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To: StanX Long who wrote (54635)	10/24/2001 10:58:29 PM
From: BWAC	Read Replies (1) \| Respond to of 70976

Interesting stuff there from Lehman. $25 Million though isn't a whole lot of shares in those 5 stocks. I wonder what prompted this? This is something to keep an eye on. It would seem to me if Lehman brought these notes out at todays prices in a market rally for the 5 stocks, it is quite possible the stocks could fall back some over time, the price of YLO.A fall correspondingly, and the original 8% yield go up due to the falling prices. That would be the time for all of us to jump into this. Although the whole thing is kinda weird? "Lehman said it will use a portion of the proceeds for general corporate purposes and a percentage to acquire common stocks that make up the basket." So how is the note going to equal the basket of stocks purchased if Lehman spends portions of the proceeds for general corporate fluff? "the maturity date, upon which Lehman will pay holders an amount equal to the closing level of the basket, which will be based on the closing prices of the stocks on the valuation date."?

To: StanX Long who wrote (54635)	10/24/2001 11:16:52 PM
From: StanX Long	Read Replies (1) \| Respond to of 70976

No tech rebound seen until late 2002 Study: H-P, Gateway may fall victim to weak PC market PC sales are sluggish, but $300 computers should reach the market by Christmas 2002 and kick-start consumer demand. Oct. 24 — The slump in technology spending is expected to continue until the third quarter of 2002, leading to further consolidation in the computer hardware business, according to a report issued Wednesday. But the “Webification” of corporate businesses, $300 computers and increased penetration of high-speed Internet services are bright spots in an otherwise gloomy outlook. msnbc.com

To: StanX Long who wrote (54635)	10/25/2001 12:54:02 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

That is very interesting. I've been noticing, this year, a variety of companies raising cash, by selling securities that pay interest and are tied to a stock (the interest rates above the dividends paid by the associated stock or stocks). In effect, I think we are seeing a return to the very old-fashioned idea that stocks should pay significant dividends. Even growth stocks. Investors are becoming steadily less willing to accept the idea that future growth should allow a company to not pay dividends now. But, this concept is being applied in a way that creates a bifurcated market. That is, there are still the "second-class" equity-holders, the ones who own the common stock, who still get little or no dividends. And, as this movement takes hold, a steadily increasing fraction of present and future earnings will be dedicated to paying the interest on issues like this Lehman offering, or convertible bonds, or similar instruments. And this will cause a fall (relatively speaking, and perhaps in absolute terms as well) in the common (= low-dividend) stock. Very interesting. The implications ought to be obvious. The smart money should flow into the "uncommon" stock.

To: StanX Long who wrote (54635)	10/25/2001 1:01:05 PM
From: Jacob Snyder	Read Replies (3) \| Respond to of 70976

more thoughts on YLO.A: The other thing this does, is it puts a premium on paying attention and researching. There is a list of questions which need to be answered before investing in this: 1. what are the exact terms? That is, what exactly is the connection between the stocks and YLO.A? 2. who guarantees the terms will be met? That is, if one of the underlying companies goes bust, does Lehman still guarantee payment? What about if Lehman goes under? What is Lehman's debt rating? I know, this isn't likely, but the worst-case needs to be looked at.