Ishortyou

Lehman Brothers Take-over: Implications for Financials

CDO or any structured finance vehicle i.e. ABS-MBS price, is dictated by supply and demand, right now there is a glut in the market or oversupply of them due to uncertainty of how much toxic waste they contain, once those uncertainties clear up and the housing market recovers no doubt that the 0.22cents of a dollar will be 1.22 cents of a dollar.

Lehman Brothers Take-over: Implications for Financials

No so sure I would be assuming that because Lehman gets valuated to junk all the related financials would be valuated at the same level. Also no so sure about buying Lehman without assuming its obligations, although it can happened I doubt it and if it does margin calls will start to fullfil those obligations before the deal is closed.

Finding Value in the P/B Ratio

Greedy crooks in Banks and Broker firms wrapped subprime, credit cards, bad loans, etc. into structured finance vehicles i.e.: CDO-ABS-MBS-SIVs, they misled the market and bond insurers into these fraud and now everyone is paying the price with losses now the misleds have to clear up their books from that toxic waste!