Gary Millichip

Debating the Lehman Collapse

I agree that a lot of what Lehman is facing could have been prevented had Lehman been more transparent regarding their numbers. Keeping shareholders in the loop with developments would also have been a good idea instead of the long periods of silence.

However, if Lehman is to fail which looks very likely, then the SEC/Fed/Shareholders are effectively condoning irrational activity based on pure speculation. Financial statements indicate the company is solvent. Auditors have signed off on these statements. So there is no logical reason to explain the massive drop in the share price which in turn has caused rating agencies to place Lehman under immense pressure to do a deal. This is turn results in less value placed on Lehman's assets from a fire-sale perspective.

One can only hope a third party other then BAC/Barclays sees the inherent value in Lehman and invests in Lehman to pull them through. This will kill off all those that brought down the share price in anticipation of failure and will indicate that the market does not appreciate illogical activity like this. Otherwise where will the madness end?