If Lehman's assets get written down by 10%, then $30bn unsecured debt doesn't get paid and Citi loses $27bn out of $90bn (market cap). So Citi's shares would go down by 30%.
If Lehman's assets get written down by 20%, then that's $80bn unsecured debt unpaid, of which Citi eats $72bn (80% of Citi's market cap).
And if Lehman's assets get written down by 25% or more, that's it for Citi.</speculation> A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
All depends on the Bankruptcy work-out.
However, the other debt is small enough that "getting the shaft" is unlikely to topple the others. It's the $138bn figure that stands out. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
At least until they have to do some debt roll-over.
Then ... who knows?
That's what I mean by "unusual consideration." I'll give it --facts available to the public-- some thought, then report. Diversity is the key to economic and political evolution.
Frankly, not Bush. Sorry, that freak is a "comma" in the scheme. The electorate will continue to seat their hoary jackasses despite it all and expecting somehow a different result ... Diversity is the key to economic and political evolution.
The loss depends on the terms of the Bankruptcy proceedings and how much 'Good Stuff' (positive Cash Flow instruments) there is in Lehman.
