There is an old adage that the currency you bank by keeping your vessel tidy and ship-shape can be withdrawn again in times of need, drawn off against the foibles of inclement weather. Leave that line tangled on the bow and the next time you have to go up there with the deck pitching in high seas, you are fighting an octopus tentacle.
So I’m not particularly sympathetic to the premise that the likes of Lehman Brothers should be insulated from widespread panic because their ship is so poorly kept that loose lines are tugging at the ankles of the crew.
Lehman’s pattern of denial, delay, and deflect sunk them. In conference call after conference call they assured the market that they were properly capitalized. (What it means to be properly capitalized when you have double-digit leverage ratios, I’m not sure, and this, in itself, is somewhat deceptive). I would shed few tears for a Lehman which could not have withstood rumors (based in fact or not) because they had cut corners on disclosure going back three quarters and got caught on the foredeck in weather when Einhorn asked some pointed (but honest) questions about their earnings and accounting.
Rumors only sink a stock that hasn’t the credibility left to resist them. When that can be traced back to a long-standing pattern of less-than-full disclosure by management, my care-o-meter stops registering.
If we really are entering a zone where “we are sufficiently capitalized” is a lie we tolerate and “their level 3 assets haven’t been written down sufficiently yet” is a crime, well, it’s time to punt.
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What the hell does it even matter anymore? With this freaking ridiculous systemic bailout, these guys can continue acting like fucking pinheads because they now know that Uncle Sam will be there to pay their dinner checks at the end of the night.
What a fucking crock.
I heard they are changing the name of The Fed to Bad Bank.
John Thain wishes he didn’t flash those baby dady eyes towards Ken Lewis now.
Full Stop.
#1…yup
Eff Lehman. They were poorly run; took too much risk and were market followers all the way.
-CantFitz
I suppose we just wait for Washington to come up with some bill banning all speculation that isn’t in the “public interest.” I.E. overleveraged long real estate is ok until you can’t pay, short energy is ok, long energy isn’t, short dot com stocks is ok, short financials isn’t. I don’t know which way they’ll come down on foodstuff commodities though. Short grain speculators used to be blamed for busting family farmers, now long grain speculators are villainous food horders.
Is it true that Pricewaterhouse Coopers in London said that the Lehman London office didn’t have enough cash to pay the unpaid salaries to its workers?
Granted this bit of news comes from that paragon of investigative journalism, Daily Mail, but perhaps someone can either confirm or disprove it.
Talk like a pirate day is my favorite holiday.
I just read that the SEC has banned all us from ever speaking out against them again. Ever.
The Fed has now joined forces with them to set up a special “temporary” Term Auction Gulag where all us haters will temporarily be “vacationing” until our all “destabilizing” information is wiped completely from our minds.
It’s also just been announced that Dealbreaker.com will be forced to pay $2 billion into our new Bailout Fund because they were “mean” and made Ben and Hank “feel bad”. Also because they’ve used the word “fuck” repeatedly, and “fuck” has now been banned in relation to any and all discussions of the financial markets.
I just read that the SEC has banned all of us from ever speaking out against them again. Ever.
The Fed has now joined forces with them to set up a special “temporary” Term Auction Gulag where all us haters will temporarily be “vacationing” until our all “destabilizing” information is wiped completely from our minds.
It’s also just been announced that Dealbreaker.com will be forced to pay $2 billion into our new Bailout Fund because they were “mean” and made Ben and Hank “feel bad”. Also because they’ve used the word “fuck” repeatedly, and “fuck” has now been banned in relation to any and all discussions of the financial markets.
I just read that the SEC has banned all of us from ever speaking out against them again. Ever.
The Fed has now joined forces with them to set up a special “temporary” Term Auction Gulag where all us haters will temporarily be “vacationing” until all “destabilizing” information is wiped completely from our minds.
It’s also just been announced that Dealbreaker.com will be forced to pay $2 billion into our new Bailout Fund because they were “mean” and made Ben and Hank “feel bad”. Also because they’ve used the word “fuck” repeatedly, and “fuck” has now been banned in relation to any and all discussions of the financial markets.
@7:
i heard all cash was wired from Leh London to Leh NY on Friday night…
But they’re now saying the staff will be paid.
TLRD
EP, gotta say that I normally love your writing but you beat that nautical metaphor theme to death in this posting and then you finished off with a football metaphor? Mixing metaphrs = bad idea.
Instead of “time to punt” why not go with “batten down the hatches”? Or “any port in a storm” take your pick of dead metaphors but “time to punt” was pretty bad. Very disappointed in you.
The whole premise of a mortgages-trust bailout program is making people of sound mind and character puke. Totally agree with EP…get the h-ll out of the market if this is the way it is going to be run. We might as well be in Pakistan as another post inferred.
A bailout such as this is the LAST thing that the investing public needs…but the very thing that GOLDMAN and MS desperately want…right now.
If it wasn’t clear before…it is now…Paulson has the best interests of his former partners at GS at heart…maybe this is what the Administration wants, too? If so, I’m voting for O’bama this fall.
The vast majority of the population is not invested in commercial or subprime real estate, directly, or indirectly. Let the markets work and they will.
AIG was embarrasing enough – can’t bear to have Citi lose a nickel on a financial guaranty insurance policy can we? Disgusting.
Does Barclehs know what it’s getting into? Why are they buying the selfsame employees – yes – employees – who got Lemon into this mess. Sure, there was a culture of fear, and no one could challenge or even question management’s decisions; but are the kind of employees who make their living in that kind of environment worth $1.5 billion+? I think that it makes a lot of sense that McDade (a lifelong Lehmanite) was not put in charge of the new ship; but how to keep the new thing afloat? Not totally clear. And you can bet there is a lot of ill will following the rump Lemon around Wall Street these days, from the entirety of its London and Asia staff, to hedge funds that cleared through their prime brokerage department. Karma is not great right now.