Brian Bober

Lehman Is Just the Thin Edge of the Wedge

Nice article. This is a harrowing time to invest and especially trade. Fundamentals are largely out the window; now it depends on what the government will do. It appears Wall Street wants bailouts (more predictable) and Main Street wants laissez-faire (more equitable). I can’t imagine more taxpayer bailouts won’t largely be financed by increased taxes for the wealthy by an increasingly Democratic led Washington DC. That seems predictable and somewhat equitable.

How Lehman is forced to unwind their trading book will have some major reverberations. Hopefully, this won’t entail a CDS tsunami and will wake up the regulators to put CDS on a public exchange like they should have at least a decade ago.

On a related note, I just watched a nervous Merrill Lynch employee run out after a long phone conversation. There are a lot of nervous people these days...