It’s sort of odd that Lehman is “sitting on 500,000 pounds” of yellowcake uranium. Not because it is odd for firms not directly in the business to own an interest in the element. This is quite common actually as uranium futures are actually traded now. What is unusual is that Lehman would seem to have taken physical delivery- a scenario which would imply licensing and a host of regulatory headaches that seem silly when you can trade cash settled futures contracts if you really want to play the metal. In any case, Lehman acquired the stuff “under a matured commodities contract.” (Read: The contract expired and they were forced to accept physical delivery). Now they are stuck with a pile of the stuff in Canada- where no one wants it, and in a down market.
Doh.
Lehman Sits on Bomb of Uranium Cake as Prices Slump [Bloomberg]
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
It’s not their traders’ fault. It’s the market’s fault.
I’ve heard a disgruntled employee (aren’t they all) let it expire so they had to take physical delivery…
awesome.
Definitely has one-upped the proverbial ‘tin foil your colleagues desk’ trick!!
I’d happily trade you some Chivas, Rolex’s, Ferraris and Ferragamo platform shoes for it. Call me.
Kim
Genius. Now that they are a nuclear power, perhaps it’s time to reopen bailout negotiations with Treasury.
Well, I am not involved in any of this, so there.
~Gruntled Employee
Wall Street, America
UX contracts are not physically settled. This was a physical deal.
Dear Mr Lehman,
Though you are undoubtably a jew, if you or your brother Mr Barclay would provide me this material I would gladly trade you 40 heavanly virgins and an eternity of honeyed figs.
A. al-Zawahiri
Chairman
al-Qaeda
Isn’t this the kind of toxic asset the government should probably be taking off their books, like, now?
Wasn’t this an episode of South Park?
@10 you use words that I havent heard before but which sound right (Converdyn Comhurex, etc) so I am willing to give you the benefit of the doubt
Speks highly of Leman’s risk management if they have to go to delivery of a commodity without it having a pre-arranged home.
Where are the Lehman risk people finding work these days? So I can short their employer.
@7 40 vegans? awesome.
Factiod: No isotope of Uranium has an atomic weight of 308
I am a former Lehman brothers commodities trader.
What is the difference between a futures contract and a physical contract?
Um, #14. You are right that Uranium doesn’t have an atomic weight of 308. Glad wikipedia helped ya there.
In this case it is U(letter)-3-O(letter)-8, as in Triuranium octoxide, aka yellowcake.
Where does the article say that Lehman took physical delivery? Don’t see it.
@ 16/14
OH SNAP!
@14, Factoid:
Triuranium octaoxide (U3O8)
An oxide form of uranium that is the most common chemical form found in nature. U3O8 is very stable and has a low solubility in water.
@16, damn!
/19
(I thought the same thing since the letter O looks a lot like the number 0)
My head is starting to hurt.
Dick: Hey Timmay!! Any chance of re-thinking that bailout now?
Timmay: Uhhh, ehhh, hmmmm
Dick: Don’t worry, I would never use it -I may know some people that may though…might wanna run that by your boss. Oh, and how’s Hank been?
BHO: Ehh Dick, so my teleprompter is tellin me we got an issue something about toxic assets or something or another..
Dick: F your teleprompter you twit, give me back my money or those pirates will be the least of your problems – and oh yeah, if you see Hank, tell him he’s the first to go.
Someone hold my glasses and pocket protector, this might get ugly.
@4 – well done!
Lehman got a license to handle Uranium just before bankruptcy, so yes they did take physical delivery.
I ate some cake this weekend that was yellow.
Jefferies analyst
Yellow cake, bitches!
http://images2.wikia.nocookie.net/uncyclopedia/images/thumb/d/d4/Yellowcake.jpg/180px-Yellowcake.jpg
@10 you’re an idiot. I suggest chemistry lessons.
I, for one, applaud Lehman Brothers for sticking by their guns:
http://www.moneyweb.co.za/mw/view/mw/en/page1329?oid=140197&sn=Detail
http://www.forbes.com/2008/05/19/commodities-energy-uranium-biz-energy-cx_wp_0519uranium.html
I’ll bring the hex if you’ll bring the beer.
-Your friend, Mahmoud
@28 back to grad school!
I’m @10. For @28, forgive me for not hitting the shift key when I typed “O”. It’s U3O8. For @11, Converdyn is the official depo licensed by the US government. Comhurex is the equivalent in France.
hey, where has Jim Cramer been the last couple of days? His hows have been repeats. Wonder if he will be the next dylan ratigan. Don’t forget, they have that same producer.
Yellow Cake? Yay! Whose birthday is it?
Photo of the Lehman MD overseeing the matter:
http://climateprogress.org/wp-content/uploads/2008/07/homer_polonium.jpg
NdMdOZ Really enjoyed this post. Fantastic.