David Einhorn’s ‘Must-Read’ Speech Exposing Lehman’s Lies

Posted on May 23rd, 2008 in Mr Mortgage's Personal Opinions/Research

12pm EST…It was just announced that David Einhorn will be on the closing bell with Maria Bartiromo at  3pm EST, therefore I am re-posting the story below from Friday so you have all of the hardcopy material at your disposal. This story is really getting traction. -Best Mr Mortgage 

Story Below Originally Posted Friday, May 23rd.

Below is the transcript from David Einhorn’s speech at this week’s Ira W Sohn conference. Einhorn is the President of Greenlight Capital and has achieved returns over the past 12-years of 25% on average. Needless to say, he knows the game.

I can’t say enough about what this man is doing in shedding the light on such a murky and taboo subject that everyone, including the SEC, is ignoring.

After an in-depth and informative intro, he dives right into Lehman with research that is quite damning. David Einhorn exposes Lehman’s lies. The same lies that rallied the stock from $20 to near $50 within a few days after Bear Stearns went down. If this turns out to be on the mark, this could be big trouble for Lehman and perhaps a Groundhog Day scenario.

If you look at today’s options action, they were buying June puts down to $17.50, which is the lowest available. The put volume was reminiscent of the week prior to the ‘Bear Stearns weekend’.

This story maybe just getting started. Perhaps now that the facts are out, this time they won’t be able to blame their stock price crashing on short sellers. Regular sellers who just do not want to be part of the lies can drive a stock price down too, ya know.

Thanks for the insight David! -Best, Mr Mortgage

“ACCOUNTING INGENUITY”- 5/21 By David Einhorn, Greenlight Capital

David Einhorn – ‘Accounting Ingenuity’ – Ira W Sohn 5/21/08

Also, for your weekend reading pleasure, below is a copy of his speech last month, “Privite Profits and Socialized Risk”. (don’t miss the last paragraph)

David Einhorn – ‘Privite Profits and Socialized Risk’ 4/8/08

FINALLY, for you die-hard Einhorn junkies like myself, here is the link to his book, ‘Fooling Some of the People All of the Time’. This is about the hell-storm that started with the SEC when at the very same Ira W Sohn conference on May 15th 2002, he spoke about his best investing idea at the time, which was shorting Allied Capital. You gotta read this.

RELATED MR MORTGAGE RESEARCH/STORIES

MR MORTGAGE – LEHMAN’S DIRTY ALT-A EXPOSURE REVEALED

Mr Mortgage – Breaking April CA Foreclosure Stats

33 Responses to “David Einhorn’s ‘Must-Read’ Speech Exposing Lehman’s Lies”

  1. hilarious how he stumped Lehman’s execs w/ a friggin prospectus from India for some Asian power company.

  2. absolutely criminal – oh and by the way Erin Callan, the CFO just closed on her new multi-million penthouse apt in NYC in the past week. She must have been paid big to save the company from destruction with her lies.

  3. […] Read the rest of this great post here […]

  4. I lowered my cover/sell to close prices on LEH. My cover targets are $4, $8, $12, $22. It’s pretty interesting that today’s put volume is similar to BSC’s.

    I recommend setting a cover target of $3-$4 instead of waiting/hoping for it to go to zero. If we do see another BSC-style take over, the stock will plummet to $3 and then rise to $10 even when it’s valued at $2.

  5. Thanks for the link Mr.M. Keep spreading the truth. Was amazed that the existing home sales numbers today “beat expectations” but didn’t pump the markets. Maybe that tactic is finally being ignored.

    BTW, anyone pimping Einhorn for SEC Chairman in the new administration?
    No doubt, people will say his hedge fund background is shady, but he was cleared and proven right by the investigation. Moreover, the first chairman was Joe Kennedy, stock market speculator and manipulator par excellence. He was effective in cleaning things up because he knew how the system really worked.

  6. Einhorn lost on ALD. Now he using same game, same strategy on LEH. Einhorn is a gambler, both literally and figuratively. All in, Einhorn!

  7. My question is,who else?

  8. Almost all of them ?

  9. Right Marc.

  10. Thank you, Mr. Mortgage, wish you a wonderful holiday.

  11. I first saw this over at boombustblog.com with an associated piece o Morgan Stanley. These companies are desperate to avoid writedowns because, in Lehman’s case they would be Bear Stearns #2. Can you imagine the reaction when we get a 2nd failure. All I can say is wait for the CRE implosion and then let’s talk.

  12. you too Feng – thank you for all of your participation.

  13. NO MORE INVESTMENT BANK BAILOUTS!!!

    Let these criminal corporations swirl right down the toilet bowl, where they BELONG!!

  14. Most banks are on the brink of complete insolvency NOWWWW!!!!

    Try to withdraw more than $500 from your bank right now, and see what happens. A friend tried to withdraw that amt. from WELLS, and they told him, their cash withdrawl limit that day was $200!!

    200 DOLLARS!! Can you Freakin believe this??

    The banks have NO CASH!! Be afraid, Be very AFRAID!!

  15. I wouldn’t go after the monthly puts on LEH. I’d go after the Jan 2010’s. You never know when people are going to catch on to the truth especially when the corporation is not telling all the truths. I have some of the LEH Jan 2010’s myself.

    There’s no cheap stocks in the market right now. The housing bubble was first to pop but now we also have a commodity bubble that has to go. The commodity bubble will be the one to affect the major market as this directly effects pricing of goods and thus profit margins.

  16. Lehman is on such shaky ground right now that a lack of confidence created by Einhorn, perhaps some other reports coming out, stock price falling, broader market weakness, more negative credit/housing news, etc could cause a swift loss of confidence and a repeat of the Bear incedent. I truly believe Lehman will go. It could happen much sooner than later.

  17. […] ————David Einhorn’s ‘Must-Read’ Speech Exposing Lehman’s Lies –  MR Mortgage […]

  18. The stock market is the REAL BUBBLE

  19. Best strategy. Bear spread 2009. Don’t be greedy. These companies are members of “to big to fail” club. They will keep them alive. However expect a lot of dilution and stagnant share prices a lot like that piece of shit UBS.

  20. AndyJ Said:
    May 25th, 2008 10:53 am

    Most banks are on the brink of complete insolvency NOWWWW!!!!

    ****************************************************************

    Dear AndyJ, Just so you understand, claiming that a bank is insolvent without actual proof can be prosecuted as a felony. While you didn’t name a specific institution, you came close by use of the word “most”. And no, it is not protected speech. Google it.

    And just in case anybody actually believes AndyJ, fear not, most banks, in fact few banks, are anywhere near insolvent.

  21. AndyJ is more right than Toby and nothing in Andy’s claim is a felony. You have to show intentional wrong-doing or misleading.

    Toby more writedowns will come. The banks will be out looking for cash again, cutting dividends.

    I believe AndyJ is right. Most banks are on the brink of complete insolvency.

    They’ve levered themselves so much to make profits they can’t handle it when things go wrong. Anyone who trades options understands this quite clearly. If you don’t understand options it’s good reading to understand what the banks have done and why deleveraging can be so damaging.

  22. Most of us agree there is significant pain in the banking sector. However, when people start tossing around “most banks are insolvent”, you lose almost all credibility. For those, who say “let LEH fail”, do you actually understand that it will hurt us all. Due to all the counterparty risk, and even tighter credit that would follow. That, once again would be severe pain fo rall. I don’t see how anyone would want a complete implosion of our financial system, other than al queda of course. Lets stick to the facts! There is no reason to embellish the problems, as they are severe enough as we currently sit.

  23. We are all hurting. We know it. Did the executives of these corporations or the president of the FED cared when he personnally knew what was going on ? Did your stinking politicians cared ? Nope. “Après moi le déluge.” It’s like Greenspan that clown, always saying that you cannot regulate and control. Oh! Come on!

    If all banks are on the brink ? (we cannot know), it means ALSO that we are ALL on the brink of bankruptcy, me included.

    That’s what is vicious about life. You do nothing wrong and you become a victim of a system in which you have no say. In reality we cannot say anything because we don’t know what is really going on. ENRON one month before going bankrupt had a triple A bond rating. So much for the mythical american transparency and that bullsh-t.

  24. Toby: Nothing Andyj said was felonious. Andyj was clearly epxressing an opinion that many, many believe to be true. This is not a felony.

    If anything, you have commited a felony for mistating the law with the intent to deceive Andyj and other readers.

  25. Insolvency….What does that mean? Does it mean there is not enough capital reserves to cover outstanding debt? Guess that about sums up the entire economy. Globalization is a crock and there are more problems to come. We are a failing economic system that, in turn has been feeding the world global economy as a whole. it has been fed on American credit and debt. Those days are no longer and the aftershocks will be felt soon. These will reverberiate back in the form of lost profits for these so called “global” companies and we will see just how global we truly are. I am not an economist but a realist and am also a real estate appraiser. I have seen this happening in the mtg market for the past decade. There is no easy way out. It will be a long and painful climb out of the massive hole we have dug, to our own demise. The financial system is broken and the government cannot bail out the entire system. If we continue to print more money….we could become the next Mexico. The truth actually hurts less in the long run than the damage being done by covering it up with lies on top of more lies for the sake of consumer confidence or an election. We need to take responsibility as a nation and do somthing to right the ship. Exporting all of our bad paper, knowledge, jobs, and corporations overseas is not the answer.

  26. Amen, Money Man!!

    I can’t understand why there aren’t riots and demonstrations daily outside of the Fed. Consumers are such sheep…they just believe whatever they are told I guess.

    MAD MAX ECONOMY, here we come!

  27. “Pencils. Anybody want to buy a pencil? Hey mister, how about a pencil?”

  28. Saudi Arabia will save the US banking system. Or China ? Anyways the whole country will soon be up for sale. Oupss. It’s already sold. Just kidding. This morning may 28th 2008, there was a fantastic interview with Einhorn on Bloomberg TV. This guy is really courageous to go against this gang. Lehman Brothers management is really nervous. They refused to answer to the allegations of Eihorb. They are indirectly confirming what a lot of people think about Lehman. Instead of comfronting, they are hiding and refusing to answer questions. Bad sign.

  29. […] May Have to Raise Capital – and a ton of it. So, now after the David Einhorn expose‘ and all the other mainstream media outlets finally understand how all the banks are writing […]

  30. […] David Einhorn tells the Lehman story the best. http://mrmortgage.ml-implode.com/2008/05/23/david-einhorns-must-read-ira-w-sohn-speech-accounting-in… […]

  31. Lehman brothers will not go down like Bear did. Lehman’s chairman and CEO is one of the NY Fed bank’s 9 board of directors, along with JP Morgan’s CEO and others. The fix is in.

    http://www.ny.frb.org/aboutthefed/org_nydirectors.html

    If Bear Sterns’ CEO was on the board they’d be the ones spewing survival propaganda while JP owned Lehman’s.

    I for one would love to see an implosion of our financial system. It’s one large ongoing fraud that enriches a tiny minority of our population and forces the majority into a life of indentured servitude. Patroitism and talk of al queda is just the mantra of the ignorant. First off, the USA is the deadliest terrorist organization in the middle east over the last 5 years causing hundreds of thousand deaths in Iraq. Second, I love the irony of someone trying to support our current financial system as something patriotic when our founding fathers wrote about the evils of our current system and would be compelled to fight against our disgraceful government.

    Ignorance is bliss especially for those claiming to be realists.

  32. […] short who is lying’. Now we know who the liars and deceivers are. They are ganging up on David Einhorn over his views of Lehman now too. He will be proven right as […]

  33. […] of this they chose to lie, by padding their earnings and showing a profit, as proven by David Einhorn and Brad Hintz. Merrill and Goldman who reported shortly after Lehman may have tekken their cue […]

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