Comments on: How Lehman Was Allowed to Die

By: Veronica M Reimann

Veronica M Reimann — Sun, 28 Sep 2008 00:09:24 +0000

Why do we have to pay for Illegal aliens who have bought homes here they should not have been allowed morgages.

By: Andy

Andy — Sun, 21 Sep 2008 18:23:09 +0000

Welcome to the United Socialist States of America.

Blatant manipulation in the markets, before a very important election in the country..hmmm

By: Jonathan

Jonathan — Sun, 21 Sep 2008 01:42:00 +0000

Great article, Alexis. I agree with most of what you have written, however, i don’t quite understand what you mean when you say “this is how far we have allowed traders and short sellers to unwind our markets”. Really? So it is the fault of the traders for the demise of these companies. Really? These companies were buying and selling junk, and they knew it. These CEO’s are just upset that traders (and yes i am one) knew it all along as well. It is not the fault of the traders that these CEO’s cannot understand or execute simple math skills. They screwed up their own balance sheets, not us. Lehman and the rest of them are just upset because we made money off of them when they could no longer continue. They did the same thing to their counterparties for years. By the way, traders who make money are efficient in risk management, so perhaps the highly compensated CEO’s could learn a little from us. Don’t feel sorry for them, they would break any trader to earn a dollar. As usual, always the fault of the traders. Funny thing is, knowone complains when traders drive up the equity. The investment banks all love that. I don’t like to see anyone lose their job, but nobody guarentees a traders employment either. We are in the results business, and Lehman and the others cannot gain the results. They got exactly what they asked for at Lehman when they levered themselves into the red.

By: Credit rating victim

Credit rating victim — Sat, 20 Sep 2008 09:20:40 +0000

When Lehman filed for Chapter 11 on Sunday,September 14, the long-term Lehman bonds in my portfolio had A+ credit rating issued all the rating agencies that are out there. Why? When was the last time a bank at the edge of collapse was allowed to carry an A+ (long term) and AA (short term) credit quality? Arent’t rating agencies supposed to inform the investors with CORRECT credit quality of a bond issuer in order to give investors opportunity to flee or stay invested?

As for my Lehman bonds : They bit the dust on Monday, September 15, just 7 days before the annual interest pay day (22 Sept.). Alive for 51 weeks, then dead on the final, 52nd week. Thank you! Thanks to FED, Fuld, Fitch, Moody’s, S&P’s, the US Treasury, BOfA, the system, thanks to you all. Now I know you better!

By: Cal

Cal — Fri, 19 Sep 2008 21:30:32 +0000

I’m sorry, but most of America will not feel sorry for any of these guys or gals. Aren’t they supposed to be the smartest people in the room with their Ivy League educations? What, now their kids won’t be able to go Upper East Side private schools or they can’t afford their second or third homes? Or move to Scarsdale or Greenwich?

Heads should roll. There had better not be any mention of bonuses in the next couple of months. I want to hear Blankfein’s and Mack’s compensation. It should be $1.

They sold crap, they knew it was crap. And we go on and on to other countries about “free-market capitalism”. What a joke! And the funny thing is this stuff crops every ten years. The crash of ‘87, LTCM in ‘98 and now the credit debacle of ‘07/’08.

This better be fixed. I’d hate to see another Civil War in this country. I don’t trust this rally. If it peters out, what is next? They have already thrown the kitchen sink at it.

By: Dave, TX

Dave, TX — Fri, 19 Sep 2008 20:02:06 +0000

Alexis

I appreciate your reporting.

I have a question and possible indication of what has happened. I would appreciate your response.

I was a Real Estate Broker for three years and I got out of the business three years ago because I saw this coming.

What did I see? I saw the typical home buyer trying to get a mortgage for their dream home.

Realtors and Mortgage Brokers encouraged homebuyers to buy as much home as they could possibly afford. Was that a hard sale? No.

The typical scenario was a homeowner who had credit card debt and needed to sell their current home to pay off their credit cards. By eliminating the credit card payments they could qualify for a larger mortgage. Millions of home owners have been doing this for years and years.

Then a few years ago President Bush signed into law the new law that prohibited bankrupting on credit card companies and allowed the credi card companies to raise the minimum payment from 2% to 4%. I believe that law created a minefield in the housing market. Some home owners would be able to manuver through the minefield but many would not be so lucky.

So how did we get to the place where there is hundreds of thousands of forclosures?

Yes, the mortgage industry made many bad loans. But in my opinion, the new credit card law changed thousands of marginal home loans into bad home loans. More and more homebuyers failed to qualify for a loan and the law of supply and demand simply operated as usual. Fewer homebuyers – housing prices drop. Housing prices dropped and homeowners were pushed over the edge by their credit card debt and unable to bankrupt against the credit card companies. Thousands of homeowners are left with no other choice but to let their homes fall into forclosure.

When will we learn that credit is not an asset?

I think everybody is going to reap what we have sowed over the years.

Dave

By: Lehman's foreign victim

Lehman's foreign victim — Fri, 19 Sep 2008 18:26:18 +0000

I agree with grwe and LarryS. Why the Fed had such an unfair treament to Lehman? Only two real reasons I can think of. One, Dick Fuld had alienated himself with the Fed in whatever the issues before. Two, Lehman has most of his bundled portfolio sold to other developing countries (I know many in Aisa), so the Fed doesn’t care. A lot of people in developing countries, they poured in all their savings, retirment money to buy just “American” products thinking these are from the most powerful country where if anything goes wrong, the U.S. government will protect their rights. Now their money with Lehman is forzen for 120 days without knowing how small the percentage of their money can be returned to them. Many livies will be affected there too, not just the employee of Lehman (who have been in the top of the pyramid for all these years, so I don’t too worry about them). What role the USA going to play in the world going forward? I can only see the super power world police fighting human rights role is quickly fading away!

Fed, please save Lehman (with tear)!

By: Richard Korsgren

Richard Korsgren — Fri, 19 Sep 2008 18:00:01 +0000

No one seems to understand what is happening. The taxpayer will not bail out this bailout and this not good. We should be paying for our debts as we go. This 1-2 trillon bailout money will go onto our national debt, which is now running wild. One day, the rest of the world will lose faith in the US Government (because of this huge debt) and not buy this debt. Inflow of money will slow and stop. We have abused our financial system and now we are trying to buy our way out with money we do not have. We will be sorry one day but who really cares? Actually, I have heard no one this day even discussing it. We just do not get it!

Richard Korsgren
M

By: Walter

Walter — Fri, 19 Sep 2008 17:12:55 +0000

One can not help but ask “Would Lehman still be around if todays Fed annoucement would’ve been made 1 week ago ?? Would Merrill still be independent ??” Why was Lehman the scape goat as opposed to the
other candidates ?? I don’t have any idea. Seems that most of the investment banks had
risky assets that they probably shouldn’t of had.

I am happy that “shorting” is being evaluated. I find it a very dangerous practice,
and many of the Wall Street firms that employ the strategy to make money are now
getting burned by it. Perhaps its poetic justice ??

I would like to see shorting banned altogether. It is not fair that only the financial companies get this protection. What happens if “shorters” start targeting high tech companies ?? Would we sit there and watch the shorters drive them out of business. Will the Treasury and Fed be there to bail them out ??

We need to get back to a long term investing mentality. If you believe a company is poorly run, don’t buy the stock, or sell the stock you have,
or if you own the stock simply buy some puts as downside protection. The whole idea
of making a quick buck is damaging our financial system. Lets get back to the basics
of building good strong companies with a financial marketplace that wants to support
them

By: bbbeauti

bbbeauti — Fri, 19 Sep 2008 17:06:22 +0000

I think the fed. should not have helped one company (the deal with bears sterns) and not helped anyone else. but then if you look at the top management of Lehman and what they received as bonuses last year, that in itself would have been enough to keep the company going for a bit more. and when it states “bonuses for the employees” like one article said I saw, I can guarantee you very, very, very! little if NONE made it down to the real employees below upper management level.

We keep blaming the sup-prime market, and yes that is a big factor and the brokers who qualified these poor suckers with the first payments and not the increased ARM payments are the biggest instigators…but there are other factors like multi billion dollar bonuses in times where no bonus should be given.