Replies to post #110734 on Lehman Brothers Financial SA (LEHNQ)

[ron_66271]

Real777. I Shared This Post on COOP and FNMA.

If the CDS insurers paid for the ABS(MBS, RMBS, REITs, and other) losses as required by the derivative contracts.

Then WMI/WMB, Lehman’s, and F&F would all be completely solvent.

Few understand that the Credit Crisis of 2008 was that the derivative insurance contract writer’s couldn’t cover as an unregulated insurance company.

For the Mortgage market Securitized Trusts created by the likes of WMB, the banks exposure went to zero because the derivatives covered the losses.

The Derivative Market of 2008 was $83 Trillion of which JPM wrote 57% of the total contracts.

Housing; $13 Trillion (source: US Treasury).
Now most of the mortgages where in notes.

By example;
JPM’s posable exposure to the insured mortgage market loss of 10%;
$13,000B x 10% x 57% = $741 Billion.

JPM was already underwater.
TEIR 1 of only 3.5 according to JPM’s own 2008 10K. WMB was 7.8 from the same filing.

I mostly post the COOP MB.



Ron