Comments on: Lehman May Put $32 Billion of Dubious Debt in "Bad Bank" http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html Mon, 23 Nov 2009 05:03:06 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: S http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14207 S Fri, 05 Sep 2008 12:22:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14207 remeber LEH structred a deal to deposit at the central bank called freedom. FULD is really that arrogant remeber LEH structred a deal to deposit at the central bank called freedom. FULD is really that arrogant

]]> By: Anonymous http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14205 Anonymous Fri, 05 Sep 2008 11:58:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14205 is "Bad Bank" some metaphor for the ECB? <br/><br/>"Banks reel as ECB redraws funding rules"<br/><br/>http://www.ft.com/cms/s/0/b65c2842-7a6a-11dd-adbe-000077b07658.html?nclick_check=1<br/><br/>redacted:<br/><br/>"Bank stocks in Europe and the UK fell sharply and the risk of owning their debt leapt on Thursday after the European Central Bank declared a crackdown on abuses of its bank liquidity operations. "<br/><br/>"This year it emerged Macquarie Bank had constructed a deal backed by Australian car loans that could be used at the ECB and Lehman Brothers had formed a huge collateralised loan obligation of risky buy-out debt to use at the central bank." is “Bad Bank” some metaphor for the ECB?

“Banks reel as ECB redraws funding rules”

http://www.ft.com/cms/s/0/b65c2842-7a6a-11dd-adbe-000077b07658.html?nclick_check=1

redacted:

“Bank stocks in Europe and the UK fell sharply and the risk of owning their debt leapt on Thursday after the European Central Bank declared a crackdown on abuses of its bank liquidity operations. “

“This year it emerged Macquarie Bank had constructed a deal backed by Australian car loans that could be used at the ECB and Lehman Brothers had formed a huge collateralised loan obligation of risky buy-out debt to use at the central bank.”

]]> By: Richard Kline http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14203 Richard Kline Fri, 05 Sep 2008 11:42:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14203 Dupeco.<br/><br/>"We duplicated ourselves, only we got the whole and while they got the hole." Dupeco.

“We duplicated ourselves, only we got the whole and while they got the hole.”

]]> By: Kidder Reports http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14187 Kidder Reports Fri, 05 Sep 2008 05:13:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14187 The name 'Spinco' must be Lehman's idea of due diligence. If you are willing to put your money into a company named 'Spinco', we wish you "good luck!' and hide our gleeful smirk. <br/><br/>By the way - what ever happened to the suitability rule? In short, don't sell stuff to an investor unless it fits his/her needs and circumstances. <br/><br/>Good rules like suitability already exist on the books -- but the trouble is they haven't been honored or enforced. Robert Milken showed the Wall Street puppies how to can sell paper called 'junk.' The key to selling trash -- then and now -- is the inducement to portfolio manager. Oh dear -- did I pull a punch by not writing improper inducements? <br/><br/>Never mind! I know the suitability standard is ancient history and may not apply in the case of LEH dumping its trash onto willing foreigners like the Koreans. In any case, the take-away from Milken's tennis camp adventure was this: <br/><br/>There is no lasting penalty for doing "what it takes" to sell 'bad paper' to widows, orphans and Koreans. Milken show the boys that, if in the unlikely event you are caught and prosecuted, then you will be treated by the WSJ as a martyr, you will keep most of the money, and you will live live to play again! <br/><br/>But think about this: if the suitability standard had been maintained over the past 20 years, would the Wall Street be in the present mess? The name ‘Spinco’ must be Lehman’s idea of due diligence. If you are willing to put your money into a company named ‘Spinco’, we wish you “good luck!’ and hide our gleeful smirk.

By the way – what ever happened to the suitability rule? In short, don’t sell stuff to an investor unless it fits his/her needs and circumstances.

Good rules like suitability already exist on the books — but the trouble is they haven’t been honored or enforced. Robert Milken showed the Wall Street puppies how to can sell paper called ‘junk.’ The key to selling trash — then and now — is the inducement to portfolio manager. Oh dear — did I pull a punch by not writing improper inducements?

Never mind! I know the suitability standard is ancient history and may not apply in the case of LEH dumping its trash onto willing foreigners like the Koreans. In any case, the take-away from Milken’s tennis camp adventure was this:

There is no lasting penalty for doing “what it takes” to sell ‘bad paper’ to widows, orphans and Koreans. Milken show the boys that, if in the unlikely event you are caught and prosecuted, then you will be treated by the WSJ as a martyr, you will keep most of the money, and you will live live to play again!

But think about this: if the suitability standard had been maintained over the past 20 years, would the Wall Street be in the present mess?

]]> By: Anonymous http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14186 Anonymous Fri, 05 Sep 2008 05:09:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14186 Re: How stupid do they think the planet is....<br/><br/>Maybe this is the type of logic The Fed used when it bailed out Bear!! LOL! Re: How stupid do they think the planet is….

Maybe this is the type of logic The Fed used when it bailed out Bear!! LOL!

]]> By: Anonymous http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14179 Anonymous Fri, 05 Sep 2008 03:29:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14179 Oh and another thing....<br/><br/>The latest theme--"Good Bank/Bad Bank;" why isn't anyone taking that to task?!?!?<br/><br/>Why "Good Bank/Bad Bank?" Why not "Profit Bank/Loss Bank," "Good Positions/Bad Positions," "Cherry picked/Non-cherry picked," "88888 account/00000 account," etc....<br/><br/>Ok, let's put all our good investments in one account and pretend that's the only that matters and the cr@p in another and pretend it doesn't exist unless it makes profits. How do they get away with it?!?! And what of their credit ratings? They get two? Good Bank-AAA, Bad Bank- CCC? Just as ridiculous! Oh and another thing….

The latest theme–”Good Bank/Bad Bank;” why isn’t anyone taking that to task?!?!?

Why “Good Bank/Bad Bank?” Why not “Profit Bank/Loss Bank,” “Good Positions/Bad Positions,” “Cherry picked/Non-cherry picked,” “88888 account/00000 account,” etc….

Ok, let’s put all our good investments in one account and pretend that’s the only that matters and the cr@p in another and pretend it doesn’t exist unless it makes profits. How do they get away with it?!?! And what of their credit ratings? They get two? Good Bank-AAA, Bad Bank- CCC? Just as ridiculous!

]]> By: Stuart http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14178 Stuart Fri, 05 Sep 2008 03:19:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14178 By trying to rush this through before the 12th, they can't honestly believe people won't see through the reasoning behind this haste, let alone through the entire scam in the 1st place. If they do, and it's a big if, one can only stare in astonishing at the audacious level of self-deception they have in believing they can get away with yet another fraud. How stupid do they think the planet is.... By trying to rush this through before the 12th, they can’t honestly believe people won’t see through the reasoning behind this haste, let alone through the entire scam in the 1st place. If they do, and it’s a big if, one can only stare in astonishing at the audacious level of self-deception they have in believing they can get away with yet another fraud. How stupid do they think the planet is….

]]> By: S http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14177 S Fri, 05 Sep 2008 03:17:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14177 they cower under the systemic risk excuse and then they leak a story to CNBC that of BS went down it wuld have taken LEH, MER, JPM and MS. Stir up some fear TBTF. Then presto everyone looks the other way while they deficate on the US taxpayer. Fuld maybe even lobs a call into NY Fed and calls Jamie D, the other rotating head, for some advice. That is the way it works. they cower under the systemic risk excuse and then they leak a story to CNBC that of BS went down it wuld have taken LEH, MER, JPM and MS. Stir up some fear TBTF. Then presto everyone looks the other way while they deficate on the US taxpayer. Fuld maybe even lobs a call into NY Fed and calls Jamie D, the other rotating head, for some advice. That is the way it works.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14172 Anonymous Fri, 05 Sep 2008 02:26:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14172 What I find interesting is the haste in which they are doing this. Sept.12 a deadline, why? Seems to me they want to include this into their earnings report to hide the other cr@p going on. <br/>If they are deficient in capital due to a loss, aren't they supposed to inform the regulators at once rather than raising the capital then marking their loss, net effect zero? Weren't they supposed to be marking as at Aug 31, not two weeks later after they covered with capital? how do they get away with it? What I find interesting is the haste in which they are doing this. Sept.12 a deadline, why? Seems to me they want to include this into their earnings report to hide the other cr@p going on.
If they are deficient in capital due to a loss, aren’t they supposed to inform the regulators at once rather than raising the capital then marking their loss, net effect zero? Weren’t they supposed to be marking as at Aug 31, not two weeks later after they covered with capital? how do they get away with it?

]]> By: S http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious.html#comment-14170 S Fri, 05 Sep 2008 02:02:00 +0000 http://www.nakedcapitalism.com/2008/09/lehman-may-put-32-billion-of-dubious-debt-in-bad-bank/#comment-14170 What this says is that they are willing to ssacrifice $8B in capital to get the $30 plus into a vehicle. This basically tells you that the effective book value is $16-17 versus the touted $30. It also confirms what the anonymous KDP gov regulator said in that the company is completly insolvent. I know this isnt a new revelation, but it is fascinating that having been completley picked over by the world over (literally) the garbage barge comes back to port to dock. There was a waste barge some years ago that simply sailed around with no place to go. <br/><br/>I still want to know why Dick Fuld is on the Board of the NY Fed. He should either be asked to resign immediatly or thrown out. And if he makes a sound he should be read his rights. This for the untimely statments, repeatedly, about the companies liquidity position whcih were outright lies. Then the repeated leaks. Gasbag should be put on the stand. What this says is that they are willing to ssacrifice $8B in capital to get the $30 plus into a vehicle. This basically tells you that the effective book value is $16-17 versus the touted $30. It also confirms what the anonymous KDP gov regulator said in that the company is completly insolvent. I know this isnt a new revelation, but it is fascinating that having been completley picked over by the world over (literally) the garbage barge comes back to port to dock. There was a waste barge some years ago that simply sailed around with no place to go.

I still want to know why Dick Fuld is on the Board of the NY Fed. He should either be asked to resign immediatly or thrown out. And if he makes a sound he should be read his rights. This for the untimely statments, repeatedly, about the companies liquidity position whcih were outright lies. Then the repeated leaks. Gasbag should be put on the stand.

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