Dealbreaker - A Wall Street Tabloid - Business News Headlines and Financial Gossip

1

Posted by guest, Sep 18, 2008 8:57PM

nice

2

Posted by guest, Sep 18, 2008 9:00PM

These dunces have really lost it this time. Fist the death star sized SIV to end all SIV's and now this?

Wake me when some windows are broken or tires are slashed.

3

Posted by guest, Sep 18, 2008 9:01PM

Seriously?

4

Posted by guest, Sep 18, 2008 9:02PM

#2...RTC is a fucked idea. And Congress will pass it, maybe.

So are SAC, Citadel, Chanos, etc...going to pay Iran to start a war now to end this?

Is Cramer going to be appointed new SEC Chmn?

5

Posted by guest, Sep 18, 2008 9:02PM

Korea Development Bank had proposed to buy a stake in Lehman Brothers Holdings Inc. for $6.40 a share, valuing its offer at about 6 trillion won ($5.3 billion), Chief Executive Officer Min Euoo Sung said.

Lehman, which filed for bankruptcy this week, wanted to sell its shares at $17.50, Min told lawmakers today in Seoul.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aUCpzDST65xE&refer=home

-$$$

6

Posted by guest, Sep 18, 2008 9:04PM

holy (pause) fucking (pause) moly.

it's over fellas.

we killed the banks.

now we'll kill the hedge funds.

worst move ever.

bess, may as well shut it down tomorrow.

you can write on my yoga blog any time.

-retail

7

Posted by guest, Sep 18, 2008 9:04PM

#5....fuck. On what fucking planet was LEH worth 17.5 when it was circling the drain?

8

Posted by guest, Sep 18, 2008 9:06PM

WSJ is also reporting this:

http://online.wsj.com/article/SB122177442732653979.html

"A Treasury spokeswoman said: "Treasury Secretary Paulson joined Federal Reserve Chairman Bernanke in a meeting with House and Senate Republicans and Democrats to discuss current market conditions. They began a discussion with them on a comprehensive approach to address the illiquid assets on bank balance sheets that are at the underlying source of the current stresses in our financial institutions and financial markets. They are exploring all options, legislative and administrative, and expect to work through the weekend with Congressional leaders to finalize a way forward."

9

Posted by guest, Sep 18, 2008 9:11PM

When is Beard going to start dropping Benjamins out of a chopper...because that is next.
I'm there man.

As Spicoli would say...we're just bogus too man.

10

Posted by guest, Sep 18, 2008 9:12PM

@5 god i hate dick fuld.

11

Posted by guest, Sep 18, 2008 9:12PM

This is fucking insane. This is the end of free market capitalism. Do these fuckers even know what the fuck they'r doing?

12

Posted by guest, Sep 18, 2008 9:14PM

We have officially become Pakistan.

13

Posted by guest, Sep 18, 2008 9:21PM

Even better, bloomberg reported that Cocks and crew are meeting tonight to come up with EVEN MORE plans to boost the market. As if banning all shorts and transferring all toxic waste loans to the taxpayers was not enough.

14

Posted by guest, Sep 18, 2008 9:25PM

Stay on top of these ass clowns, BL. Apparently none of them have gotten the memo. John Mack went full retard today.

15

Posted by Lowly Assistant, Sep 18, 2008 9:26PM

I'm sure CCox will find lil' LB's Mike Seaver-esque garage comfortable and spacious. And I'm pretty sure this shit is on repeat, bangin' the BOSE.
http://www.youtube.com/watch?v=OEsTy6NdYqA

16

Posted by guest, Sep 18, 2008 9:27PM

9/18/08 the day Mack lost it.

Fuld = Turd

Long live free capitalism!

17

Posted by guest, Sep 18, 2008 9:28PM

RFC won't work here. Government doesn't own the assets; they need to buy them up.

Who wants to admit what that slime is actually worth? I can't see more than .30/$1 being paid for any of the shit.

18

Posted by guest, Sep 18, 2008 9:31PM

The biggest scam of all time is these A-hole bankers, echoed nonstop by Paulson and Bernanke, claiming it's a liquidity problem. Call a turd a turd.

19

Posted by guest, Sep 18, 2008 9:32PM

@12 Exactly my thoughts, freeze the prices where they are hahahah

@14 You're NEVER supposed to go Full Retard

20

Posted by KevinB, Sep 18, 2008 9:32PM

@9 - So all this volatility we're seeing is just "some tasty waves"? Where's my cool buzz and pizza, dammit!

21

Posted by Lowly Assistant, Sep 18, 2008 9:33PM

Pardone. More appropriate for Christopher's sabbatical.

http://www.youtube.com/watch?v=Li-85uaLhZg&feature=related

22

Posted by guest, Sep 18, 2008 9:35PM

Fire this bitch. She writes the most incomprehensible posts, even by blogging / tabloid standards.

23

Posted by guest, Sep 18, 2008 9:37PM

Bess, normally I think you guys do a fantastic job but this wasn't one. Even if SEC were to ban short selling, it in fact does not mean, as you claimed - Stocks can only go up. The stock price in a long only strategy is still guided by the fundamental supply and demand at a particular price. Short selling is nothing more than selling a share that you don't own hoping/praying) that prices will go down, at which point you can buy the share at the lower price to cover your short and make a profit. Even with shorts banned, you can achieve this functionality in the market by buying Put Options at the present stock price strike if you think the stock's overvalued (so if price falls you pocket the same profit by having the right to sell at the higher strike price minus the option premium). However buying a Put won't artificially increase the market supply of a stock therefore drive prices down. In a market under the grasp of panic, what's the problem with that? Now, I don't think you actually not understand this (or do you not?), but putting up a post like this only generates hype and distorts the real picture in a market already taken over by rumors.

24

Posted by guest, Sep 18, 2008 9:37PM

@5 the "good bank/bad bank" thing was why that never happened. I still have never figured out why I ever even heard the phrase.

So they pay $6.40 and get the good bank. Who pays for the bad bank?

Dick Fuld effd up but way before this month.

25

Posted by guest, Sep 18, 2008 9:39PM

I don't get it. If they ban short selling, how the fuck do the risk arb boys do their job?

Fuck??? This is so fucking stupid?

26

Posted by guest, Sep 18, 2008 9:40PM

@ 22 and 23: Kill yourselves.

27

Posted by guest, Sep 18, 2008 9:40PM

This has to be the most fucked up day ever for free markets.

I am a Lehman employee (a low level one at that, and soon to be unemployed) who just yesterday arguing with my colleagues that letting Lehman go bankrupt was the correct decision as the debt and equity holders who had mispriced risk needed to pay for their errors.

However, looks like Lehman turned out to be the only fool in this whole game. And I am sure that the Merrill shareholders are not feeling too good either, but at least they are better off. Had Lehman built up a balance sheet north of a trillion dollars and shoved 15% of its assets into level 3, I am guessing they would have been deemed "too big and risky to fail" and bailed out using taxpayer money.

The feds here and in UK - the only places where some semblance of free markets at least existed till now - have given in and decided that they dont want the market. Banning short selling and the government buying out assets? What the fuck do they want? Why dont they just take over the entire market and set prices for everthing, like no bank stock can fall below $50!!

This is so so so fucked up. The good part is that I will at least be in some position to actually influence something as and when the next financial crisis rolls in. I will make certain that I have totally loaded up on risk by then. Cox where is the fuckng downside??

28

Posted by guest, Sep 18, 2008 9:41PM

From Chuck Schumer (D-Wall Street):

"Schumer urged forming an agency to inject funds into financial companies in exchange for equity stakes and pledges to rewrite mortgages and make them more affordable. His remarks indicate momentum is building for some wider plan after the Fed and Treasury's takeovers of Fannie Mae, Freddie Mac and American International Group Inc. this month.

Schumer advocated a Great Depression-era Reconstruction Finance Corp. model, different from the Resolution Trust Corp.- type plan others have floated. Another RTC, which was a 1990s agency that sold devalued assets in the Savings and Loan Crisis, would "simply transfer excessive risk to the U.S. government without addressing the plight of homeowners,'' he said."

Great plan, comrade.

29

Posted by guest, Sep 18, 2008 9:41PM

@23, get a fucking life and a sarcasm meter.

Any coincidence Quadruple Witching day is tomorrow??

30

Posted by guest, Sep 18, 2008 9:42PM

@22-- a few hundred thousand people would disagree with you. and reveal yourself as a douche with an axe to grind by calling her a "bitch."

31

Posted by guest, Sep 18, 2008 9:43PM

BL: I am conjuring up much more gruesome fantasies for those POS than just a grenade.

32

Posted by guest, Sep 18, 2008 9:44PM

@23

Right..... and how do you solve the risk arb problem?

33

Posted by guest, Sep 18, 2008 9:45PM

What would this mean for the ProShares UltraShort ETFs. Would they be banned as well?

This is so dumb.

34

Posted by guest, Sep 18, 2008 9:49PM

BL: I am conjuring up much more gruesome fantasies for those POS than just a grenade.

35

Posted by guest, Sep 18, 2008 9:50PM

@6 So right.

I heard this 25 year old kid today talk on his cell phone about he was so happy about the schumer announcement and he just bought everything financial when he saw.

The thing is, everyday millions of these shares are being "traded" but the question no one is asking is who is buying/trading all these shares. It isn't just about the ABS problem at this point. The gig is up.

Take an umbrella to work tomorrow.

36

Posted by guest, Sep 18, 2008 9:51PM

#23,

If you can't get facetiousness, don't read DB.

37

Posted by guest, Sep 18, 2008 9:52PM

How the fuck would an option market maker hedge his PUT writes? How the fuck would a convertible arb shop carry on?

This is so fucking stupid!!! The options market can't function without short selling.

38

Posted by guest, Sep 18, 2008 9:52PM

33: From what I can tell those ETFs hold index swaps, so I don't think they actually short individual stocks. However this artificially created bull market is going to swamp the ultrashorts.

39

Posted by pdtrading, Sep 18, 2008 9:52PM

OK, seriously, who's the ding dong who proffered the response that stocks, in fact, will not always go up.

For the love of God, can't we at least have sarcasm anymore?

I mean, at least until that's banned as well.

P.S. I am now drinking heavily. Someone please wake me up when it's 2012.

40

Posted by guest, Sep 18, 2008 9:53PM

This is so fucked up. I guess the line in the sand only applies to Lehman and everyone else gets bailed out by these ass backwards shorting rules.

Dick Fuld = Total Dbag

41

Posted by pdtrading, Sep 18, 2008 9:53PM

OK, seriously, who's the ding dong who proffered the response that stocks, in fact, will not always go up?

For the love of God, can't we at least have sarcasm anymore?

I mean, at least until the SEC classifies it as "rumor mongering" and "being really, really mean" and bans it from all market-related blogs.

P.S. I am now drinking heavily. Someone please wake me up when it's 2012.

42

Posted by guest, Sep 18, 2008 9:57PM

The real criminals that should be hunted down are the bank CEOs who made announcements that everything was OK and then raised billions in capital the next day.

43

Posted by guest, Sep 18, 2008 9:57PM

i dont get how anyone will ever be able to buy an option under this scenario... and without options which are sometimes used for risk management (what is that again?) just going to lead to good old fashion selling?

44

Posted by guest, Sep 18, 2008 10:00PM

Anyone else have thoughts on Ultrashort Proshares ETFs? Are OTC derivatives the only game in town now?

45

Posted by Finnegan, Sep 18, 2008 10:00PM

@22: Bess is an excellent writer, with good use of humor.

46

Posted by guest, Sep 18, 2008 10:00PM

Ok with this move, the republictards (go obama!) have effectively shifted the killing of banks to the killing of arbitrage hedge funds and options houses. brilliant. go america.

47

Posted by guest, Sep 18, 2008 10:01PM

Viva la revolucion! Viva Fidel y Che! This is a ridiculous communist joke... both the short-selling and the government plan. So Schumer is saying that the government is going to get equity in basically every financial institution? Am I hearing this right? If I don't have the freedom to sell short and bet whichever side I choose, I don't think I want to participate in the market period. How much fun would roulette be if you could only bet on black. Hmm.... I wonder if these ideas are meant to stabilize the markets in the short-term so a certain guy who doesn't understand a darn thing about the economy has a chance to win.

48

Posted by guest, Sep 18, 2008 10:03PM

If hedgies are forced to cover, this could conceivably lead to some blowups, putting even more pressure on the i banks that finance them.

49

Posted by guest, Sep 18, 2008 10:03PM

@41 you might wake up in a pool of sweat and shit, after a nightmare about Option ARM resets

50

Posted by guest, Sep 18, 2008 10:03PM

Banning short selling will have the effect of a massive short covering rally caused by a dry up in volumes by mid next week.

Professional option traders will stop trading as they cannot properly hedge their postions, as will all risk arb trading, debenture trading, pref trading, quant. trading , derivative trading, ETF trading (ETF's are supported by an underlying basket of stocks that are actually balanced daily) Traders of all financial products will not trade if they cannot hedge their positions.

So at a time when all financial insituitons are desperately looking for revenue, trading revenue (direct and indirect) will start to dry up.

Also we are just starting to see massive mutual fund redemptions and these actions by the SEC will cause a second wave of hedge fund redemptions. So massive liquidation will become massive liquidation squared.

So for Cox and Company enjoy the week.

The USA has just legatimized the response of Russia and Pakistain to halt the downward spiral of their respective stock markets!!

51

Posted by guest, Sep 18, 2008 10:03PM

#23

How do you think the person that sold you the put hedges their bet? Market makers don't take directional positions.

This is just going to dry up liquidity and increase volatility. Exactly what the SEC does not want.

52

Posted by guest, Sep 18, 2008 10:12PM

The Pakistanis are truly trailblazers. They had the foresight and the audacity to do this before any of the Fed and Treasury officials even had the balls to start talking about it.

We're fucked! Financial armageddon is upon us.

I am waiting to see what plans the HF guys can come up with to circumvent these ridiculous bans of short-selling.

This Giant SIV (a negative-carry one at that) Paulson and Bernanke are thing won't work. There is a tsunami of this toxic waste coming their way. The previous Giant SIV idea died because banks wanted higher valuations for their toxic junk from the Fed and the $80-100billion SIV was only a tiny fraction of the stuff out there.

Also, some bankers complained the original idea was too transparent and would have killed their banks and any "market" that was left for these things if the world found out the kind of crap the banks have on their books.

Funny how no one has mentioned about the $70billion rescue fund anymore.........................is it still in the pipeline or has it died a silent death? Didn't MS have to borrowing most of the $7billion they ponied up?

53

Posted by guest, Sep 18, 2008 10:13PM

i work at a hedge fund that buys subprime and cdo on the cheap... what are we going to invest in if it all just gets sold to the new RTC. there is tons of money looking to buy subprime, alta, etc the problem is the owners arent selling bc "its only a paper loss and we are holding it to maturity" ... i guess the miracle they are hoping for has come true

the market is bidding subprime right now.... what is the govt's price? if the market has been bidding $30 does what price does the new RTC pay... par? who runs the RTC's buying effort... blackrock?

who gets to sell their subprime, etc to the RTC? all banks, all troubled banks?

54

Posted by arthurcutten, Sep 18, 2008 10:17PM

Tonton Macoutes. LOL Is John Carney Baby Doc?

Bess you are too funny.

I think capitalism died this week. Not sure yet about the constitution.

So let's pour some cheap whiskey and listen to some jazz oldies, because we're sliding into the night
http://jessescrossroadscafe.blogspot.com/

55

Posted by guest, Sep 18, 2008 10:18PM

48 - Conceivably? +-

I've been staying neutral this week precisely because of (a) AIG risk and (b) government risk. You can't model politics and I'm pretty sure no one could model AIG - and the 11th hour "salvation" of that FuckedCompany.

You run with the Washington dinosaurs, you'll get trampled and eaten.

I personally don't believe this RFC/RTC/Bad Bank will actually succeed, but that doesn't mean that it and the emergency short rules won't slaughter everyone who was short with no net i.e. idiot day traders, and pop low-rent "hedge" funds like popcorn.

56

Posted by guest, Sep 18, 2008 10:19PM

53: Only banks headed up by ex-Goldman guys will get to use the new RTC.

57

Posted by guest, Sep 18, 2008 10:21PM

DealBreaker needs to merge w/ DealBook to survive. Use MAYO to merge!
ShamWAW!!!

58

Posted by guest, Sep 18, 2008 10:21PM

@50 hit it. bye bye derivatives markets on equities. can't wait to see the fallout.

alcohol, tobacco, and firearms. i'm going long.

59

Posted by diablo, Sep 18, 2008 10:22PM

May as well close the markets tomorrow and reopen after the elections. No more worries about the volatility and the bad publicity of this meltdown. Oh, you mentioned options expirations - so who are the fraudters now?

60

Posted by guest, Sep 18, 2008 10:24PM

Why is Fuld such a pussy? Enron goes tits-up, Skilling and Lay at least stood out in front and proclaimed to the world, "We are the stooges who blew up the Company!" Fuld on the other hand, despite his reputation as a Green Beret Licensed Badass, is a scared little rat hiding in his office. Probably chats with PeeWee Herman, Roman Polanski, and Mitch Williams (Phillies pitcher) each day so they can commiserate on the epic bonehead reputation-destroying idiocy of the last 72 hours of their respective relevance. But Fuld is still the biggest wimp of them all.......

61

Posted by guest, Sep 18, 2008 10:26PM

Let's hope they also ban buying and holding in bull markets too...so the little guy has a chance against the big institutional guys.

62

Posted by guest, Sep 18, 2008 10:27PM

This market scares me. Losing jobs for 6 months in a row, the Dow almost back under 10k and oil at $100.
I am voting John McSame, so he can change the Washington where he has been for 25 yrs. Because even though he has been there for 25 yrs and votes w/ Bush 95% of the time and "doesn't know much abt the economy" I am SURE HE IS THE MAN TO LEAD! He and Sarah Baracuda will make Fannie and Freddie "smaller" & "less expensive to tax payers" and they will "drill baby drill" and everything will be ok! Yay!!!
Nothing I want more than someone who took 6 yrs to get a 4 yr degree leading the country!

63

Posted by guest, Sep 18, 2008 10:28PM

OK go ahead and kill me for asking, but would it be OK to just ban NEKKED short selling? and let shorts who can borrow continue? There was something wrong-seeming about naked shorting.

64

Posted by guest, Sep 18, 2008 10:29PM

Because a veto to an earmark is going to SAVE OUR BUDGET! Where is my veto pen? I need to veto the bridge to nowhere bc that matters sooooo much when Fannie is on our balance sheet!
Drill Baby Drill!

65

Posted by guest, Sep 18, 2008 10:29PM

@63-- DUH. the retardation here is that they're banning ALL shorts.

66

Posted by pdtrading, Sep 18, 2008 10:31PM

49-I'm already awake. And in a pool of sweat and shit. At least by 2012 the Republic of Americastan will have universal (i.e. nonexistent and totally crappy) healthcare.

Viva la Revolucion!

67

Posted by guest, Sep 18, 2008 10:31PM

62: I'll vote for Obama if he has the sack to come out against Bernanke/Paulson on this.

68

Posted by guest, Sep 18, 2008 10:32PM

@22-- that was really uncalled for (not to mention wrong). you can leave now.

69

Posted by guest, Sep 18, 2008 10:33PM

@65 I guess I didn't think they could be that ridiculous. That idea is even stupider than my question! Why go to such an extreme? I just don't get it...

And thanks for the DUH too.

70

Posted by guest, Sep 18, 2008 10:34PM

Fuld (verb): to cower sheepishly while confused or scared.
Example: The natives fulded when the solar eclipse occurred.

71

Posted by guest, Sep 18, 2008 10:35PM

Next plan on the drawing board is to open up the Strategic Government Cheese Reserve. This will fight food price inflation.

72

Posted by guest, Sep 18, 2008 10:35PM

It just goes to show where the loyalty of these men firmly lies. WALL STREET

Giving them the keys to the Federal Reserve was never a good idea.

73

Posted by guest, Sep 18, 2008 10:36PM

@70 Best of the Day
This might make it into the next edition of the OED

74

Posted by guest, Sep 18, 2008 10:37PM

I'm fulding over the state of this country

75

Posted by guest, Sep 18, 2008 10:37PM

#67, don't vote for the Harvard Law Review guy. Vote for the U of Iowa, 6 yr Bachelor's person.
She can see Russia from her yard and knows abt the economy bc Alaska has oil.
She was Mayor of Wassilla and has executive experience...but she can't run HP as well as Fiorina did!
She wants Fannie to be smaller and McSame wants to regulate!

Party over here!

76

Posted by guest, Sep 18, 2008 10:39PM

and she can cook mooseburgers
she's a pit bull with lipstick, that'll scare the shit out of putin

77

Posted by guest, Sep 18, 2008 10:40PM

I'm sitting at my desk right now and totally fulding.

78

Posted by guest, Sep 18, 2008 10:41PM

@ 75 and 76: go back to daily kooks. We are trying to commiserate over the state of our markets. Don't make me bust out Rev. Wright, Rezko, and madrases on your sorry ass again.

79

Posted by guest, Sep 18, 2008 10:42PM

70 i love you, you are making me smile again. thank you, thank you, thank you!

you too 74 and 77

80

Posted by guest, Sep 18, 2008 10:42PM

@23: Who the fuck are you gonna buy a put option from if the market maker can't hedge by going short? D-bag.

81

Posted by guest, Sep 18, 2008 10:43PM

@78 I'll give you Rev Wright but when you're a kid, you go to school where your parents send you. I'm pretty sure OB was not happing going to school in a bathrobe and a beanie.

82

Posted by guest, Sep 18, 2008 10:44PM

@60,,,,Mitch Williams throws a sinker ball doesnt he?

83

Posted by guest, Sep 18, 2008 10:45PM

@ 78
And I will talk abt Keating 5 and the fact that McSame confuses Spain w/ Latin America!
I am going to sleep well tonight knowing the Bush will bailout everyone tomorrow and McSame will regulate when he gets elected.

Sweeeeeeet!

84

Posted by guest, Sep 18, 2008 10:47PM

@ 78, don't worry abt the markets. Phil Graham says it's all mental bitchesssss!
lol.

85

Posted by guest, Sep 18, 2008 10:48PM

The Oblahma shills make me yearn for the days of mayo, too long didn't read, merge with..., and sham wow. Please come back, all is forgiven!

86

Posted by guest, Sep 18, 2008 10:48PM

@75: Bush also graduated from Harvard. You can't have it both ways, pinko.

87

Posted by guest, Sep 18, 2008 10:50PM

Fuck!!! It must be the goldmanders at work again.

When they came for and trapped Goldman Sachs, and were moving in for the kill, Paulson takes out the nuclear bazooka to save the "masters-of-the-universe"

Someone grab their sachs and rip it off.

88

Posted by NotAGuest IFuckingLiveHere, Sep 18, 2008 10:50PM

I have heard it said that those who survive this market will be the ones who can stay liquid longer than the market can stay irrational STOP It seems to me that a rational market is one that working efficiently STOP Therefore by putting a barrier to market efficiency in the form of banning short sales can only result in an irrational market for a longer period of time STOP Am I missing something that our comrades at the SEC are seeing FULL STOP

89

Posted by guest, Sep 18, 2008 10:51PM

Here is some good news - CNBC is saying that the RTC II proposal is going to be capitalized with $500 billion. It will buy private-label and government backed mortgages.
Wasn't this a $3.5 trillion sector? Sounds like $0.15 on the dollar is this is true.
Futures still rallying....

RTC II Plan should be announced by Sunday.
Short selling ban should be announced tomorrow.

90

Posted by guest, Sep 18, 2008 10:51PM

Why don't we just admit it. Whichever one of them it ends up being, we're screwed. Hard.

Bloomberg '08

91

Posted by guest, Sep 18, 2008 10:53PM

51 You talking listed options? OTC custom strategies yes - example, an executive has tons of companys stock and asks his private banker to protect6 his position by selling him a long dated put. The bank will create a custom put strategy for him and hedge itself with a short sale. But listed options are different. No?

92

Posted by guest, Sep 18, 2008 10:55PM

88: It was all kosher until Goldman wound up in the cross hairs (No way Mack's screaming little bitch maneuver affected jack). Draw your own conclusions.

93

Posted by guest, Sep 18, 2008 10:55PM

Damn it feels good to not be a banker!

94

Posted by guest, Sep 18, 2008 10:57PM

@62, 75, 83 - Thank you. Now go back to the kids table. The grown ups are talking.

95

Posted by guest, Sep 18, 2008 10:59PM

Could these dumb moves actually cause longs to sell off in a huge wave as they lose faith in the system?

Then what would Cox-head do?

96

Posted by guest, Sep 18, 2008 11:01PM

What about the short ETFs?

97

Posted by guest, Sep 18, 2008 11:03PM

86 Its not just U of Idaho. Its someone who, like Bush, is totally lacking in a world view. See David Brooks' column on tuesday. Totally gets it. You need to be curious to be a leader. Not just be someone who prays.

98

Posted by guest, Sep 18, 2008 11:03PM

@ 95: More likely foreign buyers who have been propping up our economy with their asset purchases will run for the exits. Who will want to buy Treasuries after this? I think the USD is even more effed than it was before.

99

Posted by guest, Sep 18, 2008 11:04PM

Blue Horshoe loves Teldar Paper,.I guess your FAther isnnt on the Board of Directors of that Company, is he Bud?

100

Posted by guest, Sep 18, 2008 11:04PM

#95,

Cox would then do the logical thing and stop people from selling.

Cox will shut the markets. You can't lose faith in a market that is shut can you? Or can't you?

101

Posted by guest, Sep 18, 2008 11:06PM

97: "Gets it" = someone who agrees with you. Take a hike ass clown.

102

Posted by guest, Sep 18, 2008 11:06PM

@95: Wouldn't be surprised. Who wants to invest in a market where the rules change overnight?

103

Posted by guest, Sep 18, 2008 11:10PM

Dear Mr Paulson/Mr Bernanke,

I am honestly baffled by your indecision. Just last week, taxpayers were not going to pay for moral hazard problem caused by the greedy Wall Street, so you let Lehman fail. Just a day later, you nationalized AIG after Goldman Sachs and JPMorgan understandably decided they were not interested in doing the job for you. If AIG is too big to fail, surely those two firms will be willing to make sacrifices in this prisoners' dilemma game, as the consequences of AIG failing would mean their death and destruction instead of a few dollars on their earnings.

I suspect that AIG was a political pressure from the foreigners, since you're afraid of China (FNM/FRE was a bailout for the Asian central banks and you need them to finance your deficits, whereas AIG was a bailout for the Chinese people so that the Chinese Communist Party won't have problems associated with social unrests as people lose their savings). But that's another story that I can only speculate.

Didn't you think through the consequences of letting Lehman fail, in that the amount of derivatives outstanding alone will cause chaos in the market, leading to big worries on counterparty risks? Today Credit Suisse refused to take Morgan Stanley's name, and Deutsche Bank announced they wouldn't do credit default swap that increased risk. Morgan Stanley wouldn't have lasted the weekend. Where's the global savings glut now, Mr Bernanke?

Honestly, trying to solve moral hazard problem at this point is of no use, the root has been planted years ago, with cheap money and easy mortgage lending practice. Those were the moral hazard days, today the bankers are not lending any money trust me on that.

But today was the last straw. What changed within the week for you to panic? Is it because Morgan Stanley's 5 year CDS is trading upfront (which never happened to Lehman even the weekend preceding the bankruptcy)? Is it because Mr Paulson's dearest Goldman Sachs is in line to be the next smallest, hence the next target of the market? Is the notion of non-bailout only applies to the smallest one, hence being a bigger (and potentially greedier) crook is better than smaller one? I am honestly baffled why you are worried when more than one fail when you know this is the consequence of your inaction last week given the financial world's interconnectedness.

For full disclosure, I am a Lehman Brothers employee. I accepted my job loss earlier on Monday. But as the news streamed in throughout this week, I get more and more agitated. Today I am extremely upset. I feel hard done that I am losing my job and as a taxpayer, paying for the bailout of other banks. I don't know what will make it right - I surely don't want financial armageddon (I do intend to get another job), and I don't think you can turn back the clock to a week earlier and act on Lehman, but I sure hope both of you will suffer the consequences of your incompetence as much as I do.

Yours regrettably,
(Soon to be ex-) Lehman Brothers employee

104

Posted by guest, Sep 18, 2008 11:12PM

98

Agreed. This may finally break the dollar to deep lows, but it will probably not happen until after the misinformed, short term glee dies down.

105

Posted by guest, Sep 18, 2008 11:12PM

I wonder if the meeting convened by Paulson and Bernanke was productive at all.

They should have invited Ken Griffin, George Soros, Steve Cohen, Jim Simon, Peter Briger, and Tim Barakett along too if they were really trying to reach out.

I would have paid good money to get a seat in that room.

106

Posted by guest, Sep 18, 2008 11:12PM

96 ETFs in general are bundles of securities, with a price equal to the aggregate of the underlying holdings. You can settle a trade either in cash or by taking or delivering the underlying securities. Arbs watch this which keeps the price in check. If the underlyings, for example, were trading for more than the ETF they would buy units of the fund and then ask for and simultaneouly sell the underlying securities. The demand for fund units would cause the price to get back to breakeven. So a short ETF is a bundle of short positions.

107

Posted by guest, Sep 18, 2008 11:14PM

@ 103: My condolences. LEH absolutely got the shaft in this entire scheme.

108

Posted by guest, Sep 18, 2008 11:14PM

105

Instead, they invited Mickey, Donald and Goofy.

109

Posted by guest, Sep 18, 2008 11:18PM

The big long funds will be hurt as well. No more seclending income.

110

Posted by guest, Sep 18, 2008 11:18PM

Welcome to Pakistan??? Pakistan is a country full of corruption and ppl that blow bombs in the name of their god...

No, we're nowhere near Pakistan, even if we stop the terrorists from shorting.

111

Posted by guest, Sep 18, 2008 11:22PM

@ 106: I think you're wrong. The ETFs I hold seem to own swaps, which I believe are OTC.

112

Posted by guest, Sep 18, 2008 11:23PM

@111: Right, and who's gonna take the other side of those swaps if they can't hedge with short positions?

113

Posted by NotAGuest IFuckingLiveHere, Sep 18, 2008 11:25PM

@110 it was a reference to the rules Pakistan imposed on their markets a few months (weeks?) ago

114

Posted by guest, Sep 18, 2008 11:27PM

@110: "If you short sell you hate America." Get real. Go back to watching Fox News, loser.

115

Posted by guest, Sep 18, 2008 11:27PM

@ 110: we've got homegrown bombers too, it's just now we have the financial market to match.

Paulson: "Hmm, wouldn't everything be dandy if we could just remove these damn illiquid loans from the balance sheets?"

116

Posted by guest, Sep 18, 2008 11:31PM

@112: Not disagreeing with you. Just saying that holding swaps is different than holding a bundle of individual short positions. This BS is certainly going to derail the ETF business.

117

Posted by guest, Sep 18, 2008 11:34PM

#109

Everyone is gonna get hurt. That's why gov't intervention is never a good idea and must only be an absolute last resort.

Securities lending will be much more restricted now and probably barred for banking and financial stocks.

I wonder how many years it will take for the confidence to return after this shit storm. Paulson and Cox will resign before the end of the year so they won't have to take the blame.

118

Posted by guest, Sep 18, 2008 11:37PM

we must be missing something here.. paulson's no idiot, are we sure it's ALL shorting that's banned, not just shorting that's not tied to a hedge or a long-short position? i'm pretty sure paulson understands the consequences of banning shorts better than all of us here, so there must be something more to this...

119

Posted by guest, Sep 18, 2008 11:38PM

Bold prediction: markets tank tomorrow as HFs sell their longs into the brief glee festival that continues from this afternoon.

120

Posted by guest, Sep 18, 2008 11:40PM

@119

What about all the shorts that have to cover IF the rumors are true?

121

Posted by guest, Sep 18, 2008 11:41PM

#118

Paulson might put in place a system to distinguish between "hedgers" and "speculators" like they do on some commodity exchanges.

To add to that, Paulson and Cox will have the regulatory power to compel hedge funds and speculators to disclose their short holdings.

I think these two measures together will work.

122

Posted by guest, Sep 18, 2008 11:45PM

@121 thanks, gotcha..

123

Posted by guest, Sep 18, 2008 11:45PM

I'm long groceries, guns, and gold, and short everything else.

124

Posted by guest, Sep 18, 2008 11:47PM

@118

Are you fucking nuts? When you mess with Goldman Sachs, he got ape mode.

125

Posted by guest, Sep 18, 2008 11:48PM

i dont agree with morgan's stock being low after they beat estimates. i agree with banning shorts if that's what we need.

you can all hate on my comment but you're nothing but greedy bitches and we all know what happened to the greedy chaps at lehman =)

126

Posted by tduncaneu, Sep 18, 2008 11:49PM

Now Bloomberg says that the SEC ban would only apply to brokerage firms. Appears WSJ F## Up the story. Still not approved by commission in any case.

127

Posted by guest, Sep 18, 2008 11:51PM

@53 interesting points, that aren't really being discussed by anybody

128

Posted by guest, Sep 18, 2008 11:52PM

@125

MS earnings were as of Aug 31. So reporting great earnings ain't worth much when HFs are pulling business and your balance sheet is deteriorating.

SEC: Welcome To Pakistan

Posted by Bess Levin, Sep 18, 2008, 8:53pm

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