Lehman Brothers Financial SA (LEHNQ)

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"Lehman and its creditors argued that the 2008 agreement — which it said was "forced" upon it — allowed JPMorgan to apply the $8.6 billion in collateral to its affiliates, subsidiaries and successors, but that customers do not qualify as any of those."

You missed the point of the "FUNDING". Lehman sent the 8 Billion as collateral upon JPM request to post it. Its purpose was a contract to fund something whatever it may have been. If the funding closed. then the deal is done. But that also means if the deal sours later let’s say. Hypothetically speaking that means you get some of the collateral back by means of a foreclosure sale. So at a base... sense we don't know how much was actually funded. We use 8 Billion sense we know that’s the known portion. So 8 Billion is twenty percent of something...Why? We know banks do not loan 100 Percent of anything. We say then that they funded 80 percent of this investment loan. That leaves 20 percent. Now the collateral may have a built in value of whatever was being funded. So 80000 loan less the value 100000 is the 20000 collateral. (Book entry) or posted real Cash. But it used to make the loan. It does not belong to the bank. What is JPM is the interest on the Loan and loan amount. So at 8 Billion the base loan is 40 Billion at a minimum.
IMHO.

We haven’t even started on the "REPO 105 " The buy back next day function of "Lehman’s little Programmed book"

The only questions in my mind is. Was the funding closed? Yes
Was there a failure to make the payments or where their arrangements being made to CURE the failed payments? Yes/No
If not.
Where was the foreclosure sale? And was foreclosure sale assets sold at less than principle(original) amount. This is the only place where JPM could have gained control of the 8 Billion.
After a foreclosure sale. And yes we get our collateral - cash back if the Foreclosure sale was more than the principle amount.
IMHO

See the POINT ***** BUY BACK ****** In order to "BUY BACK SOMETHING"
You have the funds laying around to buy back with.

Love this Coup. Happening in real time. Have a cup.. Taste great.