Market Currents

• Monday, September 29, 2008

• 12:02 PM Lehman Bros. (LEH) has found a buyer for its Neuberger Berman unit: the team of Bain Capital and Hellman & Friedman will pay $2.15B. [WSJ] Comment!

• Friday, September 19, 2008

• 20:31 PM Can Lehman (LEH) creditors recover Dick Fuld's pay? "Bankruptcy law allows recovery of compensation paid to insiders if the company didn't receive reasonably equivalent value ... The value of the services of a CEO who runs a company into bankruptcy is less than $34 million." Comment!

• Thursday, September 18, 2008

• 14:23 PM Bank of New York Mellon's (BK) institutional money fund has fallen below $1. The fund's investments in Lehman (LEH) are blamed. Comment!
• 12:16 PM Lehman's (LEH) bankruptcy, and a continuing deterioration in the fundamentals underlying structured finance instruments will lead to a new $500B+ wave of writedowns, S&P says. Comment!

• Wednesday, September 17, 2008

• 12:01 PM OTC markets and exchange-traded markets will see trading volumes shrink following the evaporation of hedge-fund heavy hitters Lehman (LEH) and Merrill (MER), KBW says. CME -6.6%. ICE -8.6%. NYX -2.2%. Comment!
• 11:33 AM Vanguard, one of the largest U.S. mutual fund managers, says it's confident in the stability of its money market funds. Yesterday, one of the oldest money funds broke the buck due to losses on its Lehman (LEH) assets. Comment!
• 08:11 AM Barclays (BCS) may not be done with Lehman (LEH). President Bob Diamond: "We wouldn't want to miss the opportunity to also add some of the talent from the U.K. and Europe to that team." Comment!
• 07:58 AM Barclays (BCS) says all units remained profitable in July and August; slightly lower profits were due to usual seasonality. BCS also bought Lehman (LEH) assets for $1.75B. Shares +8.4% premarket. Comment!

• Tuesday, September 16, 2008

• 18:18 PM It's been revealed that on Monday JP Morgan Chase (JPM) advanced $87 billion to units of bankrupt Lehman Bros. (LEH) to prevent disruption in trading markets. And that today, the Federal Reserve of NY paid JPM back. On Tuesday, JPM advanced another $51 billion. This is according to documents filed in bankruptcy court. Comment!
• 14:49 PM Barclays (BCS) CEO Bob Diamond has just addressed Lehman (LEH) NY employees. CNBC is reporting that Barclays is buying Lehman's investment bank and capital market group - and possibly its HQ - for a rumored $2 billion. Comment!
• 12:36 PM FT is reporting that Barclays (BCS) and Lehman (LEH) have reached agreement on the sale of Lehman's core U.S. broker/dealer operations. Discussions for purchase of other units still ongoing. Comment!

• Monday, September 15, 2008

• 16:05 PM Lehman (LEH) -95% to $0.19. Merrill Lynch (MER) +0.1% to $17.06. Bank of America (BAC) -21.3% to $26.55. AIG (AIG) -60.8% to $4.76. BAC's offer of 0.8595/share is currently worth $22.82 to MER shareholders. Comment!
• 14:32 PM An AIG (AIG) failure could be a much bigger problem than Lehman (LEH), currency strategist Andrew Resnick says. "If AIG cannot sell assets, a ratings downgraded would trigger a collateral call from debt investors who bought credit default swaps," leading to a mass selloff. Comment!
• 13:13 PM Lost in all the cries for Lehman (LEH) to go under is a recognition of the risks and damages its bankruptcy creates - and the understanding that either way, Lehman will be bought. Comment!
• 12:37 PM Even if the immediate systemic risks posed by Lehman's (LEH) failure are contained, Oxford Analytica writes, economic recovery is at best a year away. In the meantime banks and financial firms face further write-downs, greatly increasing the chance of more failures. Comment!
• 11:59 AM JPMorgan estimates banks' counterparty exposure to Lehman (LEH). Deutsche Bank (DB) leads the pack with a screaming $1.4T. Comment!