Kevin Lamson

Reasons to Cheer Lehman’s Demise

I completely agree with the contributor who suggested that politicians and regulators were bought off. I mean come on getting an executive postion with Fannie Mae and Feddie Mac was completely political. Look at the millions Johnson and Raines pulled out of Fannie Mae and Freddie Mac during their "Reigns" over those fiefdoms. Its been reported that Mr. Johnson used Fannie Mae money and spread it around the Beltway like it was his own. He even set up a Fannie Mae foundation to dole out millions to his favorite causes.

Contrary to widespread beleif the U.S. Federal Reserve did take action piror to the crash of 1929 and after the crash. First lowering interest rates to spur the economy then rasing them to sow the economy. These steps resulted in the incredible, for that time,

First it was the end of war-related inflation and booming exports for war reparations, next artificially low interest rates in 1925 and 1927 and booming exports due to a reduced value of the Dollar vs. the Pound. There were major tax reductions instituted by the Republicans under Hoover and finally in June of 1929 an international accord was struck with the Germans (albeit short-lived) over the financing of war reparations, a major issue of the decade.

By Monday, October 28, 1929 the Dow had fallen 20% to 300. It fell 40 more points that day and another 30 on Tuesday (Tragic Tuesday) to reach a temporary bottom at 230.07. It was down 40% from the peak 56 days earlier.

The head of the New York Federal Reserve at the time of the crash, George Harrison, bravely stepped in to provide tremendous amounts of credit to the banking system. This action prevented immediate bank failures and bankruptcies and a total collapse. The market recovered a good bit of ground but began to fall again before year-end. By mid-1930 this liberal credit policy was to be reversed affecting a money supply crisis. Once again the government intervened, but could not stop the bank from failing because people has lost confidence a system which had obviously failed.

It is generally agreed today that the "money supply", which refers to the total amount of money circulating in the economy, should grow at the same rate that the economy grows. Any faster is inflationary and any slower is deflationary. When a bank fails the Fed has the option to either bailout that bank by lending it money or to lend more money to other banks to fill in the shrinkage in the money supply. Otherwise the amount of money in circulation shrinks and the economy limps along like a person parched for water.

I think the Fed has continued to keep the money supply tap open. It just isn't going into some of the Wall Street firms who have betrayed the public's confidence through dishonest and greed driven business practices.

Reasons to Cheer Lehman’s Demise

READ EM AND WEEP AND LET THE CHIPS FALL WHERE THEY LAY!

In my opinion it is high time that these Wall Street executives and their respective firms are exposed for what THEY, not the "shorts", have done to their companies and American finance by playing it fast and loose with the TRUTH. The truth about how much bad debt they flipped into the domestic and international markets and the truth about how much there executives reaped by reporting false profits tied to this mortgage loan flipping scheme. Flooding the markets with phony paper. The American public should be outraged at how our government regulators, politicians and the Bush administration allowed Wall Street to get away with this international fleecing of investors. It is an international embarrassment that America’s bankers ripped off the world in the new "global economy". But, we must now "let the cards read and the chips fall where they may". We need to turn out these crooks, their companies and their disastrous scheme in order in order to regain trust and return international confidence in the American business and banking practices. Not continue to hold our cards and pretend we have a winning hand .

Lehman Files For Bankruptcy

READ EM AND WEEP AND LET THE CHIPS FALL WHERE THEY LAY!

In my opinion it is high time that these Wall Street executives and their respective firms are exposed for what THEY, not the "shorts", have done to their companies and American finance by playing it fast and loose with the TRUTH. The truth about how much bad debt they flipped into the domestic and international markets and the truth about how much there executives reaped by reporting false profits tied to this mortgage loan flipping scheme. Flooding the markets with phony paper. The American public should be outraged at how our government regulators, politicians and the Bush administration allowed Wall Street to get away with this international fleecing of investors. It is an international embarrassment that America’s bankers ripped off the world in the new "global economy". But, we must now "let the cards read and the chips fall where they may". We need to turn out these crooks, their companies and their disastrous scheme in order in order to regain trust and return international confidence in the American business and banking practices. Not continue to hold our cards and pretend we have a winning hand .

Lehman: Is Bankruptcy an Option?

BANKRUPTCY IS OPTION IS lNSOVLENT. HOW EVER PROFESSIONAL FEES TO LAWYERS ACCOUNTANTS MIGHT EXCEED AMOUNTS PAID TO BOND HOLDERS!!!

Over the past week alone, the United States' two main mortgage-finance firms -- Fannie Mae and Freddie Mac, in place of filing bankruptcy, were put into a "conservatorship" under government, while Lehman Brothers Holdings Inc. is now being pushed by the Government into a possible take over by a rival bank and foreign investors, in place of seeking bankruptcy protection. A Bankruptcy proceeding by design would of course require a complete accounting and valuation of Lehman’s various assets to determine the value of assets vs. the liabilities. Heaven forbid anyone knowing what their bonds are really worth!

Even though Bear Stearns, Fannie Mae, Freddie Mac, Lehman Bros, and Merrill Lynch have so far escaped having to file bankrutpcy. If Lehman doeS file the true value of all its assets will be publicly disclosed. Including the value of it mortgage loans. By filing bankrutpcy, their respective shareholder’s will lose what ever value is left of their shares. But the most of the share value has already been wiped out. Despite being repeatedly assured by management in press release after press release that everything was OK. Bankrutpcy professional fees to attorneys and accountants will be sky high.

The stocks of other U. S. financial firms, including savings and loan giant Washington Mutual, Wall Street investment bank Merrill Lynch & Co. and insurance behemoth American International Group Inc. (AIG) have been whipsawed this week as investors fret about further dominoes to fall. Like the airline industry, once a leading financial like Lehman files bankruptcy, we can probably expect other Financial’s to follow. Especially now that Uncle Sam has decided to stopped bailing out these companies with taxpayer’s money. Perhaps the practice of privatizing profits and socializing losses by government bailouts is coming to and end in the USA. Only time will tell.

Lehman: The End Game

FINANCIALS DIDN'T GO BUST FROM SHORT SELLING THEY WENT BUST BECAUSE OF UNDERWRITING BAD LOANS!!!

I don't think the "shorts" created the problems at Bear Stearns, Countrywide, Indymac, Fannie Mae, Fredde Mac or Lehman Bros. I do think that the land office creation of trillions of dollars of bundled mortgages or questionable value that were financed by the sale of bonds to both domestic and international investors is what created the current eccnomic fiasco that we find in.

Just wait till there are fair market valuations done on all these mortgage loans and/or homes that were acquired when the loan defaulted and were foreclosed. I’m pretty sure you will see that there was top to bottom fraud in funding and originating these loans so they could be flipped to investors. Even the conservative Swiss bankers were taken in by these supposedly safe investments. Swiss bank UBS will be reporting another 5 billion in write downs this quarter. U.S Banks, Investment Banks and GSE's Fannie, Mae and Freddie Mac were slow in reporting the amount of defaults in the various loan portfolio's. Some suspect this was to cover up the problem and keep share prices from tumbling. By what has recently transpired this claim of lulling investors by U.S. financial companies appears to be well founded.

I do not see how anyone can vouch for Fannie Mae or Freddie Mac being financially sound when they are publicly reported as being the holders of guarantors of over half of the existing mortgage loans in the USA Which in turn could mean that they own half of lender owned homes, "REO", that have been foreclosed on in the USA. I think these facts should give pause to any prudent investor that Auntie Fannie and Uncle Freddie, Lehman and Merrill Lynch may not be as financially sound as has been suggested by some folks. One can only hope, for U.S. taxpayer's sake, that Fannie and Freddie assets when valued at fair market will be worth not to much less than its liabilities including contingent liabilities from their guarantees. Only time and audits will tell.