Lehman Preferred Series "J" Preferred (fka LEHJQ)

[coach tequila]

DERIVATIVES/SWAPS THEORY...Here goes.

LEHMAN just got its structure set for dispute resolution on derivative positions swaps, etc. So now there is a court ordered system in place that was designed pretty much by Lehman.

The court dockets have revealed something to me recently. Lehman has received a great deal of terminations from counterparties as of the filing date.

However, unless certain information was provided in a traditional manner the court has not been allowing the termination!

What if the new ADR (dispute resolution) makes the counterparties that did not terminate properly (which was many of them according to court docs) renegotiate at today's prevailing prices?

We know the CDO's, etc. have improved in price substantially! Maybe we are seeing the market starting to digest the fact that all of the collateral which was "netted" out at September/October 2008 prices and "netted" improperly has to be recalculated under the new ADR procedures at today's prices!

That would add about 15-20% IMO to the collateral barrel!

Closing the gap beween Assets and Liabilities to the plus side.

Thoughts???

Coach T