My opinion about the rumor "Major Investment Bank go bankruptcy"

will not go bankcrupt b/c of prop losses alone. Through Aurora Loans, they hold 60-80bn in mostly Alt-A loans on their balance sheet. Depending on mkts, those are down 5-15%, good luck marking that on your books, obviously they have hedged some of that risk away, but who knows how much, and most definitely not all of it. They also have ~$25bn in loan/bridge exposure that will likely get put on their books, mark those down 4-10 pts in the coming months. And then any prop losses on top of that. They shut down their subprime bus yesterday. The Leh in trouble rumor has been in the market for almost a month now, do to Aurora. If they are going under, it will likely not be a huge surprise to Leh execs, who naturally would have brought the Fed and other banks in by now to talk through scenarios and no their exposure

I am praying to God it is not Lehman Brothers

Its Lehman Brothers (at least thats what I've heard so far)

Is your source credible or are you just talking your own book?

sources right now, just rumors. Unless you talked to Dick Fuld or someone on the management committee, I would chalk it up to a rumor which has been out there for a while. That doesn't prevent us from speculating, and looking at their current business and positions, and observing that they probably will have a bad quarter, but how bad is questionable.

I'm interested because a close friend has 8-figures riding on the outcome...

Who actually thinks no investment bank will go bankrupt?

No major ibank is going bankrupt. Do any of you know anything about bankruptcy and what it exactly means? While banks are taking hits to earnings because of their losses on hung deals, a bankruptcy would require either a lack of liquidity (funding) or a default that is triggered by tripping covenants. No investment bank is anywhere near that happening.

correct, the chances of a bank becoming insolvent are very small, but it doesn't mean that a few of the banks cannot/willnot take major hits to their balance sheet in the coming months; also, given how fast we have seen liquidity dry up in the mortgage space and credit space in general, with effectively no bid for highly rated CP, I wouldn't be arguing that liquidity shouldn't be a concern for every financial institution in general (large, commercial banks included). Who would have said a couple of months ago that it was even remotely possible for a company such as Coutrywide to have rumors about potential bankcrupcy? Also, no bank, especially i-banks like Lehman, will sit there and watch their stock drop 70% and limp on, they would sell themselves or find a capital partner first (such as Bear Stearns rumors suggest)

so which bank was this?

guess this was Bear Stearns.

Stumbled on this post and it's pretty amazing

Bump

Its probably Northwestern Mutual. 

Lmao what a thread to pop back up

There’s definitely a lot of noise in rumours like this, and both earlier replies are right to focus on exposure rather than headlines. A major investment bank doesn’t suddenly collapse purely from trading losses, it’s usually a mix of liquidity pressure, asset write-downs, and market confidence drying up at the same time.

Lehman does stand out in this discussion, mainly because of its heavy mortgage exposure and the timing of shutting down subprime operations. That kind of move can either be proactive risk control or a sign they’re trying to contain deeper issues. Still, as mentioned, something as serious as Chapter 11 wouldn’t stay hidden for long given regulatory oversight and counterparty visibility.

From a broader financial and compliance perspective, situations like this highlight how transparency and structured financial reporting matter across jurisdictions. Firms working with international standards especially those aligned with frameworks discussed by groups such as IRS Ireland tend to have clearer disclosure practices, which makes it harder for major risks to stay buried. This is something worth exploring further at:irs-ireland . com, if anyone is interested in how financial oversight and reporting differ globally.

Overall, speculation is understandable, but without confirmed filings or liquidity events, it’s more likely the market is pricing in fear rather than reacting to a confirmed collapse.

It has to be UBS!

Can you imagine if the same actors in the Lehman collapse come back for this movies part 2 and collapse UBS?

-Real estate funds gating or stretching redemptions,  an early sign liquidity was tighter than marketed
-Private credit redemption limits picking up, suggesting investors wanted cash before marks moved
-Fed asking about bank exposure to private credit implying regulators were seeing buildup of risk
-Wealth outflows and advisor movement indicating sticky capital not as sticky as expected
-Ongoing integration from giving less room for error operationally

The signs were all there

Interesting breakdown. I think you’re right that most of these big banks are too interconnected for anything to be completely hidden, especially something as serious as a potential Chapter 11 filing. At the same time, in moments like this, market perception can move faster than confirmed facts, which is often what creates the real pressure.

A lot of what we’ve seen in financial markets over the years also comes down to how risk exposure is communicated and managed across institutions. I recently read an interesting piece on cost-benefit analysis of AI call agents vs staffing, and while it’s more about operations, it made me think about how efficiency and risk monitoring systems in large organizations can sometimes lag behind real exposure — especially in complex environments like investment banks.

Relax guys, total non-issue.
1. Greenspan literally said markets self-regulate, “too smart to fail.” #atlasshrugged
2. Rating agencies are also self-regulating. The subprime stuff is IG. Name ONE time in history those guys missed a call. I’ll wait. #AAA4Ever
3. My buddy at Lehman says their home price appreciation models don't accept negative numbers. A feature not a bug. #unprecedented
4. Bernanke wrote his dissertation on the Depression. You think God would let that man preside over another? #foolmetwice
5. Chuck Prince said the music’s still playing…
… so keep dancing you mids.
Forgot to hit send before.