Lehman Burying ‘Assets’ Just Like Bear Stearns Did

Posted on July 3rd, 2008 in Daily Mortgage/Housing News - The Real Story

Hat-tip to Bloomberg’s Jonathan Weil for this wonderful expose’ on Lehman.

Last week I put out a post called A Bear Stearn’s Smoking Gun, the Cancelled EverQuest IPO. The title speaks for itself… I feel a Bear Stearns fund called Everquest owned by Bear Stearns could be a smoking gun that proves intent to defraud. Everquest is where they were dumping toxic subprime paper as the market was collapsing. But that’s not so bad. What is bad is they were planning to IPO Everquest to unsuspecting investors. The IPO was abruptly cancelled when the Ralph Cioffi-led hedge funds collapsed last year. That proves premeditation in my opinion.

So, what did Lehman do last month in a fit of desperation? You guessed it…the same thing. Weil writes:

“So what does Lehman do? It sells billions of dollars of assets to a newly formed hedge fund that:

1) counts Lehman as a significant investor;

2) is run by seven recently departed Lehman executives;

3) is operating out of Lehman’s office space, three floors down from the office of Lehman’s corporate secretary.

You don’t need to know much more about Lehman’s transactions with the fund, R3 Capital Partners, to see the problem.”

This is a great story you can’t miss. -Best, Mr Mortgage

Source: Bloomberg http://www.bloomberg.com/apps/news?pid=20601110&sid=aYbKSTZ5ZYpM


16 Responses to “Lehman Burying ‘Assets’ Just Like Bear Stearns Did”

  1. Ah the hell with it ! I will be buying some more physical gold and silver monday morning. I am so tired. But what could you expect ?

    The system has generated as of today, worldwide, about 10 trillion dollars of losses. These outfits could not stay in business. Lehman cannot stand the truth. “Too big to fail institutions should be allowed to fail.” Henry Paulson, that funny bugger from Golman Sachs and Washington.

    Any other firms playing the Bear Stearns games ?

    Hey Lehman Brothers is up today and the management promised bonuses to the employees for their “good” work.

  2. Its kind of sad and ironic that Lehman employees are getting stock as a bonus – as they are going to get screwed just like everyone else. Great post M.. thanks for the heads up – looks like I will be buying more SKF on Monday..


  3. Well the stock as bonus is a kind of funny money like the Euro, like the Canadian dollar ou like the US dollar. Funny money. If things go right and they can find new bubbles to blow, everything will be just fine. 🙂 Just kidding. Yes it’s sad.

  4. That is HOLY S**T Material!!!!

  5. Yeah, very nice….
    and yesterday, when I heard that Lehman was “giving” stock to “retain talent”, and now mid-year bonuses (today)…why would anyone want that???? Personally, i’d rather stick a sharp pencil in my eye….about 100 times.

  6. This is Feng, just arrived in LV, still a crowded place brings me some hopes regarding US economic future…

    Wish you, Mr. M and all the rest of the board, a wonderfull 4th of July of 2008…

  7. FENG!! What are you doing in LV? My favorite city and a great foreclosure topic. Go check out the City Center that MGM owns. I am still short. I am trying to get a handle on what is left for sale. I think this one takes them down.

  8. Who MGM ? And there is this wonderful investment in Ford by Kirk Kirkorian. He likes to lose money recently. Even the billionnaires don’t get it !

  9. Hey, thanks, Feng,

    that’s awful nice of ya, happy 4th to you too, and a safe trip back east when you are ready…. 🙂

  10. City Center is indeed a bust.. I was there last October and the thing was HUGE. the est’d 4 bill budget is now a spent $9 bill – all at the peak.. you are absolutely right M.. its taking down MGM (although I heard half is owned by a Saudi Prince?) – either way.. its a massive write down..

    Happy 4th to everyone.

  11. woops, it is a shame for me to sell SKF @152.5

  12. We will have to see if this gets any legs in the press.
    I really, really hope so.
    Of course, any authority who tries to push this may very well get what Gov. Spitzer got.

  13. “Get what Spitzer got”

    What’s that.. a hottie little girlfriend on the side?



  14. I agree, that story on Lehman was great reporting!

  15. Dubai invested BILLIONs about 6-9 months ago in MGM at $84. I thought they were nuts. The MGM pumpers were saying ‘you are not smarter than sovereign wealth with trillions to spend’. Yes, I am.

  16. People are soo dumb. They think that big is intelligent. Most sovereign funds, specially in the Middle-East, are runned by a cousin or a concubine of the king, or some clown of that type. Most of them have no brains just a lot of money from oil and good royal connections. It’s true. Saudi Arabia has 10,000 princes and they suck away 50% of the money to themselves. Lucky you and lucky us that they are in power.

    The middle-east countries specially these countries, have a founded reputation for being runned by particularly stupid and corrupt people. To much damn oil does that to you. Same thing in Russia. The place is still a mess even if oil is at 145$. Same thing in Angola, in Venezuela. There is a malediction with oil. It makes people real dumb.

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