Lehman

Thanks for confiding

im not sure if they are going to be bought out, but i do think that in the long run, it might be hard for lehman to continue on without some help.

I think the current situation is largely fueled by rumors... barclays looking at Lehman for a discount, random firms not trading with Lehman, etc... Nevertheless, the firm has a lot of problems.

My guess is that Lehman's position in the market will continue to fluctuate until they post a solid quarter, which is what they really need. The stock is highly undervalued from a fundamental standpoint, but there is so much headline risk with the company that people are still selling.

i dont think the firm will be bought out but i dont think stability will come until they can post a round of better earnings results. it is hard to think of a firm that would want to purchase lehman at this point in time. an lbo on a company of lehman's size would require to much debt financing, and the capital markets are not ready for that right now. most other banks big enough to buy lehman are having troubles of their own and are busy raising capital. i think a buyout would require the Fed to play a role, and im not sure if they are willing to do that either.

im curious to know what companies you think can buy lehman at this point?

I actually heard rumors today that GOLDMAN is looking to buy them. Personally i dont see that happening.

"Oh - the ladies ever tell you that you look like a fucking optical illusion?"

There are tons of rumors flying around this stock. It will be interesting to see what happens. Hopefully it won't be too painful.

www.sharpeinvesting.com

I'll be honest, I almost had a mini-breakdown about the future of the IB industry after yesterday's closing bell. One major I-Bank is dead, another almost went down yesterday....when do we start to question the business model of these banks? When a single rumor on CNBC can almost kill a multi-billion dollar firm, that tells me the current model may not be viable.

Sure, I understand that all industries have peaks and valleys, but where is the floor in this one? It seems like it's set up perfectly for hedge funds to short the hell out of a bank after spreading a rumor, then take up a long position and profit on the upside after coming out and saying the rumor is not true. Why can't they keep doing this? If Bear fell due to solvency concerns when they $18mm in liquid reserves, why can't this happen to every other major I-Bank?

Someone please talk me down from the ledge and tell me why I'm wrong. I seriously had trouble sleeping last night thinking about this.

That's just the nature of the business, with greak risk comes great return. Not everybody can be a winner.