-Per usual, I'm late. Erin is being introduced. She sounds slightly intimidating, like if this thing were being held in an auditorium and I was walking in late while she was speaking I'd be scared. On the subway this morning, I saw a guy who looked like a cross between the Austrian crazy who had his daughter locked in a basement for like 24 years and Nick Nolte. I think I'm going to start living beyond my means and taking cabs every day. That or I'll afford it through a cost cutting initiative wherein I stop paying into my 401k, since I think (know) I actually lost money on that p.o.s. this year.

- Apparently the Q&A will be "more limited than usual." Dick Fuld will not be answering questions about his relationship with Angelina Jolie. So don't even ask.

-Erin C: "Want to caveat: the info I'm talking about is preliminary; still subject to refinement and change"

- Estimated netloss: $2.8 billion

- Book value slightly over $34/share

- It sort of just sounds like she's reading off the press release but I haven't read it so maybe not. Carnoi?

- Finally, the pink pot smoking elephant in the room is mentioned: BSC. I wonder if J. Cay is listening in on the call.

- Archstone

- The failure of Lehman's hedge funds was an "abberation."

- LEH employs a hedging strategy of "confidence." When I open my hedge fund, Human Capital (or Ransom Capital, where we raise money by kidnapping/blackmailing hf managers), I might use this.

- Compensation expenses totaled $2.3 billion, "including severance." Awkward.

- 1900 people, mostly in the US, have been given the summer off.

- No specifics on Level 3 assets. The call was earlier than expected, so we'll issue a pass. This time.

- This little capital raise, which you may have heard something about, is not because we are in trouble, it is to take advantage of future opportunities. It will be used to mitigate losses but it's really about moving forward. Moving forward, think about referring to me as Erin Callan, CEO.

- We are awash with liquidity. We are swimming in liquidity. My lungs are filling with liquidity.

- The "fall-out events of mid-March." Burn (it's funny on multiple levels).

- We will be delivering "intellectual capital" to our clients. Same utility, re: buying shit with it, as Monopoly money, but much smarter.

Questions:

- Bill Tanoma from Goldman:
"Safe to assume level three assets will be down?"
"No Bill, it's not safe to assume."
The tone of voice she just took with him was the equivalent of rolling up a newspaper and hitting him on the nose with it. I feel good about this.

- Second question: Guy Moszkowski. "Is it fair to assume of $130 billion in asset reduction, about $25 billion is in mortgage inventory?" Erin says $20 billion.

- Leverage finance assets will be an even bigger percentage but firm numbers not available till Monday.

- The vast majority of what was sold was in the form of whole loans, not securitized products which have better pricing visibility. Largely subprime and non-performing loans.

- 3rd question, missed the guy's name but he sounds nice, if timid. Erin says: "Losses for the quarter are truly write-downs rather than reflecting actual sales at less than balance sheet estimates." Guy (not Guy M., just "guy") just apologized for "asking so many questions."

- Erin wants to "end the chatter about Lehman Brothers." And "go fuck yourself, David Einhorn." Sorry, tickle in my throat.

- Someone asks "How do we know you've taken enough writedowns in your mortgage books?" Erin: "For two reasons. 1. The aggregate number is very large. That gives me confidence. 2. We sold lots of risk assets. Our price visibility was "tremendous." Know what that gives me? Starts with a 'c' ends with a 'onfidence'."

- Tells David Trone: We've put comparisons to Bear Stearns, regarding liquidity, whether or not we'll be here in a month, and my supposed bridge addiction, to bed."

- Someone at LEH has his volume turned way up because we all just heard him receive an IM. Who was it from???
(BigDaddyCaCayne: i'm sitting in my boxers right now eating five McGriddles.

DFuld8473: not now, jim

BigDaddyCaCayne: leave it to the chick, dude. That's how I rolled.

BigDaddyCaCayne: how long do you think it'll take the gnomes who live inside the computer to advance the internet so that you can pull someone's figure out there in cyber space?)

- E to the C says there is much more opportunity in fixed income trading than there has been in "some time." Equity trading has "demonstrated a great ability to make money."

- E to the C, who's apparently got a part-time gig as The Architect in The Matrix, ends call by saying: "We're looking forward to this next step in this paradigm." Should've gone with a. "We're looking forward to unwrapping the mystery within the maze within the enigma that is Lehman" or b. "We're looking forward to discovering the next land mine up in this bitch."