The stock of Lehman Brothers has been hurting the past couple of weeks, and Lehman is blaming the shorts:
Wall Street investment bank Lehman Brothers provided information to the Securities and Exchange Commission that could show hedge funds were abusively short selling the company’s stock, according to a report in the Financial Times.
The SEC, in cooperation with Lehman’s top officials, are examining if a group of hedge funds worked together to spread rumors in order to drive the company’s stock down in the last couple weeks, the newspaper said.
There are others however, with a different explanation for Lehman’s troubles, including "Mr. Mortgage": [Hat tip to HLowe for this one!]
It might be difficult for Lehman to demonstrate that the rumors were without foundation.
Oh, this is just priceless. When speculation is bidding a stock up, that’s supposed to be good, but when speculation is driving it down, that’s bad?
These Wall Street m/billionaires and their firms need to wipe their tears, stand up straight, take a deep breath and stop their crying.
Welcome to the REAL WORLD! Where markets go up *and* down. Where, sometimes, speculation drives your price or *or* down.
Just when was it that Wall Street become a blubbering mass of crybabies? GIVE ME A BREAK! We’ve just come off a great bull run, now take the correction like a grown up.
They’ve always been a blubbering mass of crybabies in the bad times, whingeing victims when it comes to regulations, and smug “masters of the universe” when times are good.
NVMike-
You should have seen the analysts complaining a couple of days ago on CNBC about how shorts had manufactured these rumors out of whole cloth to manipulate stocks, and this should be investigated.
Inventing rumors isn’t a practice I condone- but how often have we seen stocks rally on some utterly bogus, “Warren Buffet is about to buy” rumor? Rumor mongering is a grand old Wall Street tradition.
It’s hard for me to get real sympathetic- particularly when it’s not like you can look at Lehman’s balance sheet and say, “Gee, why would anyone badmouth these guys?”
Mr. Mortgage is mildly entertaining at best. He is obviously looking for his 15 minutes of fame. In his comments about Lehman Brothers and Aurora he acts like he discovered some big elaborate and horrible secret about the type of loans they were originating. He presents very minimal facts at best to support his conclusion that Lehman is hiding their problems and really has a balance sheet waiting to explode. If you were to look at the guidelines of each and every player in the AltA market you would find similar or much worse guidelines. What Mr. Mortgage doesn’t seem to be aware of is where those mortgages are at the present time. Lehman did not hold loans as investments on their balance sheet. Other than what they were probably stuck with when liquidity disappeared they sold them either to the GSE’s or in one of several structured vehicles that were distributed to investors. So given Lehmans asset size this is probably not a huge issue. Next Mr. Mortgage points out these horrible loan programs with low FICO and high LTV’s but does he look at what the soft underwriting guidelines were behind these programs ? Does he know how much of each of these programs were originated ? I can tell you that from extensive research which Mr. Mortgage didn’t do (because then he couldn’t jump to conclusions and try to pass himself off as some kind of expert) Lehman’s Alt A originations had average FICO scores above 700. Also many of the riskiest programs he points out had very low levels of actual loan production at Lehman. Oh and by the way other than the 5 year Flex Pay Arms that Lehman originated for very few months they totally stayed out of the Option Arm origination market. Mr. Mortgage failed to mention that on these Flex Arms that Aurora was the only lender from the start who qualified borrowers at a fully indexed payment with maximum negative amortization. Which in simple terms for Mr. Mortgage (so he can understand) is that the borrower had to be able to afford the maximum payment if the worst happened. But don’t confuse Mr. Mortgage with the facts it wouldn’t be as funny. My guess is Mr. Mortgage is an out of work loan hack who made some money originating loans for his friends and now may have to go out and get a real job. Mildly entertaing Mr. Mortgage but you may want to do a little more that review some program highlight slicks. You really do have —- for brains.
yhsfb,
You sound like you worked for Aurora. I have a few friends that were A/Es there for years. I agree their loans were by no means agressive. And they did have good rates among the middle Alt-A programs. I am sure that you are aware that they had planned to reopen in March or April under the Lehman Capital name but that was recently quashed. Middle managers and productive A/Es were on a three month paid vacation until that bit of news came in. The two A/Es I know are now working retail at CountryWide. Ouch.
In the end he said that with a 90k legidimate income, in san francisco, one normally should be able to afford a zero down million dollar house… and with all the credit tightening now, a 20% is required and income needs to be $120k.
Huh??? What happened to the 3.5 times house to income ratio? I think Mr. Mortgage is being pretty nice.
Predators don’t wait for the weak or wounded to die. They attack. Lehman Brothers will just have to take their wounds, get defensive, and try to survive. I hope the lessons my kids are learning from this, sink deep.
Hutch -
Don’t worry, they will. Just like they did for your grandparents
twist -
The white-hats attacked at 3:20 PM 22 Feb 2008 and it was pure gas. I captured the moment here.
http://my.telegraph.co.uk/doomerjohnm/february_2008/ambageddon_delayed_.htm
By the way, this afternoon MBIA lost its Fitch AAA rating. In January that would have been heralded as the end of the world, but now everyone is so numb it doesn’t even make the top five on Google business news.
I’m only half-following this stuff, but it looks like Lehman might hang in there for a few weeks. But what’s happening to WaMu??
I strongly suggest you stop focussing on triviliaties like this–and it is a triviality. Listen up: we have to move from economic/financial policy to social policy. You have to wake up, or you won’t survive. The only story is this one:
“Across the board, businesses have become very, very conservative,” said Joel Naroff, president of Naroff Economic Advisors. More downbeat about their own sales prospects because of cautious consumers, employers are cutting back. “It only makes sense for them to run leaner if we are going into a recession or already in one” as Naroff now believes.
In short, economic activity is declining. Remember:
ECONOMIC ACTIVITY IS DECLINING
The only issue is how to increase economic activity. Economic activity will CONTINUE TO DECLINE until there is a ban on housing evictions. As I have said MANY times, we are going through a Constitional regime change. When will you EVER wake up to this? The only question is, do we get through it with a disaster or without a disater?
Want to get through it without a disaster, or do you have so many irrelevant ideas, fantasies and emotions that you can’t steer clear of the disaster?
If you want to avoid the disaster, there is only ONE way to do it:
ban housing evictions.
The political system is creeping toward this, BUT IT WILL NOT BE FAST ENOUGH TO PREVENT A DISASTER.
So support the New Bill of Rights, move explicitly and forthrightly–and militantly–from the scrutiny regime (see West Coast Hotel v. Parrish) to the maintenance regime, as I have outlined it in my book, John Ryskamp, The Eminent Domain Revolt.
I pay attention to ALL the facts on the ground: not just this housing+finance+petit bourgeois+crypto-fascist neurosis. Make sure you don’t die of that particular disease.
Wake up.
@ jryskmpr, You would have to relieve property owners from paying their mortgages as well, due to tenants not paying rent.
Here is some reading to keep you up at night.
Twist, use your discretion on posting this as it is quite long and perhaps paranoid, but interesting video’s.
http://www.leap2020.eu/GEAB-N-22-is-available!-Global-systemic-crisis-September-2008-Phase-of-collapse-of-US-real-economy_a1298.html
Last week’s session (Th 3/13/08) was only the 6th time in the last 176 years that Congress has closed its doors to the public.
Word has begun leaking that not only did members discuss new surveillance provisions as was the publicly stated reason for the closed door session, they also discussed:
the imminent collapse of the U.S. economy to occur by September 2008;
the imminent collapse of US federal government finances by February 2009;
the possibility of Civil War inside the USA as a result of the collapse;
advance round-ups of “insurgent U.S. citizens” likely to move against the government;
the detention of those rounded-up at “REX 84″ camps constructed throughout the USA (see http://en.wikipedia.org/wiki/Rex_84);
the possibility of retaliation against members of Congress for the collapses;
the location of “safe facilities” for members of Congress and their families to reside during expected massive civil unrest;
the necessary and unavoidable merger of the United States with Canada (for its natural resources) and with Mexico (for its cheap labor pool);
the issuance of a new currency - THE AMERO - for all three nations as the proposed solution to the coming economic armageddon.
Members of Congress were forbidden to reveal what w as discussed.
See House Holds Closed Session to Discuss Surveillance Bill: http://www.huffingtonpost.com/2008/03/14/house-holds-closed-sessio_n_91490.html; House Approves New Eavesdropping Rules: http://www.foxnews.com/printer_friendly_wires/2008Mar14/0,4675,TerroristSurveillance,00.html; International Experts Foresee Collapse of U.S. Economy: http://www.intelligencer.ca/ArticleDisplay.aspx?e=918803
************************************************************************************
See: Beginning of Martial Law: http://www.youtube.com/watch?v=begEaAe4XYE
Preparation of martial law in the USA has begun.
Is our country turning into Fascism? What are WE going to do about it? Can anything below be denied?
1) The president asserts the right to ignore part or all of laws passed by the national legislature.
Use of torture on prisoners.
2) Massive warrantless searches.
3) The president and other officials regularly lie to you.
4) Fraudulent election counts.
5) Government monitoring of letters, emails, phone calls and checking accounts.
6) Secret courts.
7) A government subservient to the interests of the country’s largest corporations.
9) Courts that support presidential use of unconstitutional powers.
10) Massive spying on citizens, especially those involved in political dissent.
11) A government that uses words like democracy, freedom and peace while engaging in acts dramatically at odds with such words.
12) Government agencies or officials declaring themselves exempt from portions of the law or constitution.
13) Creation of watch lists, no-fly lists and similar exclusionary documents.
14) National ID cards.
15) Growing number of citizens incarcerated for a growing number of offenses.
16) Massive use of cameras to spy on citizens.
17) A media supportive of, or obsequious towards, the government in covering its police state activities.
18) Security bubble around government leaders’ public appearances including pre selected audiences and limit on proximity of protests.
19) Disarming of citizenry.
20) Dissent characterized as disloyal by government and its supporting media.
21) Increasing government control over private behavior.
22) Lack of legal recourse to stop illegal government actions.
23) Prison without trial and arrests without charges.
24) It is difficult to borrow books from libraries pertaining to controversial subjects such as fascism.
25) Transfer of powers from legislatures to executive.
26) Assassinations of popular public figures.
27) Expansion of prisons and laws that lead people to prisons.
28) President claims right to make war whenever he wants.
29) Words misused to mean their opposite: i.e. peace for war, democracy for fascism.
30) The president sets himself up as the sole moral authority for the entire country, using his personal beliefs as the basis on which to declare what is ‘good’ and what is ‘evil.’
31) Federal takeover of functions formerly considered essential state o r local responsibilities such as state militias and public education.
32) Creation of a mercenary military force used for foreign and domestic purposes.
The concentration camps have already been built HERE IN America.
FEMA Concentration Camps: Locations and Executive Orders http://www.mindfully.org:80/Reform/2004/FEMA-Concentration-Camps3sep04.htm
Un hidden Agendas: Off To Camp FEMA http://www.youtube.com/watch?v=ZTvPljNxYTI&NR=1
Detention Center, concentration camp? http://www.youtube.com/watch?v=Bqi123hBw2A&NR=1
Concentration Camps being built for U.S citizens http://www.youtube.com/watch?v=dJBxdRIQx7Y&NR=1
Concentration Camp In Texas http://www.youtube.com/watch?v=TxYxTly-yo8&NR=1
FEMA Camp with Better Quality Video http://www.youtube.com/watch?v=l0pfGOH4uxA&NR= 1
FEMA Camp Footage (Concentrations Camps in USA) http://www.youtube.com/watch?v=0P-hvPJPTi4&NR=1
Beech Grove Indiana FEMA Camp - April 5 2006 http://www.youtube.com:80/watch?v=v9Ut-t7k_zY&NR=1
NEW WORLD ORDER OF FEMA CONCENTRATION CAMPS IN USA EXPOSED http://www.youtube.com/watch?v=HnlKg5ZXPu0&NR=1
FEMA camp Chicago http://www.youtube.com/watch?v=I0da_83BzqM&NR=1
Admin Edit: Slight edit
jryskmpr, needless to say many of us disagree.
Imagine you’re a landlord, and now you can’t evict the tenant - would you ever rent a place to anyone again, knowing they can decide to stop paying and you’re just screwed? Or were you saying only to ban evictions for housing gamblers who bought more than they could afford, or just decided to stop paying, in which case I guess primarily the banks are the landlords here, and who will then similarly alter their lending practices sufficiently to ensure security? Or is your idea to eliminate private property ownership anyway?
Give it up.
Igor’s word: noclue
“Imagine you’re a landlord, and now you can’t evict the tenant - would you ever rent a place to anyone again, knowing they can decide to stop paying and you’re just screwed? Or were you saying only to ban evictions for housing gamblers who bought more than they could afford, or just decided to stop paying, in which case I guess primarily the banks are the landlords here, and who will then similarly alter their lending practices sufficiently to ensure security? Or is your idea to eliminate private property ownership anyway?
Give it up.”
This is exactly the uninformed nonsense I am talking about. Talk to any tax lawyer about the way housing is structured to make it an attractive investment. Every investment specialist knows that this country has WAY overinvested in housing, in order to satisfy various political arrangements. Now we have a monstrous white elephant housing establishment to try to maintain. Your absurdly trivial approach is wrecking the country.
Readers, can you imagine JimAtLaw in charge of a country with an enormous unemployment rate and housing eviction rates spiralling out of control? He would be strung up by a howling mob. It’s tiny-minded people like you who have destroyed this country. Watch out!
Give it up–give up your part in the corrupt society, give up your ignorance, give up your neuroses. Mature.
If you want to avoid the disaster, there is only ONE way to do it: ban housing evictions.
Wrong.
The concentration camps have already been built HERE IN America.
Here come the kooks.
Wow. . . listen to the damage on this former model home built in 2003 in Surprise, AZ:
“Large home former KB Home model is a true fixer upper. Please use your imagination & your power tools for this one. Nice floorplan with very large bedrooms. Gas fireplace in master bedroom. Corner lot with Pebble Tech pool. Buyer to verify all facts. This home has serious potential! This home will not go FHA, VA due to damage. If you have conventional financing, please speak with your lender as this home is basically a shell with excellent curb appeal-it is not 95% complete. No a/c’s, cabinets, countertops, fixtures, appliances, stair railings… NOTHING. Pool will need to be replastered.” You will need new flooring, drywall, paint, etc….
MLS # 2964775
14244 N 136th LN Surprise
For NVmike
The Bilderberg group.
An interesting listen.
http://www.informationclearinghouse.info/article19016.htm
Wow. The consipracy theorists are out in full force today. I guess the grassy knoll got a little overcrowed here in Dallas.
I guess I should take it a little more seriously. I mean, not just any joker with a camera can post on YouTube.
No wait - yes you can. I guess I’ll need to see some real proof on Wikipedia before I’ll believe it.
Hi all…I will be back tomorrow morning to defend myself and enlighten a few who sound like they need enlightening.
Mr Mortgage
Oy. What a nice “mature” way of personally attacking me while completely ignoring the substantive questions you can’t answer! Signing off now…
Funny thing is that there is some truth to these “conspiracy theorists”. Look at the changes in the government over the past decade or so and you’ll see what I mean. In terms of housing, Lehman’s aint the first one or the last. The worst, I’m afraid is yet to come.
Regards,
Rob
http://www.battlecall.com
Hey guys-
I lost my internet in LV [No, I didn't pawn the laptop!]so I’m just back and checking my inbox…
Funny thing is that there is some truth to these “conspiracy theorists”.
That’s typical. All conspiracies rely on a kernel of truth to sell their garbage to the weak-minded and uninformed.
Even the digustingly slimy holocaust deniers use this strategy.
jryskmpr,
NVmike is correct. Banning housing evictions would mean the end of our country. Not the end “as we know it”, simply the end.
You’ve been proven incorrect many times over on here, yet still attack people who disagree as “uninformed”. Remember, when you point a finger at somebody, 3 more are pointing back at you.
correction, I mean JimAtLaw. That’ll teach me to build 2 computers while surfing on a third.
(no offense NVmike :))
Opinions vary greatly when it comes to OUR future. I read the opinions of people like Charles Morris, Nouriel Roubini, and many others. As I read, I become more and more concerned.
As I follow the current and forecasted collapse stories I find the unusual opportunity to get first-hand input from a prominent, solidly respected banking attorney. During these conversations my heat begins to race, I feel flushed, and panic begins to set in as we address actual specifics, real numbers, and his strong opinion. I say to myself “this guy is not a kook, certainly not an idiot, he seems so incredibly stable, and my fear grows.
As for myself, I am a guy that sat in a room in with 20 others and was the center of attention when I called the dot.com hype a bust waiting to happen. Not one single person agreed yet I could see no REASONABLE way it could continue. I am also the one that said get out of Las Vegas housing in November 2004, and was questioned “why are you selling…why would you ever sell” more times than I could count as I commenced selling in 2005.
Opinions vary greatly and I respect all opinions. People need to act according to their belief and plan as they see fit.
As for myself, I am unwilling, based upon my own opinion and belief, to call anyone a nut case as this stage. Personally, I don’t see an orderly unwinding of OUR current situation. I plan accordingly and others should also plan according to their individual perspectives.
I pray that I am wrong in my opinion and views of the future.