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		<title>Lehman stock, rumors and anti-rumors that support the rumors</title>
		<description>Discuss Lehman stock, rumors and anti-rumors that support the rumors</description>
		<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors</link>
		<lastBuildDate>Thu, 20 Jun 2013 03:14:15 +0000</lastBuildDate>
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			<title>Reggie Middleton says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8791</link>
			<description><![CDATA[It's as if the market is hearing a totally different hearing that I am. The Fed and the SEC are attempting to be elusive while several senators are pressing for more answers, transparency and information. This is information that the Fed's do not wish to reveal, ex. who were the counterparties at risk to BSCs failure, what is the composition of the collateral that the tax payers are on the hook for, how was the price derived for BSC's share price, etc. This is not a reason for I banks to be rallying, yet they are.]]></description>
			<dc:creator>Reggie Middleton</dc:creator>
			<pubDate>Thu, 03 Apr 2008 18:21:25 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8791</guid>
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			<title>Reggie Middleton says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8790</link>
			<description><![CDATA[that market rumors led them and the Fed to address the Bear Stearns issue. They also said that they are not confident the Fed window would have helped Bear Stearns given the strength of the run on the bank. Now, this isn't very assuring. Taking the following chart into consideration from The Financial Ninja (http://bp0.blogger.com/_FiNhXIv5StE/R_P0DpTdeGI/AAAAAAAABRo/f1UVpxeIgr0/s1600-h/BORROW.png), exactly how safe are the other banks that have been hitting the Fed window so hard. After all, it appears that the window is being bled dry. http://bp3.blogger.com/_FiNhXIv5StE/R_P0GZTdeHI/AAAAAAAABRw/PKJfGp4oU4c/s1600-h/BOGNONBR.png http://bp0.blogger.com/_FiNhXIv5StE/R_P0DpTdeGI/AAAAAAAABRo/f1UVpxeIgr0/s1600-h/BORROW.png]]></description>
			<dc:creator>Reggie Middleton</dc:creator>
			<pubDate>Thu, 03 Apr 2008 16:31:45 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8790</guid>
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			<title>Justin B says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8789</link>
			<description><![CDATA[but this site has been surprisingly accurate on a lot of this stuff. http://urumor.com/story/lehman-going-to-be-extinct-monday]]></description>
			<dc:creator>Justin B</dc:creator>
			<pubDate>Sun, 30 Mar 2008 19:31:12 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8789</guid>
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			<title>Wade Nelson says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8799</link>
			<description><![CDATA[Rumors????. I prefer to make investment decisions based on facts, whether buying or selling. The financial stocks are down because of huge losses due to factors that we all know about. If commercial and residential conditions continue to deteriorate those losses will accelerate depending on the "quaility" of their RE loan portfolio. If the IB's want to quell the rumors, open your books, show everyone the quality of your loan pools, counterparty risks etc. ie. total transparency. Blaming rumor-mongers and short-sellers for their problems is pretty "interesting" stuff. On a more serious note. I find it unconscionable that anyone or any organization could recommend buying these stocks without that sort of transparency. If it was in the IB's best interest to be transparent, they would be. Or,should we just take them at their word that "everything is A-OK and right on schedule."]]></description>
			<dc:creator>Wade Nelson</dc:creator>
			<pubDate>Sat, 29 Mar 2008 04:57:51 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8799</guid>
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			<title>Bill Laird says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8800</link>
			<description><![CDATA[I sold my LEH options for a quick double. Absolute gift when that POS overshot after the last "run on the bank". Don't forget - these guys are playing with a stacked deck. They got a Fed that spends like a drunken sailor, have completely loose requirements on mark to market (witness level III toxic waste not dropping), and an election year government falling all over themselves to bail these guys out with public money. The SEC should be focusing on blatent insider trading - like when you see hundreds of thousands of options sell before news is announced, and "unusual" trading activity before news is announced. To focus on a short seller "rumor" is ludicrous, and an embarassment for the SEC quite frankly.]]></description>
			<dc:creator>Bill Laird</dc:creator>
			<pubDate>Sat, 29 Mar 2008 02:50:23 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8800</guid>
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			<title>Nathaniel C says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8802</link>
			<description><![CDATA[We all know that Lehman is in a lot of trouble and could be the next investment bank to go bust, but I just cannot bring myself to buy the puts which already have an implied volatility of over 145%. The only way these puts would be worth anything is if Lehman collapses (always a possibility). I am staying away from shorting the investment banks after the FED bailed aout BSC. They might all be insolvent but they can now borrow directly from the FED, even if their collateral is close to worthless. I am looking at the banks as a good place to short or buy puts. Commercial REITS are also looking good. Wachovia looks good along with Fifth Third.]]></description>
			<dc:creator>Nathaniel C</dc:creator>
			<pubDate>Fri, 28 Mar 2008 23:41:59 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8802</guid>
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			<title>Reggie M says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8801</link>
			<description><![CDATA[I can guarantee you that if we get that we will see single digit, major bank prices and bankruptcies - but, I would gladly invest in what is left for the US does have some of the best bankers in the world. The problem is some of them are just too damn smart for their own good.]]></description>
			<dc:creator>Reggie M</dc:creator>
			<pubDate>Fri, 28 Mar 2008 19:56:41 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8801</guid>
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			<title>Don Trader says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8805</link>
			<description><![CDATA[Cramer was on CNBC this morning saying banks were a buy, buy, buy - and know how he wanted to prove it? Call the banks and "let them tell their side of the story." Ummmm. How about that laying bare of books to see what assets they have and why they're worth what Lehman et al say they are worth? Citibank itself comes in from stage left, now that's reassuring. And Massachusetts is calling on BoA, Merrill, and UBS to step up and say why they did or didn't screw investors on auction asset values. I used to be an auditor and understand well that talk is cheap, especially from business exec's under pressure. We need a good, solid, mandatory round of price discovery for financial institution assets and liabilities. Hard to see any other way around this crisis in confidence that is delaying resolution of credit markets.]]></description>
			<dc:creator>Don Trader</dc:creator>
			<pubDate>Fri, 28 Mar 2008 19:51:53 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8805</guid>
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			<title>Reggie Middleton says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8803</link>
			<description><![CDATA[Here citibank says Lehman has ample liquidity (which it may), but then goes on to say that they had excellent earnings (they did not, as we found in they hid a loss through FAS 159 accounting), and then goes further to say that they are worth $65 share. Where in the world are they going to get the earnings to support such a price when revenues are being chopped in half and their business drivers are being dried up and regulation is coming down the pike and they still have devaluing assets being written down with most likely imprecise hedges? http://www.bloomberg.com/apps/news?pid=20601087&sid=ajj.WbV28HKg&refer=home This smacks of bank camaraderie. I agree that Lehman may have ample liquidity due to the Fed actions, but the rest of it is a stretch.]]></description>
			<dc:creator>Reggie Middleton</dc:creator>
			<pubDate>Fri, 28 Mar 2008 12:13:29 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8803</guid>
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			<title>Reggie Middleton says:</title>
			<link>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8804</link>
			<description><![CDATA[Me, wrong! Perish the thought :-) That is probably the most professional way I have ever seen anybody disagree with me on a blog. Kudos. You should give lessons in communication. I think you misconstrue some of my statements, though. A) It should be obvious by now simple saying our liquidity positions are fine is not good enough. This lesson is unequivocally laid bare in the monoline scenario. They consistently tout the virility of thier portfolio and financial positions while short sellers make money and the market prices them as deep junk. All they had to do to keep Ackman quite and cause me to reverse my position was to show how they were financially sound, not tell us how they were financially sound. Lay open your portfolio and detail its performance. They chose not to do this (and I admit that there are a few choice reasons why one would refuse), but in doing so they are condemned to the guesswork of the pundits, and even more importantly lose credibility in the marketplace. Lehman has an army of analysts, and it would not be a strain to prepare a detailed, yet concise white paper on their liquidity position that points out exactly how they're protected. Just saying "we're fine" brings to mind Ambac, MBIA, Hovnanian, and most recently Schwartz's Bear Stearns. That is not good company to be keeping if you are interested in your net worth. B)I understand, perfectly, the point about trying to call unfounded rumors unfounded but to blame the drop of the stock on short selling rumors without applying the same logic to the unprecedented pop in the stock is disingenuous. Of the stock drops 10% its a short seller conspiracy, but if it pops 15% its due to ?????. Of course there are rumors and speculation floating around concerning Lehman, and I am sure a few short sellers may have whispered in someone's ear, BUT the opposite happens more often, much more often. Wall Street is famous for the pump and dump - that's where the term came from. There seems to be much less complaint about the rumors that drive the stock up than those that drive the stock down. Does the populace lose more money with the short rumors than with the long rumors, whether started for economic gain or not? Is one worse than the other? If either is unsubstantiated , they are just as wrong and I am quite sure that someone, somewhere at some time started a rumor for economic gain that had to do with a stock going up. C) Isn't the ex-CEO of TYCO in jail now for fraud? Bad example ;-) but I get your point. D) It is not just about the stock just going down on rumors. It is the stock going down often on rumors, then popping back up (on rumors?), then back down again (on rumors?). This increases the beta (http://en.wikipedia.org/wiki/Beta_coefficient) of their stock, leading to an increased expected risk premium (http://en.wikipedia.org/wiki/Risk_premium), which in turn increases the cost of their equity capital and perceived equity risk (defined as downside deviation from expected return on this blog, by this author who is not a math geek so excuse him if he's wrong) ;-). You see, this popping up and down of the stock essentially makes it riskier stock. The rumors also expose a significant chink in the US I banking model. I banks take a relatively small amount of equity, lever it 25 to 35 times, and buy and sell things that few understand (including the I banks themselves). They offer services, many based solely on the publics belief that they know what they are doing. Products and service business models offered by I banks using 97 LTV loans based on the perception of superior knowledge or skill are quite susceptible to confidence levels, and are not nearly as sturdy as say Manufacturer X that makes widgets that can be touched and tested and physically compared. This allows I banks to generate considerable profit margins as compared to the widget company, but exposes them to unique and considerable risks as well. Lehman and Bear Stearns are sterling examples of these risks. Basically, many banks value, like beauty itself, is in the eye of the beholder. I have more to say, but my baby daughter is demanding my attention...]]></description>
			<dc:creator>Reggie Middleton</dc:creator>
			<pubDate>Fri, 28 Mar 2008 11:49:49 +0000</pubDate>
			<guid>http://boombustblog.com/reggie-in-the-news/item/259-lehman-stock-rumors-and-anti-rumors-that-support-the-rumors#comment-8804</guid>
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