Replies to post #82757 on Lehman Brothers Financial SA (LEHNQ)

[Joe Stocks]

>>"yes wayne lbhi is holding 20 bill in Claims and there is a reason. "<<

You borrow $1000 dollars from me and give me an IOU (claim) in exchange.

You buy that IOU (claim) back from me for $1000. How much is that IOU now worth?

When LBHI buys a claim the claim is cancelled. They are buying back debt. Debt that they incurred when they borrowed in the past. When they buy back debt they actually have less than they had before because that cash is gone and they are left holding a claim against themselves.

Try it. Go write out an IOU to yourself. Then go look to see if your bank account increases.

Can of like when a company buys back shares. Each outstanding share is then worth more as those shares bought back are cancelled.

[wayne49]

Both Lehman and fnf were all illiquate and not insolvent in reality. That is true