Lehman In Trouble & Goldman To Take Write-Down

Posted on June 12th, 2008 in Daily Stock Market / Economic News - The Real Story

Forbes is sounding like a blogger!

I heard these rumors too and it makes sense. Lehman’s stock plummeted today far below the offering price of $28 on serious volume. As a matter of fact, as the stock began to fall and pick up steam, I also heard from very credible sources that a few of the larger subscreibers to the $28 offering got on the short side. This, in order to prevent any further losses and perhaps make a little on the run down. At this point in time, the trust is gone with Lehman. The investors in their offering last quarter are significantly underwater and Lehman has been exposed as a liar. If this deal does not go down tomorrow at $28, Lehman is in the kind of trouble that leads to bad things in this market.

“With its $4.0 billion common stock offering due to close Thursday, Lehman Brothers was battered by rumors of problems with the deal, and came under heavy selling pressure late Wednesday. Shares of Lehman (nyse: LEHnews people ) closed down $3.75, or 13.6%, to $23.75, 15.2% below the $28.00 at which it priced the offering.

The losses accelerated into the close on what TradeTheNews.com called “vague chatter” that the capital raising plan had run into trouble. (See: “Lehman’s Bear Necessity”). The report said speculation suggests funds could renege on the deal before Thursday’s closing.

Such a turn of events could prove a devastating blow for Lehman, which has spent much of the past few weeks trying to shore up confidence in its balance sheet and liquidity position in the wake of the collapse of Bear Stearns. (See: “Lehman’s Confidence Game”)

Lehman will surely be a focus on Thursday, as will the rest of the financial sector, which was thrown for another loop Wednesday in a volatile week.”

On the Goldman from, I don’t care what type of ‘hedges’ they have had in place during the past year of credit market turmoil, they will take losses just like everyone else that were big mortgage players. Goldman played as hard as anyone else. I know this for a fact. If Goldman are exposed as liars in the next week, that would make for quite a shocking ‘event’ for those still drinking the Kool-Aide.

“Rumors that Goldman Sachs(nyse: GSnews people ), virtually unscathed by the credit crisis to this point, could be report second-quarter write-downs June 17 may have had an impact, but were hardly the only cause for the selling pressure.”

Source: Forbes

MORE MR. MORTGAGE RELATED STORIES

ALT-A Exposed – Much Worse Yet to Come

Lehman’s Dirty ALT-A Exposure

15 Responses to “Lehman In Trouble & Goldman To Take Write-Down”

  1. They just fired Callan (CFO) and Gregory (COO) 8:55 am

  2. Mr. M – if you were watching cnbc this a.m. when the news broke re: callen and gregory your ears would have been bleeding – suddenly Einhorn right (wow? really?) and dick bove on the phone with back filling drivel….you and your sources nailed it, everyone knew lehman was lying thanks to Einhorn – but my question now is it would seem this stock offering to close today can only fail? – and in the middle of the game during the stock offer they have changed sr. mgt? – they have to be done. no?

  3. Lehman regained a bit from their pre-market free-fall, but I see that they’re going back down the ‘ole hole. I think that it dawned on the market that replacing Callan and Gregory won’t change what they have on their balance sheet.

    Since they’re living in a world of make-believe, they might as well appoint Harry Potter as their new CFO. He might know an incantation that would reverse all the bad mojo in their financials.

  4. Hey the jokers at Morgan Stanley are strongly recommending buying their sh-t stocks in the banking sectot. What a surprise ! 🙂 And the sheep called investors are buying on cue like the empty heads they are. Retail sale are up 1% because of higher food and gas prices. What a bunch of morons. They see as a sign that things are looking up.

  5. And nobody sues these bastards at Lehman ?
    Will there be a class action suit against these s.o.b. ?

  6. By the way, these mobsters at Lehman are still lying. The balance sheet is full of nice nasty surprises. Who cares anyways ? All theses bastards are hiding and grossly understating the toxic waiste. Today. Operation “pump and dump” is in full swing.

    It always works with these morons called investors. Have you noticed ? Nobody talks a lot about what is going on with Key Corp or the other bad news. Retail spending is up ! Wow! It’s because of the nice government check in the mail.

    It’s real fun to see how these conniving scumbags proceed. Drip by drip. Hide and seek. Attack the shorts and never sue bastards like Lehman Brothers Callon. Always keep smiling, always say the same bullshit. They was a bastard from Morgan Stanley on Bloomberg pretending that 2/3 of the problems are settled. They will get away with that shit, these terrorists.

  7. retail sales are up 1%.. hmm.. its almost like Americans suddenly got free money in the mail.. like a rebate check or something.. but no, that couldn’t be the reason. :p

    Lehman stock is clawing its way back.. someone is calling in some favors.

  8. Goldman, Lehman, and JP MoChase = Enron, Worldcom, and Tyco. They have been cooking the books for 9 months, and the day of reckoning looms ever closer. Lets hope the million dollar a month fund managers have done some saving and investing outside thier own companies, or the Lear jet rides will become a distant memory.

    Michael….retail sales ARE probably up 1%….due to the fact that many are stocking up and most are shopping at the big boxers. I wouldn’t get too excited about an economy that is up 1% on Costco and Wal-Mart. Costco has to be way up on gas alone. There is as much as an hour wait for gas at the Costco in Manhattan Beach south of LA. The median home price there is over $1 mil, and people are waiting a half hour to save 15 cents a gallon? They are either going broke or they are foolish time managers. Let’s see the Nordstom numbers, I bet they aren’t selling too many $300 pairs of shoes this quarter.

  9. Goldman is not in as much trouble as the others. They have been well hedged, and own the more senior of the toxic Alt-A debt. These guys saw this coming a year and a half ago. Sure they will take a hit, but it won’t be a company killer.

  10. David, I agree with you 100% on the retail sales number (I was making light of the fact that the market rallied on higher sales at Costco and Wal-Mart, I guess it just didn’t come across as such.. 🙂

    Interesting comments about the Senior tranches of AAA debt – its trading at about $0.70 – $0.75 on the dollar right now, while more junior AAA is $0.50 – $0.65.. on AAA debt! (with bids like that, you’d think its cAAA rated)

    🙂

  11. The market rallied on inflation. This will be the shortest post I have ever made. Joannie McCullough pointed this out.

    May Retail Sales Expectations were +0.5% and +0.6%. Actual: +1.0% and +1.2% = HURRAY!!! NOT!

    Look inside the numbers:Gas Stations +13.8%; Non-Store Retailers (including heating oil deliveries) +10%; Food and Bev Stores +6.2%; Food Services & Drinking Places +5.1%.

    Above is all energy and food. Higher prices drove retail sales. This is far from good news for stocks as any thing I have ever seen.

  12. Sue them just for the fun of it. With the incredible number of lawyers in United States, I cannot believe that somebody is not thinking suing Lehman Brothers.

    The funniest stock rallye of the year. People are hoarding a lot of items before the price goes up further. Corn wil be real fun to see if the weather continues like that.

  13. Its funny Authier….I grew up in Illinois, and spent the weekend with my wife in a hospital after birthing twin daughters…all I saw on TV was the weather in the midwest and the Anheuser-Busch takeover (which I think is a rouse to set up a nationalistic marketing plan by A-B and DDB-Needham in time for the summer Olympics–don’t thinl A-B wants to sell, don’t think InBev could raise the jack if they did). I said to my wife, we should call our guy in Chicago and buy some corn futures, its going to be a lousy crop.

  14. And ethanol futures too. This ethanol idea was incredibly stupid. I am not surprised it was backed by politicians. In Brazil they do the same thing with sugar cane. It’s supposed to be more efficient. I don’t believe them. In both cases, corn and sugar cane are horribly fertilizer intensive. They impovrish the soil. It’s real messy. The price of fertiziler is going to the moon. Not a bad idea if you know what you are doing.

  15. Blackrock Group says they want to buy 20 to 30% of Lehman Brothers. I don’t beleive them. Pathalogical liars, psychopaths. You buy a couple of million shares of this shit, say a couple of nice words to scare off the shorts and stimulate interest. It’s real funny nice to see all the bunch of bankers recommending each others stock thes last days. They will never admit their losses. Never !

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