Lehman broke $10 just now, down 40% for the day.
>
For laugh, check out Charlie Gaspario’s CNBC video at the time —
simply inexcusable reporting by CNBC, cheerleading a CEO against credible critics of the firm: “Shorts are full of it, desperate . . . Maybe Dick Fuld is right and Einhorn and Ritholtz are wrong… Who do you believe: Dick Fuld, or Einhorn? Dick Fuld, or Ritholtz?
(Charlie, you can mention my name and Einhorn’s in the same sentence anytime!)
Dennis Kneale’s critique of Einhorn is similarly awful.
How was
Some of the comments on our Sell call of Lehman at ~$30 now look a little silly.
Finally, this is directed not to everyone, but to a few hardcore Cramer Kool-Aid drinkers (you know who you are): Stop cheering the Financials. Fannie (FNM), Lehman (LEH), AIG — when are you going to stop arguing with these calls? Hasn’t this track record been enough for you yet?
>
Related:
Lehman Shares Fall After Talks With Korean Bank End Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXucA2p.fqmg&
Previously:
Financial Sector: Beware LEH, CIT June 03, 2008
http://bigpicture.typepad.com/comments/2008/06/financial-secto.html
Updating Lehman Sell Call June 12, 2008
http://bigpicture.typepad.com/comments/2008/06/updating-lehman.html
Boom is right.
Awww man! And I thought WaMu would be next to fail!!
Fed emergency 50bps rate cut in the discount window in 3 . . . 2 . . . 1 . . .
Where is Cox? When is he going to pass the “no shorting Lehman” rule? Please let them fail.
Damn Korean rumor mongers! Does the SEC do travel?
Looks like we should be prepared for another bailout this weekend.
Lots of puts going to be valued. I wonder who sold the majority thinking they were junk. That’ll be the next undoing.
Market tells a story of deflation. This is going to get really ugly.
Not even 1 full day after the bailout and the market can’t hold gains. Of course, there’s no reason to rush into the market now and get run over by the freight train.
It’s far better to wait out the market until earnings growth comes back than to be early and take losses.
I completely agree with the deflation meme now. All aboard the D train! All aboard!!
Re-shorted LEH at 15 last week covered at 9
Thanks
Uh oh.
I just heard Vince Farrell tell the audience the lows are in from the July lows. That was the LOW.
For me, that’s an automatic SELL signal. Let me say this….this gentleman seems like a perfectly nice person…a real nice guy…probably a great father and grandfather….but he has been pretty much WRONG all year long.
– AT
I actually have CNBC HD on this morning. With the HiDef picture (Trish Regan has never had a pimple, ever) and the volume turned completely off, CNBC does not suck as much. I love the sidebar information in addition to the tickers, and not hearing anything, I can pretend that people are making sense…
…except when the caption “HAVE FINANCIALS BOTTOMED?” is on. Like right now. Like 3 months ago. Like 6 months ago. Like 5 years from now.
When LEH goes down, we get to find out who wrote CDS against their debt.
And it won’t be near par like FNM & FRE.
I’m wondering if that’s why AIG is also in the toilet today.
To quote Gasbag from memory…
“So who are you gonna go with; a Dick Fuld or some tradh talkin’ short like my good friend Barry Ritholtz?”
Absolutely, positively Barry!
Secretary Bazooka’s looking at the screens goin’ “Jeez, not another double all-nighter THIS weekend too.”
This is me, giving Barry a thumbs up and the delusional cheerleaders one that isn’t the thumb :P ;)
The logic is staggering: who ‘ya going to believe, the murderous husband who stood to gain umpteen billion dollars in life insurance from his spouse’s death or the detective from Long Island who doubts the story?
There is a reason Kneale and Einhorn are in their respective careers (and the same goes for Barry and Gasp!arino. Can you imagine Kneale trading?
One thing I have not been able to figure out:
1. Who the hell is Dennis Kneale?
and
2. What, exactly, has he accomplished or learned that makes him a person to be listened to in the financial arena? Is there some sort of track record? Because his record lately just makes him look incredibly stupid and grossly misguided.
3. Does this guy have no friggin shame, or what?
4. Should I even waste five minutes trying to figure out the ansers to 1-3?
Shhh… Dennis Kneale = reverse indicator…
“Hey kids, Dennis Kneale’s on again.”
“Turn up the sound, Dad.”
Fannie (FNM), Lehman (LEH), AIG — when are you going to stop arguing with these calls?
Hmm…my life insurance policy is with AIG. The prospect of getting another policy if it goes belly up is…dismaying, given how great a PITA it was the first time.
Classic video. That one may live in infamy….”Lehman Brothers is NO Bear Stearns…”
We shall see.
– AT
Comrades Bush, Paulson and Bernanke Welcome You to the USSRA (United Socialist State Republic of America)
from RGE Monitor by Nouriel Roubini
The now inevitable nationalization of Fannie and Freddie is the most radical regime change in global economic and financial affairs in decades. For the last twenty years after the collapse of the USSR, the fall of the Iron Curtain and the economic reforms in China and other emerging market economies the world economy has moved away from state ownership of the economy and towards privatization of previously stated owned enterprises. This trends was aggressively supported the United States that preached right and left the benefits of free markets and free private enterprise.
Today instead the US has performed the greatest nationalization in the history of humanity. By nationalizing Fannie and Freddie the US has increased its public assets by almost $6 trillion and has increased its public debt/liabilities by another $6 trillion. The US has also turned itself into the largest government-owned hedge fund in the world: by injecting a likely $200 billion of capital into Fannie and Freddie and taking on almost $6 trillion of liabilities of such GSEs the US has also undertaken the biggest and most levered LBO (“leveraged buy-out”) in human history that has a debt to equity ratio of 30 ($6,000 billion of debt against $200 billion of equity).
So now Comrades Bush, Paulson and Bernanke (as originally nicknamed by Willem Buiter) have now turned the USA into the USSRA (the United Socialist State Republic of America). Socialism is indeed alive and well in America; but this is socialism for the rich, the well connected and Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill of $300 billion.
I’m thinkin’ Kafka, his ownself, might be at a loss for words to describe the Theatre we’ve been witnessing–and, we’re not even at the Intermission.
Damn you Barry Ritholtz!!!
You took a fine company down with all your Debbie Downer talk.
If you just spoke happy talk all the time, the markets would rise forever.
Please take this website off the net before this thing you call “information” takes us all to the poor house.
I’m moving to Pakistan where they know how to support their stock market.
BR – time to short the financials again?
LEH & WM going down (look at the CDS on both of them). There will be NO bailouts of either entity.
The next bailout will be the FDIC after it has to takeover WM.
Barry,
Can you please dedicate a post and ponder why the F$@% hasn’t Dick Fuld been fired yet?
I cannot believe that anyone is surprised that Lehman is going down the toilet. There will be similar whimpers of disbelief and cover-up BS when GS comes out with crap for numbers next week. These guys just don’t get it…they can only cook the books for so long…all within GAAP of course!! Koreans say no thank you, we have invested in enough garbage..I am shocked, shocked.
Ummm.Dick since you are tthe last one in the office, could you please turn out the lights?? Thanks, buddy.
Captain of Titanic (fULD) to first mate(gasparino)…” Quick, get the band out there so noone pays attention to the ship sinking!!!”
No one can tell me that everyone on CNBC has not gotten an implicit nudge to keep talking up this market. Perhaps there will come a time when all of them capitulate. Then we will know we have reached bottom. Cira Q4,09.
If Dick Fuld stays in the office, off the golf course and out of the bridge tournaments, he’s “engaged” and deserves to win!
Well, the last few months have been like a slow motion of the twin towers to me…I don’t normally go to blog sites, but have been active posting lately, mainly because I don’t see how this tragedy ends well for us here in the us, and also worldwide. And I must admit it is fascinating for someone like me to just watch it play out.
Extremely bothersome this morning was the budget deficit increase to 407 billion from 161 billion and that is just in one year. And now we’ve added the GSE’s and we all know Ford and GM have made a wish list.
Washington Mutual, National City. State budgets are strapped for money. The governator probably wished he made another sequel rather than work in Sacramento.
This just feels more ominous, and the news just doesn’t seem to get any better.
Nouriel Roubini as Pollyanna??
Yet, this doesn’t depress me, we’ll all get through it…but does seem rather perfect stormish…doesn’t it?
Bruce in Tennessee
This stuff is getting is so predictable .
I concur with the Kafka comment .
Thank you Professor BR .
Perfect stormish, indeed. But it’s looked that way for a while — since last summer, at least, imo.
I’ve been watching CNBC with the volume muted for years now. Listening to those bozos speak is just too painful.
Barry talked about this on January 7th “Five Stages of Market Grief”
Those morons on CNBC and elsewhere are still stuck in Stage 1
D E N I A L
It can take longer to get thru this one then all the other 4 combined. As reported Fuld, is convinced his company is worth $50 bucks a share. First off it is not HIS company it was the shareholders he screwed over with his inability to see the writing on the giant wall,,,street.
I’m getting the impression, this train left the track quite a ways back; but, stayed close enough to the track that a lot of people were unaware of the seriousness of the situation; but, now, it is slowly taking on a personality of its own.
The markets went down for (3) straight years after the Nasdaq Crash in 2000. If this thing continues the way it is going now for (2) more years, there won’t be anything left.
After only 1 day, it is already time to feed the dragon once again. This is getting down-right historic for all the wrong reasons. I’m not sure we will even make it to the month of October let alone November 4th.
We are on a slippery slope! The avalanche waits.
This reminds me of the classic plugging a small hole in the dam only to have another spring up somewhere else and so forth—how long will it take for the whole thing to explode?
DENIAL is the right way to define the current situation. Lehman and WAMU will fail and won’t receive govt backing imo.
Gasparino looks young, healthy, fit. He should look for a job.
I think we’re heading for war.
Geopolitically, there’s just no way that the rest of the world is going to “take it”. They’ll go F-U and we’ll go click-boom on them.
War is good for finance anyways.
Sad.
You know sometimes, you see these incompetents trying to abscond themselves from any wrong and it just pisses me off to no end. Here’s a good!!
Levitt Says Fannie, Freddie `Really Cooked the Books’
WELL NO SHIT, SHERLOCK!!!Where the hell have you been?
RE CNBC, I watch the morning crew… and that is it. If I turn it on during the day, it would be without sound, just to see what is happening. Can’t stand the Dennis guy.. One other rule, if I see Kudlow on in the morning, I immediately turn it off. I know Barry thinks he is a nice guy, but I can’t stand him. Passes himself off as a financial guru, but in reality he is a politician, hyping whatever will help the Republicans.
LEH cds trading @ 420-440
On the subject of Cramer & Kool-Aid, after being called out by Rev, Cramer tried to narrow his July bottom call to just the financials. Does this sound like he was just talking about financials? : “All of these mean that every dollar down [in oil] can be a half-percent up for this market. You can only imagine what that means to the S&P when we get to $110. If we get to $100, people will be talking about a new bull market.” — Cramer, August 6, 2008.
Can we say “Leisure-Suit Larry”? All he needs is a bottle of snake oil, slick his hair back and he’s set.
Luskin is the one I love. He puts on a dress coat over a ratty t-shirt. That speaks volumes for that jerk…I mean asshole, sorry.
I’m livid with CNBC toting out the LEH will pre-announce earnings announcement… so what? all we’ll get is another quarter’s worth of lies and cooked books…
I’ve also gone the mute route with CNBC and now find that channel to be very enjoyable, thank you very much.
@Eric: I noticed that one as well. Gotta love it. Will most people notice? Nope. That’s why Cramer does it.
He also said that Google and RIM were screaming buys. How are those calls working out?
Jeff M., what I hate is when people retort, “Oh, stop obsessing about Cramer, blah blah blah.” Huh? What the heck is all this blogging, punditry, surfing, performance comparison stuff all about if you can’t try to shed some truth on the most watched market squawker in the world? The thing is, if just a few people in the media were to really put together a cohesive story on his deceptive writing, he could be put in his place fairly quickly. And investors would be the better off for it. Instead we get, “Oh, some people are just fixated on proving Cramer wrong.” Can you say, “missing the point”?
Hey that little hobbit Dick Bove was just on CNBC. Wasn’t he the one telling us Lehman would be bought out at 20 bucks just a few weeks ago?
– AT
Why the h*ll didn’t all you muters tell the world that CNBC is so much better without sound? I am loving the silent HD video with Maggie B just on a few minutes ago and all these fancy graphics. And Erin Burnett has already taken her shower.
LEH is at 8.96.
I watch Bloomberg for my financial news.
I watch CNBC for my financial comedy.
Intraday not available for LEH. Did they halt trading?? Or is this a glitch in my system…
Jeff M. @ 11:18:11 AM
“I completely agree with the deflation meme now. All aboard the D train! All aboard!!”
Hallelujah !! Jeff M has not only become a deflationista but he has clearly adopted and absconded with my “D train™” concept of a week or two ago, and has even improved on it by adding “All aboard!!”. Great minds think alike, I guess… welcome brother.
Not involved today but watching XLF very very closely as it struggles to hold support at 21.86 (XLF 22 was prior resistance). Those who called for a weak and failing rally this week (Karen) may well have been correct. From a technical perspective this is a very important close. SPX 1215 was where the market turned on Friday morning so that’s the marker now.
Barry, when we get to the bottom, you should make a special for PBS in which you review the “credit crunch” and the market crash and show footage of all those CNBC tools talking up a series of rotting financial carcasses….
guys! at least keep your eyes out for an inflation train… it may leave the station before yours, or (gasp!) be the only train leaving the station :)
i bot gdx today for fun… looks like blood in the streets there to me. also bot some srs and skf near today’s low since i decided to sit on my hands yesterday.
Barry’s site is the best, isn’t it?!
(my first post…)
Let’s talk THE BIGGEST PICTURE of all.
U.S. equities returned 10% throughout the 20th century.
U.S. equities returned 10% throughout the 19th century.
We were a developing nation in the 19th C. We became Pax Americana in the 20th C.
BIGGEST PICTURE? It’s the great hidden secret. And it’s time to face up to it…
Neither condition will apply for the remainder of the 21st century. The days of 10% equity returns ACROSS DECADES are over.
The capitalists can try to convince the American masses that 10% equity returns will accumulate going forward over the long run… but in the long run, things change. And that change arrived about eight years ago.
The university endowment funds know it. They’ve been looking everywhere (commodities, emerging markets, venture capital, timber) EXCEPT U.S. equities.
Get used to it.
bove did say that lehman needed to have a deal by labor day or it would be in trouble
excellent post TG. Probably explains why the $ndx is nearing the apex of a 9 year triangle that should break down and not up…
meanwhile QLD is nearing it’s yearly lows and to quote someone else: “heaven help us if it’s not an inverted H&S.”
I assume it’s not but am out of my QID as of Friday.
I’m not sure about those rumours about Lehman, but I don’t think Charlie Gasparino can be believed when he says Barry Riholtz is a good friend of his. Smirk.
“Looks like we should be prepared for another bailout this weekend.”
My inside sources are saying that late Friday Paulson will announce that the government is going to bail out the government.
Hows that rally working put for ya Cramer??
Another one day wonder. Thanks BR I shorted LEH and its going to be a good Christmas!!
As soon as Hank bails out LEH or nationalizes them or whatever, tax payers should at least insist on a name change: from Lehman Brothers to Marx Brothers.
Black holes! Black holes! EVERY BLACK HOLE MUST BE FIXED OR SHOT: AIG, LEH,F,GM,WM,C…
Not my words, Cramer’s. Looks as if the July low call is getting a caveat attached.
Best regards,
RF
Black holes! Black holes! EVERY BLACK HOLE MUST BE FIXED OR SHOT: AIG, LEH,F,GM,WM,C…
Not my words, Cramer’s. Looks as if the July low call is getting a caveat attached.
Best regards,
RF
Sorry for the double posting. I will blame it on Chrome but I suspect it was fat fingers.
Best regards,
RF
Will you people hold it down? I’m trying to watch M*A*S*H down here.
You all sound like a bunch of billy goats gruff up there.
Another rat has been spotted running across the screen.
MUTE! MUTE! MUTE! MUTE ALL TV SETS IMMEDIATELY!!
Charlie Gasparino is to the markets what Sean Hannity (well, all the Fix News talking heads really) is to politics.
In other words a BFFN. (Big Fat Fcking Nothing)
http://www.dni.ru/economy/2008/9/5/148521.html
yahoo babelfish translation of the link above.
Russia reduces the investments of means from the international reserve into the dollar stocks, reported on Friday the first deputy chairman TsB Aleksey [Ulyukaev]. The volume of investments was reduced one and a half times since the beginning of the summer. Furthermore, the representative of Russia bank described that in August TsB he did not begin to buy American currency, but at the beginning of September it began to get rid of the reserves of dollars on the calculations.
[Ulyukaev] added that in this stage Russia bank was ready to buy the Euro, now a fraction of united European currency in the purchases comprises order 15%. According to him, Russia bank “not to away increase this portion, but market capacity is thus far very small”.
Also the first deputy chairman TsB described that the zero inflation in September is expected. According to him, the basic reason for inflation lies in an increase in the prices of the meat and the milk. However, according to the data of the service of state statistics, not only meat and dairy products rises in price. In the last week of August most noticeably – to 0,6% – became dearer the canned foods, eggs, fig and salt, only less rose in the price the separate types of sausages and confectionery articles, and also milk mixtures for the children’s nourishment.
According to [Ulyukaeva], in essence an increase in the prices is connected with the macroeconomic factors. Thus, with an increase in the volume of the means, which are turned in the Russian economy, grow consumer prices. In 2008 the growth rates in the monetary stock in the rotation are one and a half times less than 2007- m, and it means, on the sums of year it is possible to expect that the inflation will not exceed the official forecast of government.
Also [Ulyukaev] noted that on an increase in the consumer prices the state of the exchange value of national currency has an effect, it transfers RIA “of the news”. In the recent weeks Russian ruble began to be inferior to the position to two basic world currencies – to dollar and to the Euro. According to the deputy chairman TsB, according to the calculations of experts, weakening a ruble in altogether to 1% only gives an increase in the inflation by 0,3%-0,4%. “But there are no precise calculations as yet”, it, noted.
However, as stated [Ulyukaev], Russia bank as before considers that the dollar is thus far underestimated and it will continue grow, even more weakening ruble.
“Dollar has a base to the increase, but as for long this will continue and how a strong it will be increase, I make it difficult to answer”, gives the words of official the agency of [PRAYM]- TASS.
How dare you mock my hero Jim Jones. He was ahead of his time.
The Old Fool, Alan “Johnny Law” Greenspan, just appeared on BubbleVision.
Predictably, he thinks Paulson’s bailout of the GSEs was just dandy. He blames their failure on the “ambiguity” of their government sponsorship.
Naturally, he didn’t say a word about his cheering on of ARMs when the Fed Funds rate was at 1%, feeding the housing Bubble. And of course, he didn’t recant his claim that Bubbles can’t be identified in real time, and that pre-emptive action against them would be misguided.
But now that Part II of his dogma — cleaning up the prodigious mess after a Bubble pops — is in effect, Alan/Johnny thinks government is doing a wonderful job. He even thinks a PPT-like group of “financial experts” (folks like his goodself) should be convened within the Treasury to do lighting-quick nationalizations. He specifically averred that private citizens shouldn’t be allowed in the group. Don’t want a noisy rabble interfering with the plutocrats’ looting, do we?
Thanks to this nauseating performance, I came very, very close to rearing back and slamming my flattened palm against the TV screen to crush and bloody Greenspan’s bulbous clown nose. The Old Fool makes me puke with disgust, as he smugly congratulates himself for wrecking the lives of millions of real people with his flagrant malfeasance and his halfwit intellect.
I see a lot of negativity regarding Gaspy today, but he will always have a special place in my heart for accusing Dennis Kneale of being Client # 1 on the air. That, my friends, was classic. Or CNBC Sucks Classic.
Hate to tell you, but with a Naval Academy flunkie for Prez and a tanning booth chick who attended 4 community colleges before getting a communications degree from Idaho as VP, don’t be surprised if Dick Fuld is named your next Secretary of the Treasury. That’s about right.
I said it earlier and I repeat it; we’re heading for war, with Russia no less.
On a side note, tomorrow, CERN (who invented the Internet sorta) is going to fire up the Large Hadron Collider (LHC) a giant Particle Collider that some people (Tin foil hat kind) are afraid might create artificial black holes that would swallow up the whole earth, as in a bad Doomsday scenario.
I say who needs to spend European tax payers money to built an LHC to do black holes ? We got LEH here doing a fine job :c)
Wait, the previous post is in one week from now….
oh geez, I just jumped through time in a wormhole!!
So what happens now?
The only way Yomamabama can win now is for the economy to melt down totally before Nov.
McStain and the (tanning booth chick), LOL, are rocking and rolling the great unwashed.
So can the PTB keep the wheels on til the election? Do they want to?
Is this just another WWF spectacular? Meaning it doesn’t matter who wins, the puppetmasters remain the same.(Ha ha, stupid question)
My brave prediction is Lehmans will be another Friday night special, this Friday night.
AIG or WAMU will step to the end of diving board and belly flop one week hence.
Disclaimer: I am no high falutin financial guru, just a concerned cattle rancher.
LEH sure is no Bear, Bear got sold for 2$
Is it possible that Greenspan is a plant, seeking to actively destroy the corrupt corporatist system a-la Ragnar Danneskjold in his old mentrix’s magnum opus, _Atlas Shrugged_? Could anyone be so purely evil, or purely stupid?
I miss MS, did he move back to Brazil?…
Donkei, you made me laugh all over again.
Glad I didn’t give you shit about that one BR! I know it’s hard as hell to hang on to a position these days.
Let it sink – at least one for freakin sake!
or are we hanging the debt on the futures generations for the fun of it?
You all sure are right about watching CNBC muted. Was very nice today. Only turned it on once or twice. Once was when Dennis was being so obviously idiotic that everyone else was just staring at him.
Cramer is actually sorta funny silent too. Never seen anyone so animated.
Just wondering… and excuse my twisted chain of thought – so now that the window for banks raising capital from SWFs and PE is essentially closed (Bennett Sedacca predicted this in exquisite detail) – is LEH done and dusted – and is it small enough to fail ? If the counter-party risk is not significant, then this one is bye-bye.
So, if we all know it is going to fail, has the market priced it in already? In BizarroWorld might we see LEH fail and the market rally?? Clearly this is not Bear Stearns. A few witty souls have suggested that LEH and WM get married… in Vegas maybe.
Talking about steeply falling, how would everyone feel about 700$, then 650$ Gold? :)
775$ just went and imho this is big.
I am quite frankly amazed anyone ever thought Cramer was anything other than a hyper, pretentious, loudmouthed, self-promoting, egotistical, maniac hack.
It’s what I got as impression after 10 seconds of seeing him, and 10 months later it’s still A1 true. He sure called that bull market to 15k+ well right before the crash while we were near 14k.
I do wonder how these people ever got employment outside of Mickey Ds. Guess smoke and mirrors go a long way to obscure utter lack of competence in acknowledging and recognizing the real world.
MS was the biggest CHIMP ever on this comment board ….
BDG123 was a close second
05-Sep-08 14:46 ET In Play Lehman Brothers ticks higher as Cramer on CNBC says LEH is a screaming buy, saying it can’t get worse from here (16.21 +1.03) -Update :
09-Sep-08 14:48 ET In Play Lehman Brothers: Cramer on CNBC says he does not think anyone is interested in buying LEH (8.55 -5.61) -Update : Cramer says it does not have a deposit bank, it is very questionable.. says this has become an extremely speculative security
Here’s a food for thought question on Lehman. Turns out Fuld has let everyone go…maybe that’s one of the reasons the firm is in its spiral.
From today’s (9/9) NYT piece…
“Richard S. Fuld Jr., Lehman’s hard-charging chief executive, has replaced virtually every major division head, including the firm’s president and chief financial officer.
During that time he has replaced the global head of fixed income — the division from which most of Lehman’s problems have arisen — twice.
But with every measure taken, Lehman’s stock price has fallen further.”
There’s a tension here between accountability (it is true, somebody had to pay for this) and sowing the seeds of confusion by having so many people depart the firm that all the internal and external networks are vaporized. Maybe firing all the b***ards isn’t quite the right approach.
Sic transit gloria mundi — Lehman Brothers, 1850-2008