6/4 – Lehman Update – Things Are Getting Dicey…Again.

Posted on June 4th, 2008 in Daily Stock Market / Economic News - The Real Story

12:01pm EST – Lehman Turns to Korea after burning through all it’s loyal US investors. (Wall St Journal)

By the way, did you all hear how Lehman was out in the open market today buying its own shares to defend it’s stock price on the drop below $30? Way to use that Fed facility!

Fact is that LEH is buckling under the weight of all the bad ‘assets’ its books.

Bill King commented on Lehman’s actions…’This is a sign of desperation and is EXACTLY the misguided action that followed the 1929 Crash:  Banks’ credit crisis solutions have echoes of 1929 Depression   In the great crash, investment trusts with vast cross-holdings in each other tried to stem their collapse by buying up their own stock in what the economist JK Galbraith in his book, The Great Crash 1929, described as an act of “fiscal self-immolationhttp://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/01/cccrisis101.xml 

David Einhorn nailed Lehman to the Wall a couple of weeks ago. This is a must-read.  http://mrmortgage.ml-implode.com/2008/05/23/david-einhorns-must-read-ira-w-sohn-speech-accounting-ingenuityhello-lehman/

Einhorn was also in the NY Times today…this is a good read. http://www.nytimes.com/2008/06/04/business/04lehman.html?_r=1&hp&oref=slogin

In addition, a couple of months ago I ran down Lehman’s ‘Aurora Loan Services’ mortgage rate sheet and product offerings showing what they consider ‘investment grade’ loans and what is likely sitting on those Level 3 books. http://mrmortgage.ml-implode.com/2008/04/06/mr-mortgage-exposes-lehmans-massive-dirty-alt-a-mortgage-exposure/

Lastly, the following is a link to my video on what the ALT-A universe is all about. Lehman’s ‘Aurora Loan Services’ was the King of Alt-A for years. Those of us in the mortgage industry have always said ‘all roads lead to Lehman’. http://mrmortgage.ml-implode.com/2008/04/16/mr-mortgage-alt-a-exposedmuch-worse-yet-to-come/

4 Responses to “6/4 – Lehman Update – Things Are Getting Dicey…Again.”

  1. bravo mr m! keep up the good work!

  2. Is it me, or didn’t I hear that Lehman said during the day yesterday, that they did not need to raise capital? Wow, what a difference a day makes….LOL…Here comes the next wave, but don’t tell anyone at CNBC, etc.

    thanks for the updates, Mr. M

  3. Asiatic or arab sovereign funds to the rescue. If they keep at it like that, they will soon be asking help from Iran ! 🙂 Now that would be real funny ! The revolutionnary guards pension fund announces an equity participation in Goldman Sachs ! 🙂 Why not after all ? Now that Mohammar Khadaffi is your friend and recently invested in one these messed up firms.

  4. The current rally/short squeeze is interesting. I did some covering at 31.40 and reshorted that position at 34.10.

    I may have to raise my main cover targets to 12, 16, 22, and 27 as some shorts are casting doubts of how low LEH can go.

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