Lehman Brothers: Rumor or Reality?-Minyanville

BUSINESS & MARKETS

LIFE & MONEY

VIDEO

COMMUNITY

SUBSCRIPTIONS & PRODUCTS

Lehman Brothers: Rumor or Reality?

Todd Harrison Jun 03, 2008 2:40 pm


		It's a fragile financial world.

We don't "do" rumors in the 'Ville but we'd be remiss if we didn't pass along our ears to ye faithful.

The chatta--and it's just that, unconfirmed chatta--is that counter-parties are "pulling a Bear" on Lehman Brothers (LEH). In other words, the "rumor becomes reality" scenario is making it's way around the trading wires.

I have no insight to the legitimacy of these stories but I'll say the same thing I said about Bear Stearns (BSC) in March. If rumors alone can bring down a franchise, how strong can that franchise be? This speaks to the fragility of a globally interwoven banking system in a finance-based economy built on more than $500 trillion of derivatives.

STOCKS
RELATED ARTICLES
ALSO BY...

The conditional elements for meltage are in place--we've been warning about the wobbling wheels since last summer and speaking of the conditional elements for years.

I'm not smart enough to know if the comeuppance has arrived--there are huge agendas and proactive initiatives in play--but I'll humbly note that the recipe for slippage that we've spoke of--BKX 75, a stronger dollar and slippage in commodities--is quietly in place.

To be clear, I don't have a position in Lehman--or any financial, for that matter, despite my incessant and insistent rambling about the importance of BKX 75. The meat of my heat is in the short commodity space, which I'm picking at and trading around as a function of discipline, and I'm trying to stay tight

The purpose of this post is to again point to risk management over reward chasing as the modus operandi of choice. By the time most people learn that lesson, it may be too late.

Be a Minyan. Be proactive. Be careful. And be yourself sir. No matter what happens, they can't take that away from you.

UP TO THE MINUTE STOCK MARKET INSIGHTS ON MINYANVILLE'S BUZZ & BANTER

R.P.


Rate this article:			(0 Votes)

more BUSINESS & MARKETS articles »

Daily Article Index �

tags:

Comments (6)

See All Comments »

Back Lash

View Exchanges


06-03-2008, 4:03 pm
1/2 quadrillion $'s in derivatives, all intertwined the oct. 27, 1997 mini-crash, wherein trading on the nyse was first haulted for 30 min and then later suspended for the rest of the day, celebrated it's 10th anniversary las Read More

Howard Johnson

View Exchanges


06-03-2008, 5:57 pm
I took a cursory look at the puts on Lehman today. It looked like a beehive, but I don't know how it compares with the blatant activity which preceded Bear's demise. Read More

Dean Simmons

View Exchanges


06-04-2008, 9:48 am
Today's rumor is that LEH will sell part of itself off to raise cash. It's too big for a BSC-style takeover, so it will die a slow death, one piece at a time. Read More

Walt Bridge

View Exchanges


06-05-2008, 12:48 am
Television's C-SPAN is usually the cure for insomnia, but not on June 3, when the Senate Commerce Committee sat to hear a panel of experts on Commodities. Michael Greenberger is the former head of the CFTC. He testified that 30% of the East c Read More

Walt Bridge

View Exchanges


06-05-2008, 1:27 am
Copy and paste to hear testimony on OIL and investment banks. http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=1c9f4e27-376a-49c8-a244-25730c4bbbe8 Walt in KC Read More


discuss this article and more on the mv exchange

No positions in stocks mentioned.

Get real-time options trading ideas from Steve Smith, veteran options trader and newsletter author, plus let him show you the way to cut risk and boost your returns through the strategic use of options. Click here for a free 14 day trial to OptionSmith by Steve Smith.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.