siegfried

Lehman: ‘Creative’ Financing Rides Again

giving an investment banker access to the Fed window is like giving a crackhead access to a cocaine mine.

Smelling a Short-Squeeze in Lehman

it's what they teach in business school all the days--i rounded some of the numbers--and it's called "riskless arbitrage". the wall street journal article today that details how LEH is putting bad loans to the Fed (i.e. US Taxpayer) is another example of arbitrage. Bet the quant that figured that one out will get big cash bonus. Rest of us get el shafto taxero.

Smelling a Short-Squeeze in Lehman

didn't LEH just sell $5 billion of 7.25% preferred converitbele into $50 stock non callable for 5 years? Let's see--7.25 * 5 = 36.25 simple %. $50 - (36.25 * 50) = $42. So short LEH to $42, long the preferred, you're hedged to $42, let the upside run. Unless LEH goes bankrupt which is impossible since they have access to Fed window but no minimum capital rules. Thanks Ben Bernanke! And don't you fret none about the poor folks, they can manage to buy $5/gallon gasoline to get to the supermarket to buy $4/loaf wonder bread.

6 Questions on the Relationship Between Investment Banks and the Fed

Last 2 Fed Reserve CMBS for Treasuries indicate rising demand to dump paper for cash--at higher interest rates

Release Date: April 8, 2008
For release at 10:00 a.m. EDT

On April 7, 2008, the Federal Reserve conducted an auction of $50 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:

Stop-out rate: 2.820 percent

Total propositions submitted: $91.569 billion
Total propositions accepted: $50.000 billion
Bid/cover ratio: 1.83

Number of bidders: 79

Bids at the stop-out rate were prorated at 67.70% and resulting awards were rounded to the nearest $10,000 (except that all awards below $10,000 are rounded up to $10,000).

The awarded loans will settle on April 10, 2008, and will mature on May 8, 2008. The stop-out rate shown above will apply to all awarded loans.

Release Date: March 25, 2008
For release at 10:00 a.m. EDT

On March 24, 2008, the Federal Reserve conducted an auction of $50 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:

Stop-out rate: 2.615 percent

Total propositions submitted: $88.869 billion
Total propositions accepted: $50.000 billion
Bid/cover ratio: 1.78

Number of bidders: 88

Bids at the stop-out rate were prorated at 98.87% and resulting awards were rounded to the nearest $10,000 (except that all awards below $10,000 are rounded up to $10,000).

The awarded loans will settle on March 27, 2008, and will mature on April 24, 2008. The stop-out rate shown above will apply to all awarded loans.

Lehman's Preferred Offering: Bullish for Stocks

giving investment bankers access to the Fed is like giving a crackhead access to a cocaine mine.

3 Reasons To Be Bullish on the Investment Banks

What's to keep the investment banks from creating more ABS and sell them to the Fed at par? It seems like the Fed is guaranteeing profits, isn't it?

Financial Stocks Respond to Fed Move

mtrader i hope you protected that gain by selling off those picks