Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Lehman Post Mortem, Did Bernanke and Paulson Blackmail Congress?
Politics / Credit Crisis Bailouts
Sep 15, 2009 - 11:08 AM
By: Mike_Whitney
"Lehman's fate was sealed not in the boardroom of that gaudy Manhattan headquarters. It was sealed downtown, in the gloomy gray building of the New York Federal Reserve, the Wall Street branch of the U.S. central bank." Stephen Foley, U.K. Independent
Stephen Foley is on to something. Lehman Bros. didn't die of natural causes; it was drawn-and-quartered by high-ranking officials at the US Treasury and the Federal Reserve. Most of the rubbish presently appearing in the media, ignores this glaring fact. Lehman was a planned demolition (most likely) concocted by ex-Goldman Sachs CEO Henry Paulson, who wanted to create a financial 9-11 to scare Congress into complying with his demands for $700 billion in emergency funding (TARP) for underwater US banking behemoths. The whole incident wreaks of conflict of interest, corruption, and blackmail.
The media has played a critical role in peddling the official "Who could have known what would happen" version of events. It's all part of cynical cover-up. Bernanke and Paulson were fully-aware that they playing with fire, but they chose to proceed anyway, using the mushrooming crisis to achieve their own narrow objectives. When things began to spin out of control--credit markets froze, interbank lending slowed to a crawl, and stock markets plunged--the Fed and Treasury persisted anyway, demanding their $700 billion pound of flesh before they'd do what was needed to stop the bleeding. It was all avoidable.
Lehman had potential buyers, including Barclays, who probably would have made the purchase if Bernanke and Paulson had merely provided guarantees for some of their trading positions. Instead, Treasury and the Fed balked, thrusting the knife deeper into Lehman's ribs. They claimed they didn't have legal authority for such guarantees. Its a lie. The Fed has provided $12.8 trillion in loans and other commitments to keep the financial system operating without congressional approval or any explicit authorization under the terms of its charter. The Fed never considered the limits of its "legal authority" when it bailed-out AIG or organized the acquisition of Bear Stearns by JP Morgan pushing $30 billion in future liabilities onto the public's balance sheet. The Fed's excuses don't square with the facts.
The rest of the story...
http://www.marketoracle.co.uk/Article13487.html
Coach T
NOW THE LBI SIPA TRUSTEE IS GETTING WARMED UP! Check out the LBI Docket #1682...This is separate from the one filed by LBHI I believe.
http://chapter11.epiqsystems.com/docket/docketlist.aspx?pk=978bd245-11be-4d4b-83db-d6a3283b2962
It is going to be a great Christmas.
Keep the Faith!
Coach T
NOW THE LBI SIPA TRUSTEE IS GETTING WARMED UP! Check out the LBI Docket #1682...This is separate from the one filed by LBHI I believe.
http://chapter11.epiqsystems.com/docket/docketlist.aspx?pk=978bd245-11be-4d4b-83db-d6a3283b2962
It is going to be a great Christmas.
Keep the Faith!
Coach T
ANOTHER VICTORY IN COURT...the ADR procedure for settlement of Derivatives.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ano3iNiHMJNY
A&M is having it's way in Court because of sound strategy and well thought out presentations.
Enjoy the Ride...
Coach T
LBHI is requesting the Court Modify the Sale to Barclay's for about 10B+ so far...
I love it. There is going to be another movie!
Coach T
You might want to check out the LBHI court dockets. Specifically Docket #5148-5156. I was kind of wondering what surprise A&M might have for today.
LBHI is filing a massive litigation against Barclay's for a modification of the "Sale".
This action has five different dockets of VOLUMES of evidence. I have not had chance to read it yet but the first docket #5148 has the summary.
Go get 'em baby!
Coach T
UK housing market reverses UP!
http://www.marketwatch.com/story/after-two-years-uk-housing-survey-positive-2009-09-14
Enjoy the Ride...a little more fuel for the fire.
Coach
UK housing market reverses UP!
http://www.marketwatch.com/story/after-two-years-uk-housing-survey-positive-2009-09-14
Enjoy the Ride...a little more fuel for the fire.
Coach T
It is typical BULLISH action.
If you were trying to accumulate a large position. Why not buy 50K and then put in an order to sell 200 at the bid. Unless the public at large were watching as we are, no one would pick up that the stock is being accumulated.
Once again we are passing the period where anyone in the stock that has NOT sold is not going to sell for cheap!
My guess is this will run until Jan-Feb of next year.
Enjoy the Ride...News Pending Soon...IMO.
Coach T
Great News!
We are getting closer to unraveling the mystery of the derivatives value. Lehman has finally found a company called Numerix to value the positions.
http://www.reuters.com/article/pressRelease/idUS112634+14-Sep-2009+BW20090914
Coach T
How about this strategy...
Why wouldn't a long-term investment be buying the Preferred J's and sell the Common against the position? You would take in $.14+ and get to buy twice as many J's.
You would have NO money in the trade and would be paid $25.00 before common got anything.
The Pro's will be here soon...IMO.
Coach T
PUBLIC STAKEHOLDERS!
I found this statement in LBHI Docket #5122, page 3 from the Ad Hoc Group of Lehman Brothers Creditors. It is the first time I have heard the term "public stakeholders" mentioned in a long time. Especially from this group. Last month they were trying to kick out Marsal & Co. because they wanted to liquidate LEHMAN faster. Sounds like they are changing their tune.
"Based on the foregoing, the Group supports approval of the Motions. The Group believes it is important to enable the Debtors to, among other things, (i) efficiently foreclose on
defaulting Real Estate Loans and realize the economic value of the related Foreclosure Properties and (ii) efficiently compromise and settle claims with respect to the Real Estate Loans. In addition, with appropriate public disclosures, the Group believes that public stakeholders (and this Court) will be better positioned to monitor the Debtors’ progress in these cases."
Enjoy,
Coach T
Wilmington Trust just filed a claim for 48B+ on the under the claims section.
FYI
Coach T
Mic:
For some reason it takes me longer to read your emails???
Coach T
I really don't know how to answer that question. The ultimate conservative position would be to file a claim. I am not going to give advise because I truly am not certain myself...
Coach T
What if you are an institution that purchased the J's in the week before the Filing date. You would want to maximize the short term loss against other gains in the portfolio.
Your example is for an individual taking a loss against personal income.
Coach T
It will be interesting to see if the sellers since the high volume "break out" thru $.04-$.05 will dry up after the anniversary date when we get past the short-term capital loss period which ends on 09/13/09.
Thoughts?
Coach T
Looks like the weak hands are getting flushed in the commons today. 12M shares already.
For the J's. the 15 MIN, HOURLY charts are back inline and the daily looks like it has started to get back in line for the move next week or tomorrow. If you can apply logic to a Q chart?
Feels right! IMO.
Enjoy,
Coach T
Did anyone else notice the mark down from 09/14/08 to 12/31/08 of $63B in the "Investments in Affiliates" category on the Balance Sheet.
I spoke with Holly Dice last Friday about the difference in the two figures and whether it had been taken by A&M as a writedown or a mark down. She said, "they have not written it off yet".
She said that if the "Affiliates" showed a negative they marked the asset down. If even half of that mark down has come back with other assets the A/L would be even or better. IMO.
Coach T
Please correct my difference between Assets and Liabilities to read $30B...
What can I say I was on a roll...
Coach T
THIS IS THE LAST WEEK TO LOCK IN SHORT-TERM CAPITAL LOSS ON LEHMANS! (I posted this on Yahoo boards)
Next week the charts will start to look different on our little speculative LEH play. Anyone that bought in the week prior to Chapter 11 Filing between $15 and $3.50 will have to suffer a Long-term Capital Loss unless they sell this week.
Once we get into next week why would anyone sell? For MY MONEY...at this point, my 2.9M shares of Preferreds and Trust shares will ride it out to the end. The bad news is out, and no one believes that all of the factors that caused the write downs will unravel the assets to the upside.
I am all in. No one gets my shares until next year! I want to see how it plays out. IMO...the market will eventually sympathize with LEH and how it all went DOWN.
I don't care what happens in the short term share price fluctuations.
HERE IS THE DEAL...per the A/L Balance Sheet in the most recent MOR...Assets are $295B and Liabilities are $324B, or less than 430B.
Add in the total face amount of Preferred Stock $11B and you are $41B away from Preferreds getting face value of $25-$50 before common will get paid.
Marsal marked down (not wrote off) $63B of "Investments in Affliates" between 09/14/08 and 12/31/08. I have heard no one discuss that. Get your facts.
Do your pumping your bashing...whatever. It makes no difference to those of us that do our due diligence.
Don't risk what you cannot afford to lose!
Most of all...Enjoy the Ride!
Coach T
Great article Dnoto!
Three things stood out...
"The $3.5 billion in cash that the firm had a year ago, rose above $12 billion by the end of June and Lehman's loan portfolio has seen "improved market value", according to Alvarez & Marsal."
"The value of Lehman claims has actually soared in recent months, according to SecondMarket, which operates an exchange for creditors of bankrupt companies to trade their claims. When Lehman's holding company first filed for bankruptcy its claims traded below 10 cents on the dollar, but now they are trading closer to 20 cents on the dollar."
"Claims in Lehman Brothers Special Financing, which holds many of the Lehman derivatives, and Lehman Brothers Commodity Services, which holds many of Lehman's commodity trades, took off in April and are now trading for about 40 cents on the dollar, according to SecondMarket."
"But for Lehman, and its former employees, the more interesting question may still be whether they can ultimately find anyone responsible for the bank's collapse."
Gettin' better every day!
Coach T
Thanks for the heads up, cyb...09/15/09
Coach T
Holly is a sweetie...
All of the A&M staff are top notch IMO.
I think the next news to be released will be sympathetic to LEHMAN and how it all came down. The ground swell of public opinion has been against LEHMAN since they filed.
As more news comes out about how the end for Lehman came down, my thinking is the public opinion will shift to favor LEHMAN. I think we will see that the SEC was sleeping with respect to the naked short selling...Citi, B of A, and most of all JPM and the Fed ended up with the excess liquidity that was drained to cover the derivatives that were on the books.
This is what caused the panic and reactions that got us all to this point today.
Keep the Faith!
Coach T
There is actually an even more important precedent that will be decided before then...
On 09/15/08 the court is going to try and make a decision on an adversary proceeding that is worth about 600M to LBHI and LBSF. LBSF is holding a hedge against approximately 1.2B worth of real estate mortgages of various credit grades.
LIBRA CDO is our adversary along with Society Generale. LBSF bought an insurance policy against the mortgages going bad and the dipute is whether the LBHI/LBSF BK caused default or the reduction in value of the mortgages below 90% in value caused default in FAVOR of LBHI/LBSF.
You can read about it in the court hearing transcripts dated 08/26/08 on the www.lehmancreditors.com under "Significant Events in Case" and then click on Significant Events in Chapter 11 Cases".
Grab a cocktail of your favorite flavor and enjoy the read. You will get a kick out of Judge Peck.
Enjoy,
Coach T
Has anyone noticed the Trustee from the SIPA lately? He has been disallowing more and more claims that were submitted prior to the LBI Bar Date of July 1, 2009. Some claims are kicked out completely and others are referred to LBHI's BK.
FYI
Coach T
Do you have a copy of the email from A&M?
I am not aware of any additional A/L info from 12/31/08. They are supposed to provide 1st Qtr and 2nd Qtr. updates...but to my knowledge there is no timetable.
Any news you have would be welcome.
Thanks,
Coach T
Thanks Brikk...I thought that was what you were seeing.
Coach T
I have spent this morning reading the Aug 26 court transcripts that get post on teh creditors committee website www.lehmancreditors.com
A couple of things stand out that have not been in the media. An investor can gain alot of insight by reading what was said and how the message was delivered IMO.
For example, Judge Peck has urged all parties to come together to hammer out a resolution for settling the derivatives pricing and potential conflicts on the 900,000 contracts.
He gave all parties more time to settle conflicts until Sep. 15. However, most importantly he took Lehman's side and told everyone that there will be a protocol for derivative pricing and resolution. If the parties cannot agree then it will come down pretty much as proposed by Lehman!
More to come...
Coach T
Not sure Cisco. This is the last week to lock in short term capital losses on all Lehman securities purchased before the 09/14/08 Chap 11 filing. Should be an interesting week.
Each day and week seems to uncover more clues...
Keep the Faith!
Coach T
brikk
What is it about the trading today you like?
Coach T
Home prices for thru August 25 up 7.3% nationwide according to Clear Capital!
Plug that in and see what it does to your balance sheet...and public is wondering why all the volume lately.
The perfect unraveling UP, to last year's perfect storm.
http://www.clearcapital.com/company/MarketReport.cfm?month=September&year=2009
Keep the Faith. The winds are solidly at our back now.
Coach T
Home prices for thru August 25 up 7.3% nationwide according to Clear Capital!
Plug that in and see what it does to your balance sheet...and public is wondering why all the volume lately.
The perfect unraveling UP, to last year's perfect storm.
http://www.clearcapital.com/company/MarketReport.cfm?month=September&year=2009
Keep the Faith. The winds are solidly at our back now.
Coach T
Home prices for thru August 25 up 7.3% nationwide according to Clear Capital!
Plug that in and see what it does to your balance sheet...and public is wondering why all the volume lately.
The perfect unraveling UP, to last year's perfect storm.
http://www.clearcapital.com/company/MarketReport.cfm?month=September&year=2009
Keep the Faith. The winds are solidly at our back now.
Coach T
Home prices for thru August 25 up 7.3% nationwide according to Clear Capital!
Plug that in and see what it does to your balance sheet...and public is wondering why all the volume lately.
The perfect unraveling UP, to last year's perfect storm.
http://www.clearcapital.com/company/MarketReport.cfm?month=September&year=2009
Keep the Faith. The winds are solidly at our back now.
Coach T
Great article from The London Times with LBIE Administrator Tony Lomas!
Although it sounds like it will still take a long time to unwind, Mr. Lomas gives the "feel" there are a lot of assets to unwind...let me know your thoughts.
Here is a cut out from the article.
"PwC, says Lomas, “has just settled with a big investment bank [he won't identify the bank] which was a counter-party of Lehman, for it to pay more than $500 million (£307.9 million). That's half a billion from one party. Their team and ours had to look at 10,000 line items. That's 10,000 sets of calculations and valuations that took months to do. The other bank still operates — it's got the infrastructure, the staff. It knows where to find things. We're not in the same position — we don't have that advantage.”
"There were thousands of such counterparties and millions of transactions — at the moment the plug was pulled, Lehman in London was involved in 2.5 million trades, in derivatives and other financial instruments, that were simply frozen. They all have to be unwound and appraised."
"Often, says Lomas, PwC's progress is hindered by the other side not being specific as to which part of the Lehman empire it was dealing with. Incredibly, despite a year having passed, some investment banks are still unable to reconcile their books so that they can make a claim. And until they do, nothing can begin to be resolved. “One counterparty owes Lehman more than $1 billion but they're not at the stage where they've reconciled any possible claim against us,” says Lomas, shrugging at the madness of it all."
http://www.thisislondon.co.uk/standard-business/article-23739120-details/The+Lehman+undertaker+who+takes+a+real+delight+in+his+work/article.do
Enjoy,
Coach T
Great article from The London Times with LBIE Administrator Tony Lomas!
Although it sounds like it will still take a long time to unwind, Mr. Lomas gives the "feel" there are a lot of assets to unwind...let me know your thoughts.
Here is a cut out from the article.
"PwC, says Lomas, “has just settled with a big investment bank [he won't identify the bank] which was a counter-party of Lehman, for it to pay more than $500 million (£307.9 million). That's half a billion from one party. Their team and ours had to look at 10,000 line items. That's 10,000 sets of calculations and valuations that took months to do. The other bank still operates — it's got the infrastructure, the staff. It knows where to find things. We're not in the same position — we don't have that advantage.”
"There were thousands of such counterparties and millions of transactions — at the moment the plug was pulled, Lehman in London was involved in 2.5 million trades, in derivatives and other financial instruments, that were simply frozen. They all have to be unwound and appraised."
"Often, says Lomas, PwC's progress is hindered by the other side not being specific as to which part of the Lehman empire it was dealing with. Incredibly, despite a year having passed, some investment banks are still unable to reconcile their books so that they can make a claim. And until they do, nothing can begin to be resolved. “One counterparty owes Lehman more than $1 billion but they're not at the stage where they've reconciled any possible claim against us,” says Lomas, shrugging at the madness of it all."
http://www.thisislondon.co.uk/standard-business/article-23739120-details/The+Lehman+undertaker+who+takes+a+real+delight+in+his+work/article.do
Enjoy,
Coach T
Great article from The London Times with LBIE Administrator Tony Lomas!
Although it sounds like it will still take a long time to unwind, Mr. Lomas gives the "feel" there are a lot of assets to unwind...let me know your thoughts.
Here is a cut out from the article.
"PwC, says Lomas, “has just settled with a big investment bank [he won't identify the bank] which was a counter-party of Lehman, for it to pay more than $500 million (£307.9 million). That's half a billion from one party. Their team and ours had to look at 10,000 line items. That's 10,000 sets of calculations and valuations that took months to do. The other bank still operates — it's got the infrastructure, the staff. It knows where to find things. We're not in the same position — we don't have that advantage.”
"There were thousands of such counterparties and millions of transactions — at the moment the plug was pulled, Lehman in London was involved in 2.5 million trades, in derivatives and other financial instruments, that were simply frozen. They all have to be unwound and appraised."
"Often, says Lomas, PwC's progress is hindered by the other side not being specific as to which part of the Lehman empire it was dealing with. Incredibly, despite a year having passed, some investment banks are still unable to reconcile their books so that they can make a claim. And until they do, nothing can begin to be resolved. “One counterparty owes Lehman more than $1 billion but they're not at the stage where they've reconciled any possible claim against us,” says Lomas, shrugging at the madness of it all."
http://www.thisislondon.co.uk/standard-business/article-23739120-details/The+Lehman+undertaker+who+takes+a+real+delight+in+his+work/article.do
Enjoy,
Coach T
Nice job Dnoto! You beat me to the post. I was just getting ready to spread the word on the Dealscape article.
It is all falling into place. Before everyone thought that all the assets went up in smoke. Now they are starting to see the fire smoldering.
Keep spreading the word...Keep the Faith...
Coach T
Nice day for the F, G, and the D is holding its own. If this is consolidation after the breakout...I like it!
Coach T