Vladimir Senkov

Lehman and Merrill Lynch Default Risk Charts

Stock is essentially a call option on any retained earnings that may eventually come to be. I guess the time value of this imagined option is diminishing and that explains why the stock trades lower now than it did when the CDSes were at their highs. Can one calculate the "expiration time" for these hedge funds, by that i mean LEH and MER, because that's what they are, after all. I know, i know, they call themselves "financial services companies" but i call anyone who can take positions with unregulated leverage a hedge fund, not because these positions are hedged, but because of the "unregulated" aspect. Can you get a nobel for a formula for calculating the expiration date? Might be useful for people to plan vacations, etc :)