Say what?

by flory

Per The Paper of Record - the latest victim of Big Shitpile is Lehman Brothers. 168 years of good honest American laissez faire republicanism going down the tubes. But hark! They can fuck the little guy yet one more time before going into that good night.

The Securities Investor Protection Corporation would handle the liquidation of such brokerages, and bankruptcy lawyers say that customers are likely to receive their holdings back.

What does that that 'are likely' mean? My guess is that if you're CalPers or the Florida State Retirement System and you've got some holdings at Lehman, you'll probably get your account settled at par. If you're Jill Smith? Sucks to be you. If Lehman runs out of holdings -- you're most probably fucked. So sorry.

Comments

[DrDick]

Hear, hear, old chap. Life just wouldn't be worth living if you couldn't screw the proles one last time.

[Jill Smith]

This is just one more way in which it sucks to be me.

[Dave]

And that, ladies and gentlemen, is why I continue to NOT invest in the stock market.

[Jemand von Niemand]

From The Big Picture; Barry Ritholz liveblogging the CNBC Sunday coverage of the Lehman fire sale:

Nouriel Roubini says all independent B/Ds [Broker-Dealers] are toast, they are highly leveraged, and their business model is fundamentally flawed. Financials [i.e., financial stocks] facing a "disaster"; bankruptcies, Broker-dealers "are going to disappear."

It's a fundamental, radical change on Wall Street. Expects WaMu to go under, says AIG is in trouble.

Nouriel Roubini, Professor of Economics at New York University, iused to be a joke among the Masters Of The Universe who populate the trading floors at places like Lehman's. After accurately predicting the effect of the housing and mortgage sectors on the overall economy, Wall Street and other economists don't laugh at him any longer.

Roubini has a new post up at rgemonitor.com:

It is now clear that we are again – as we were in mid- March at the time of the Bear Stearns collapse – an epsilon away from a generalized run on most of the shadow banking system, especially the other major independent broker dealers (Lehman, Merrill Lynch, Morgan Stanley, Goldman Sachs).

If Lehman does not find a buyer over the weekend and the counterparties [i.e., other banks and investment houses who have ongoing business with] Lehman withdraw their credit lines on Monday (as they all will in the absence of a deal), you will have not only a collapse of Lehman but also the beginning of a run on the other independent broker dealers (Merrill Lynch first, but also in sequence Goldman Sachs, and Morgan Stanley, and possibly even those broker dealers that are part of a larger commercial bank -- i.e. J.P. Morgan and Citigroup).

Then, this run would lead to a massive, systemic meltdown of the financial system. That is the reason why the Fed has convened in emergency meetings the heads of all major Wall Street firms [i.e., Lehman's couinterparties] on Friday, and again today, to convince them not to pull the plug on Lehman, and maintain their exposure to this distressed broker dealer.

BENDER: Yep! We're boned.