Gasparino vs Einhorn, Kohn & Ritholtz

We have a rugby scrum!

ProBanks, ProLehmanDick Fuld (Lehman CEO), Charlie Gasparino (CNBC), Doug Kass (Seabreeze Partners), Thomas Brown (

Anti-Banks Anti-Lehman:  Donald Kohn (FOMC), John Roque (Natixis), David Einhorn (Greenlight Capital), Jim Rogers, Yves Smith (Naked Capital), and little ole me.


Fear vs. Facts on

click for video

Note: We have a sell rating on LEHMAN, with a $20 target —
Charlie Gasparino misspoke — we have no present short position with Lehman, nor do we think Lehman is a zero, like Bear Stearns.

Einhorn on Lehman

click for video

Parts I, Parts II, Parts III

Fed’s Kohn on

click for video

Fed Vice
Chairman Donald Kohn says he expect “continued weak earnings and write-downs from
banks in

coming quarters, reports CNBC’s Steve Liesman.

Disclosure: no position in any stock mentioned.



Dirty Tricks at Lehman? (June 2008)

Financial Sector: Beware LEH, CIT (June 2008)

More Financial Turmoil (June 2008)

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What's been said:

Discussions found on the web:
  1. karen commented on Jun 5

    Funny! When CG kept repeating, “who ya gonna believe, Dick Fuld/Barry Ritholtz, Dick Fuld/David Einhorn?” I kept thinking, “No brainer! Ritholtz and Einhorn!

    I’m still laughing about it. The BIG guys across the political, military, and financial sector have been lying through their teeth. They are in desperate straits…

    To list the their lies since 9/11 would take a team a week or more…

  2. michael schumacher commented on Jun 5

    So you are saying you posted the Fusion IQ call and ignored it or you’ve already been in and out??

    Oh do tell……


  3. michael schumacher commented on Jun 5

    A “sell” call means sell those shares that have already lost 15 or so points in a short period of time? or sell short?

    If it’s the former then how wrong (based on the last two day’s) was that…..


  4. Nihilism commented on Jun 5

    …Lehman’s CEO: At Lehman’s annual meeting in April, just a month after the deal for Bear Stearns to be taken over by JPMorgan was announced, CEO Richard Fuld declared: “I will hurt the shorts, and that is my goal.”

    Gee, if you get your ego out of the way, may be you will stop hurting the share-holders and their capital too. Bunch of EGO-MANIACs I guess!

    If Mr. Lacker is right, as he was about his inflation fears, we are probably in the 4th/5th innings of this credit market clean-up/deleveraging cycle.

  5. Barry Ritholtz commented on Jun 5

    Our disclosure policy is idiot proof: If we are short, we write WE ARE SHORT.

    When we are not long or short, we write: NO POSITION.

    FusionIQ covers 8,000 stocks –we couldn’t possibly be long or short all of them . . .

  6. michael schumacher commented on Jun 5

    I see….practicing the art of obfuscation. Very well IMO.

    You had your(i.e Fusion I.Q’s) chart up of LEH with it’s call.
    Not 8,000 other stocks…..

    But I see how that attempts to support your reply. I’m sure you can’t be bothered by a little issue of clarification.



    BR: I don’t see the ambiguitiy — Sell means sell.

    And, I specifically wrote: “NOTE: Traders who short stocks should always work with stop losses. The financial sector, with outside investors, have been very volatile, with squeezes occurring regularly.”

    I do not see what your misunderstanding is.

  7. Steve Barry commented on Jun 5

    Most astute comment ever out of Dennis Kneale’s mouth…what happened to the old days when the shorts operated in the background, not on TV? Just like in organized crime…the real brains, you have never hear of. I posted earlier I think Einhorn is a bit of a hack and that while LEH is probably an accident waiting to happen, other bloggers data shows a few other banks are much better shorts…sure enough, I checked short ratios and LEH is way over shorted and may have a backstop due to short covering. Try MER, MS and GS instead.

    I also think BTW Warren Buffet has jumped the shark with all his CNBC appearances. He used to work very quietly behind the scenes.

  8. brasil commented on Jun 5

    wouldn’t worry about Doug Kass on that side of the equation (love his work though from a counterweight point of view..)…but he is from a different world…he lives underwater with thesis and positions…He may have developed gills.. he is investors don’t have his timeframe…he’ll wait for the next cycle and say that’s how he was taught..

  9. Andy Tabbo commented on Jun 5

    Anyone else notice tendency of the stock market to trade up at 2.30 est when the oil pits close….it’s almost like stock traders say “whew…that’s over…everything is going to be ok now that the oil ring is closed…let’s keep buying stocks”

    It’s funny.

    – AT

  10. Steve Barry commented on Jun 5

    Market is so fixed…see how they only release S&P downgrades of MBI and Ambak when Dow is up 170?

  11. Vermont Trader commented on Jun 5

    AT – that’s the Michael Jordan rally. You know its coming but you can’t stop it.

    Quite the squeeze today, I guess the computers have decided we aren’t going to have a recession.

  12. Bob Abouey commented on Jun 5


    QQQQ volume looking pretty healthy lately.

    Yesterday was 174m, 167m, day before, averages are:

    Last 5 days 145
    Last 10 142
    Last 30 129
    Last 60 136
    Last 180 156
    Last year 152
    Last 2 years 134
    Last 3 years 119
    Last 4 Years 114

    Do you still focus on this indicator?

  13. Steve Barry commented on Jun 5


    QQQQ volume still pathetic…only 3 days out of last 54 that it barely passed 100 day MA for volume.

  14. michael schumacher commented on Jun 5

    what does one expect??..with the pile-on in LEH puts they have to wash those pesky shorts out before resuming it’s race to the bottom.

    Anyone thought those massive stakes in June puts with LEH would actually be allowed to make money (unless you took them two days ago) deserves to lose.

    They can play games all they want…..gravity wins in the end.

    Volumes really mean nothing when it’s obvious where it came from and, more importantly, why.


  15. lunatic fringe commented on Jun 5

    For the life of me I can’t even figure out why your name came up in the conversation, Barry. But I will say this, if Gas Bag considers you a friend, who needs enemies?

  16. Adam commented on Jun 5

    Can someone explain why the duolines being downgraded means absolutely nothing to the market now, as opposed to a few months ago?

  17. michael schumacher commented on Jun 5


    Simply put they had to offload all the garbage to the Fed in that period of time. Now that is complete (or they think it is) they get the green-light to do something that should have been done two year’s ago (since our market is forward looking and all that…….)


  18. cinefoz commented on Jun 5

    There’s something in the air today. I almost bought, but canceled my orders before they executed. I thought that oil was going down and that oil money was moving into the stock market. Then oil went up a huge amount.

    Combined with lackluster stats –

    1) retail beating expectations was a combination of Wal-Mart, Cosco, and Dollar General doing well and everyone else doing only ‘horribly’ as opposed the expectations of ‘hellishly bad’. Stimulus money is being spent on low end necessities instead of major items.

    2) total unemployment is still pretty bad, as opposed to the basically neutral news received today

    3) foreclosures up by a big amount … these people aren’t going to buy much retail for the moment or anything else.

    I suspect tomorrow’s news will be spun into a major triumph of massive proportions. I’m gratified that there are no new disaster stories on the horizon, but not having a new disaster is not the same as good news and good times ahead.

    This isn’t a permanent rise. I’ll buy in later when it dips a little and hold longer this time. I was looking at oil services, chemicals, latin america, and emerging markets as a starting point. This is just a big ass sideways market. The abovementioned groups will have a little strength given enough time, and even if I bought in today I think I would be up at end of year, but I think I can do a little better if I wait a couple of weeks.

    If oil ever gets under control, stocks will be the cash repository. If oil resumes it’s upward march, S&P 1300 is still a possibility.

    As for the question of the day regarding financials … Given a very long time horizon, I might buy some. Buy today, wait a couple of years, ans see big gains over today’s dismal values … assuming the company you buy into today is still aroung in a couple of years. Value crap is not going to do well until the econony improves or a new stock bubble starts billowing. I am a big value fan, but it’s dead money at this time.

  19. daveNYC commented on Jun 5

    I know the initial part of the post is tongue in cheek, but I’m going to complain anyway about your buying into the whole ‘pro/anti X’ frame. That’s the exact sort of outlook that the Fuld, Gasparino, etc are trying to get the ‘market community’ to believe in. You made a rational analysis (or at least I hope you did) of LEH’s reports or technicals or whatever and then announced your opinion to the public (or sold it, whatever). Going along with that pro/anti crap just supports the “Grrrr… Shorts bad!” BS line that keeps being pushed.

    Eh, sorry for the rant.

  20. Vermont Trader commented on Jun 5

    The market is manic depressive. She’s an emotional beast. She just got her credit limit raised and she’s feeling good. She doesn’t care if its raining out or that she’s almost out of gas.

    But just like all manic’s it can all fall apart in a second.

    Look at this MDY. I’ve been staring at this thing for a month. Bid 163.33. That’s a nice price. I think I’ve got to sell some.

  21. VennData commented on Jun 5

    LEH is like a big ‘phat’ pharma: No pipeline.

    What is Lehman going to do to make money, sell and Erin Callan clothing line?

  22. wisedup commented on Jun 5

    if Fuld’s hands were upon the wheel while Lehmans was leveraging up he should take up golf, or bridge.
    Gasparino is desperate to deflect attention away from the legality of the disclosure hence the need to couple BR etc with “short” on a regular basis.

  23. dcm commented on Jun 5

    tom brown says he’s pro-LEH…that says it all for me. FMD didn’t work out too well for him, nor did ACF. tom brown is good at squeezing shorts, but he’s usually on the wrong side of the trade when the smoke clears.

  24. Bob Abouey commented on Jun 5

    I really think you are missing the boat on the QQQQ volume analysis, you are comparing current volume to the peak volume during the big declines Q4 07 – Q1 / Q2 08. When I look at the broader trends, it is those extremely high volumes that are out of norm, not current volumes.

    Average volumes for longer period of times, per my prior post, suggest current volumes are pretty healthy. Using last two year average volume of 134m, and your measure of last 54 trading days (no idea why you use that), volume on QQQQs has been above that average for 21 trading days.

    Are you still short the QQQQs?

  25. Steve Barry commented on Jun 5


    It’s simple…you even say it in your own post. During the market’s weak periods, volume was much higher than it was during the up periods. Volume analysis is that simple…look at an on-balance volume chart and that’s what you are looking at. If you simply looked at a long term chart with volume and its 100 day MA superimposed, you would see that the last 54 trading days(that’s where I get the 54) has no parallel for at least 4 years in terms of volume drying up. If you are a bull, that is not something you want to see.

  26. michael schumacher commented on Jun 5

    >>I do not see what your misunderstanding is.>>

    I’m sure you don’t…..your reply back with this:

    “FusionIQ covers 8,000 stocks –we couldn’t possibly be long or short all of them . .”

    Again it was about LEH……not about the number of stocks that your product tracks. Certainly that has nothing to do with my understanding.

    Taking a stance and defending it requires discussion..not a low brow attempt at muddling the original issue. I read between the lines and found your response somewhat less than generous. I, as well as many others here, expect something better than that.

    That is why we continue to read this blog.


  27. dukeb commented on Jun 5

    This is why the uptick rule was removed. This is why bankruptcy was turned on its head. Home-gamers were/are set up for a bitch-slap fest by The Street that will last until their woes are over. My first reaction (gut reaction albeit) about the LEH sideshow was that it was a trap so “they” could make easy money on the way down, then launch a pre-planned counter-move, and make even more easy money on the way up. And that’s exactly what I think happened here. And what I think will continue to happen. The term “sheeple” gets batted around this blog’s comments a lot, and this LEH episode is its epitome to-date. I’ve been all cash for over a year now. And the inflation monster is about as scary as the boogie man.

  28. Periwinkle commented on Jun 5

    This spring when Lehman added capital by selling NON-CUMULATIVE bonds, I said to myself then, “this is because they plan to post a loss.” It was clearly telegraphed to all who remember what they were taught in college.

  29. Periwinkle commented on Jun 5

    This is why they sold non-cumulative preferreds this spring. They knew then that they would be reporting a loss

  30. booyah commented on Jun 5

    michael schumacher what is your deal? Why are you picking such a dumb fight. If you issue a “sell” on a stock, that means sell it and don’t own it. If you interpret that as sell short, that’s your problem, not Barry’s. Obviously some people will short a stock that has a sell on it too but that’s different. Give it a rest!

  31. lurker commented on Jun 5

    thanks booyah, could not have said it better myself… and Vermont Trader i hear you loud and clear my friend…. thanks for posting.

  32. Barry Ritholtz commented on Jun 5


    These each mean something different; A buy is not a hold, and a sell is not a sell short.

    Again, I am not sure where your misunderstanding comes from — I do not believe I said this SHORT Lehman (like we did with Fannie Mae) — but since both you and Charlie Gasparino mistook what I wrote for a short, I will endeavor to be EVEN MORE precise in the future.

  33. Eric commented on Jun 5

    Folks, Lehman Brothers has jumped the shark.

    Q. What is jumping the shark?
    A. It’s a moment. A defining moment when you know that your favorite television program has reached its peak. That instant that you know from now on…it’s all downhill. Some call it the climax. We call it “Jumping the Shark.” From that moment on, the program will simply never be the same.
    The term “jump the shark” was coined by site founder Jon Hein's college roommate of 4 years, Sean J. Connolly, in Ann Arbor, Michigan back in 1985. This web site, book, film, and all other material surrounding shark jumping, are hereby dedicated to “the Colonel.”

    The aforementioned expression refers to the telltale sign of the demise of Happy Days, our favorite example, when Fonzie actually “jumped the shark.” The rest is history.

    Jumping the shark applies not only to TV, but also music, film, even everyday life and Lehman Brothers. “Did you see her boyfriend? She definitely jumped the shark.” You get the idea.

  34. Darin commented on Jun 6

    I thought Gasparino was struggling during the interview. I heard this morning on XM radio and found his reasoning lacking. When the host asked him whether people would have said the same thing as he tried to defend LEH’s management by saying that their CEO was actively engaged trying to solve this problem versus the actions of Jimmy Kane (SP?), I thought he really started stretching. Einhorn may not have presented the best possible case, but the fact remains that LEH has yet to reconcile its balance sheet with the full magnitude of their loses. They will obviously be returning to shore up their capital ratios. I particulary found it troubling that “Gasbag” felt the need to attack Barry and Einhorn so vigorously simply because the premise of his entire argument was that management was working the problem. How many times has that been said before?

  35. michael schumacher commented on Jun 6


    making it about my “misunderstanding” instead of your lack of clarity-which was easily seen but I gather you have to want to see it… and flippant response back is where to start. Not about your disclosure policy (may be your other readers didn’t catch the “idiot-proof” comment however that’s where the problem began). Instead of saying “hey I made a bad call” you’ve decided to make this about my understanding. That’s no different than Kudlow, Gasparino, and the pundits of the world.

    Regardless of the call it was wrong and your public response to my questions tells me all I need to know about how you really feel about it.

    You and your “product” made a bad call… up to it.

    That’s all….making it my problem is laughable…..remember I didn’t post the chart you did.


  36. Arthur commented on Jun 6

    Hey Barry, wondering if you wouldn’t mind identifying comments by Monsieur Schumacher at the TOP of his missives so I could more ably skip them. thanks

  37. michael schumacher commented on Jun 6

    yes I’m totally crazy but think about what that says about you , arthur…that you have read them but made your decision on it’s content solely on the basis of the author.

    Good luck with that.


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