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Irresponsible Rumor Mongering About LEH

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This morning Lehman was down by 15%, about half of the decline at Fannie Mae. Lehman's credit default swap spreads blew out 35 basis points to 320 basis points. That means it'll cost you $320,000 per year for five years to insure $10 million in debt.
CNBC mentioned a rumor circulating about Lehman but then got all coy about it, the Jamie Dimon-NY Times-Vanity Fair fatwa against rumor mongering apparently having an effect on people squeamish about the threat of being sent to pound-you-in-the-ass prison. Luckily we are not those people. After the jump, we lay it on you.

Allegedly PIMCO is pulling its business out of Lehman.
Obviously, this a pure unsubstantiated rumor. No independent confirmation. No sources even familiar with the matter (although it's definitely being discussed around the water cooler at LEH HQ). It's just what people are saying, and some of those people might be Jimmy Cayne "playing Wall Street" and some of those people might be Erin Callan, making shit up because, really, fuck those guys. Or maybe it's totally true. Who knows? It's all relative.

Reuters is now running a story saying that PIMCO is reducing business with Lehman.

Update II:
Lehman pops a dollar on the word from official spokesman that Pimco continues to trade with Lehman. But riddle us this: have they reduced their exposure to counter-party risk with Lehman or not? Just having some business with Lehman isn't exactly a vote of confidence.