land development projects and one luxury high rise residential development). Anyone wanna be a homeowner? Talk to me after the call.

- Underlying fundamentals of Archstone's apartments are "improving."

- You might be interested to hear that all monolines defaulted, LEH would lose only lose $265 million

- This means nothing and is sort of as constructive as discussing Erin Callan's clothes, but Bart's non-accent sucks compared to Ian's.

- Describes layoffs: "Resizing of our human capital." If things don't work at LEH, I think he's got a future in the Sudan.

Questions

- Meredith Whitney: what are you going to do to ensure a mid-teens ROE?
Ian: To get to that ROE we need to earn $5 billion per quarter in revenues, which is more than what we have now. So...we need a turnaround in businesses such as fixed income.

-Mer: Can you give me a timetable?
Ian: No.

The screaming on MW's end is:
a. a baby
b. her husband, who's training to break back into pro-wrestling (turns out the berry-flavored liquid viagra business is not going as well as one had hoped)
c. Vikram Pandit
d. your call

- Glenn Sshorr, UBS: Just making sure I heard you correctly- you're still interested in bringing down the size of the commercial books?
Ian: Yes.
[Dick interjects...Glenn starts posing questions at him...Ian sits there, because what is he supposed to do, say "Fuck you, old man, let me do this!"? (Yes).]

- Fuld tells Glenn that if the Fed is going to give the investment banks access to the borrowing window, they have a right to oversight. But exactly what that means in terms of leverage requirements and the like, it's too early to tell.

- I don't like how Dick keeps answering for Ian. Then again, he hasn't yet insulted Ian's suit, so I guess this is progress?

- Mike Mayo goes there: What are the odds we'll get more write-downs again?
Fuld: Future blah blah blah can't predict it blah blah blah it's my name on the line blah.

- Fuld is starting to lose his patience. I know this because the tone he's taking is the one my father used every other day of my childhood (if we're talking 3rd grade, then every day. It's pretty much a wonder my parents didn't kill me). "When I say I'm comfortable, understand that I am the one who signs the quarterly document."

- Awkward pauses during Mike Mayo's line of questioning: 5

- Some guy is asking whether increased regulation, namely regulation of the sort faced by commercial banks, might "put the kibosh" on Lehman as an independent company.

- Fuld: "If the model changes so that banks are the only way to go that would be considered. But for now, we can very much go it alone."

- Some guy wants to know how in the hell compensation went up $500 million. A: Severance. Firing people is expensive.

- In closing, to all you naysayers, cough, Einhorn, cough: "[Lehman] has a complete fortress around liquidity." And not just some shitty little cardboard box of a fortress. A real fucking fortress, with moats, and drawbridges motherfucking knights.