As leveraged assets go down in value, the leverage multiples go up. Adding to that multiple is the falling dollar and the fact that these assets are in reality debt deposits, not cash deposits, that were passed on in different forms to be leveraged over and over.
A shotgun weekend wedding for Lehman Brothers (LEH)? There's a lot of baggage on its balance sheet. Like most of the financials, notes Toddo, it's a double-edged sword.
Now watch this! Toddo's staring at Wachovia (WB), which isn't participating in today's bank rally. Also, Retail Holders (RTH), Research in Motion (RIMM) and Washington Mutual (WM).
What's driving crude? The scuttlebutt is that a $3 billion fund is barring redemptions, which could be affecting energy and, indeed, commodities.
In the Buzz & Banter segment, Toddo talks about the S&P. To his mind, its fair value is considerably lower given where credit spreads are.
Minyanville staff and contributors may trade or hold securities that are discussed in an article. Staff and contributors will indicate whether they have a position in any security discussed, but will not indicate size or direction. The information on this site is not intended as individualized investment advice and all investment decisions by a reader must in all cases be made by the reader either individually or together with his/her investment professional. The views expressed in articles appearing on this site are solely those of the staff and contributors and should not be attributed to any other person or entity except where expressly stated. Minyanville staff and contributors will not respond to requests for investment advice.
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