Monthly Archives: September 2008

Lehman: The Media Meltdown

What’s happened to Reuters? The sober just-the-facts newswire seems to have let the chaos at Lehman brothers go to its head. This morning Reuters ran an entire story sourced on nothing but a rumor (which turned out to be false) … Continue reading

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When Can We Start Breathing Again?

The Bank of America deal to buy Merrill Lynch is the first bit of unambiguously good news we’ve received all weekend. Of the four big independent investment banks, Lehman is toast; Morgan Stanley and Goldman Sachs are safe; and Merrill … Continue reading

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Lehman: All Fuld’s Fault

John Gapper has the first best Lehman post-mortem: Fuld never changed, not really. He was still the same dark, obstinate Lehman loyalist that he had always been – a man who never wanted his firm to be sold. And, in … Continue reading

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Lehman: The End Game

As markets start to open in Asia, there’s still no real clarity on what on earth is going on with Lehman Brothers. But the base-case scenario at this point is bankruptcy: ISDA’s been netting derivatives transactions for four hours of … Continue reading

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Lehman: Is Bankruptcy an Option?

Henry Blodget says that Lehman declaring bankruptcy would be a "sensible solution" to its current predicament: A bankruptcy filing would put the company in the hands of a court appointed liquidator, which would take years to sell off everything. This … Continue reading

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Ben Stein Watch: September 14, 2008

Ben Stein this week has decided to tell us that it’s easy to overestimate (a) the amount of harm that government does, and (b) the amount of good that government can do. Being Ben Stein, of course, he’s a little … Continue reading

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David Foster Wallace is dead

and even the Gawker commenters are snark-free. A truly great loss, and a very sad day.

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Extra Credit, Friday Edition

Should BofA Wait for a Bigger Prize? Merrill could be a better fit with BofA than Lehman. Did I say "in"? I meant "de": "The core inflation guys (that includes me) were right: now that commodity prices are receding, it … Continue reading

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Arab Property Datapoint of the Day

John Gapper tells us today that there’s "No property crash so far in Abu Dhabi". Which I daresay is true. But next door, in Dubai, a single recent foreclosure was on property worth $3.5 billion — and, to make matters … Continue reading

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AIG: The Mark-to-Lehman Market

Ooh now this is ugly. AIG shares are down 26% today to their lowest level in over 15 years; the firm’s credit default swaps are wider than Lehman’s. AIG was never known as much of a mortgage shop, but it’s … Continue reading

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Photo of the Day

Taken outside Lehman headquarters this morning:

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Debating the Lehman Collapse

There’s a lot of sympathy for Lehman Brothers today — a lot more sympathy than there ever was for Bear Stearns. Dick Fuld might not be the friendliest chap on Wall Street, but his shop is well-liked and well respected: … Continue reading

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Index Funds Aren’t Speculators

One of the first rules of headline writing is that you shouldn’t go with anything which just sounds stupid. Like, say, this: Speculative Bets by Index Funds Didn’t Push Oil Prices Up, Report Says Of course, the whole point of … Continue reading

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New Yorkers 1, Wall Street 0

Andrew Bary reports on the status of the $5.4 billion purchase of Stuyvesant Town in New York: Rental income at Stuyvesant Town/Peter Cooper Village last year fell to $108 million from $112 million in 2006, owing in part to slower-than-anticipated … Continue reading

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Extra Credit, Thursday Edition

Quote of the Day: Cristina Kirchner takes understandable pleasure in Lehman’s misfortunes. Counting the Cash for Lehman’s Chief: "Between 1993 and 2007, Mr. Fuld took home about $466 million in compensation, including base salary, bonuses, long-term incentive plan payouts and … Continue reading

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Could GE Buy Lehman?

"Banker 700" leaves an intriguing comment on my last post: GE will end up buying Lehman. They actually want LEH. They fit well together. You heard it here first. As Alea points out, it’s not all that crazy. GE has … Continue reading

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Could Lehman’s Failure Cause a Systemic Meltdown?

What are the risks of a systemic crash if Lehman Brothers is allowed to fail? As Sudeep Reddy says, Lehman is just as big and interconnected as Bear Stearns was: Mr. Bernanke, testifying before Congress in July, outlined his three … Continue reading

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Lehman: Nobody Knows Anything

Do you want to know what on earth is going on with Lehman Brothers, and with the whole financial sector more generally? Here’s some advice: go outside. Take a walk. Get some fresh air. Because nobody knows anything. Today could … Continue reading

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Desperate Measure of the Day, Silverjet Edition

Tracy Alloway reports on how Lawrence Hunt, the CEO of Silverjet, paid for fuel expenses in the airline’s final weeks: Hunt’s solution was to put fuel expenses on his personal credit card while the company waited for its next round … Continue reading

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Another Econoblog Ranking

This is linkbait of the highest order: yet another ranking of econoblogs. But to celebrate my 3,000th blog entry (it’s actually up to 3,011 now) I’ll pat myself on the back by linking to it anyway. I’m astonished to find … Continue reading

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Larry Summers, Politician

Lloyd Grove has a long interview with Larry Summers today. The political bit is the most interesting: Summers all but says he’d love to return as Treasury secretary ("I’m very happy right now doing what I’m doing, teaching and consulting … Continue reading

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The Upside of a Lehman Crash

Is "Lehman Crashing Again", in the words of Alea’s headline? The Lehman stock price reminds me of Zeno’s arrow: first it falls by half, and then by half again, and then by half again — and each time it’s "crashing". … Continue reading

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Why Treasury Shielded Frannie’s Sub Debt

Yet another peculiarity of the credit crunch: the WSJ editorial page seems to be in full agreement with Nouriel Roubini. The subject: Frannie’s sub debt, which was shielded from any haircut by Hank Paulson’s bailout. In structuring his rescue, Treasury … Continue reading

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Trusting Uncle Sam

Arnold Kling has a cute response to my blog entry on the Social Security trust fund: A trust fund = an obligation to borrow? If your uncle Louie told you he was setting up a trust fund for you, and … Continue reading

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Extra Credit, Wednesday Edition

Meet the real Freddie Mac and Fannie Mae: Or Freddie Mackie and Fannie May, anyway. They’re not enjoying the housing crunch. Ben Stein Joins Newsmax Magazine: "Ben loves Newsmax magazine… He joins a stable of Newsmax writers and columnists who … Continue reading

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