prescient11

Richard X. Bove on Lehman: An Assault on Reason

Charlie, thanks for your response. Fair enough, then I misunderstood the purpose of your article. I would point out however that liquidity is not an issue for LEH, thus, theoretically they can continue to prop up their balance sheet through the Fed window.

This is much different than BSC. Therefore, they do not necessarily have to liquidate very solid assets at below fire-sale prices. LEH's mortgage book is supposed to be much better than most on the street. Perhaps that's not saying much, but they do have very solid assets with which to work with.

I think that perhaps a well-capitalized institution that can handle some of LEH's junk could make a great deal to try and snap up some of LEH's valuable assets and just hold on to the rest. Obviously, I agree that they couldn't just sell the good ones and not be on the hook for the rest, but at current valuations I think the idea of being the "savior" is not a bad one for entry into one of the IBs. In other words, I think that LEH's book is likely manageable by an institution with solid capital.

I am not as optimistic that July 15th was the bottom for financials, but I hope that you are right. I would also refer you to DoubleAA's comment regarding Fuld purchasing shares. Let's just say that when you're trying to shop the company it is a very difficult legal situation as an insider to purchase shares. Cheers.