European Tribune - Comments - Lehman: more socialising the losses of the rich

Lehman: more socialising the losses of the rich | 200 comments (200 topical, editorial, 0 hidden)

Re: Lehman: more socialising (none / 1)

What's amusing to me is that, if Barry Ritholz is to be believed (and, personally, I'm a fan), Lehman is actually being punished for not being as reckless as Bear.

Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin

by Drew J Jones (myfriends@thisispancakes.com) on Sun Sep 14th, 2008 at 01:28:07 PM EST

Hard to say (4.00 / 2)

They did not tinker in the same instruments, but they have a lot of real estate sludge, and were just as highly overleveraged, which is the heart of the problem.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun Sep 14th, 2008 at 01:48:44 PM EST
[ Parent ]

Re: Hard to say (none / 1)

True, but isn't it also the case that Bear's garbage was much more spread out (among the hedgies, etc)?

Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin

by Drew J Jones (myfriends@thisispancakes.com) on Sun Sep 14th, 2008 at 01:57:28 PM EST
[ Parent ]

Re: Lehman: more socialising (4.00 / 3)

Um, as I suggested in the Salon, Bear seems to have had its fingers all over the credit-default-swap pie and its failure would have triggered default clauses in assets on everyone's balance sheets. It appears Lehman basically kept the lower tranches of the subrpime CDOs it originated on its books, either by choice or because they couldn't find a sucker to buy it.

So Lehman failing is unlikely to trigger a cascade of writedowns in other financials' balance sheets, while (or so the story goes) Bear would have taken at least J P Morgn down with it.

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

by Migeru (migeru at eurotrib dot com) on Sun Sep 14th, 2008 at 03:13:48 PM EST
[ Parent ]

Lehman: more socialising the losses of the rich | 200 comments (200 topical, 0 editorial, 0 hidden)

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