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To: NucTrader who wrote (362389)	3/15/2008 9:31:48 AM
From: Real Man	Read Replies (1) \| Respond to of 436258

BSC is not the only hole, they are dealing with increased systemic risk, and the dummies just drained liquidity.

To: NucTrader who wrote (362389)	3/15/2008 10:32:41 AM
From: Pogeu Mahone	Respond to of 436258

It will take more then a finger to plug this hole: liveleak.com ------------------------- yeah, I'm thinking: how many fingers does the Fed have? How many toes? If BSC is the only hole in the dam, they're OK...

To: NucTrader who wrote (362389)	3/15/2008 10:39:26 AM
From: Real Man	Read Replies (1) \| Respond to of 436258

There are a few more holes - WAMU, LEH, CITI, and MER. bloomberg.com Lehman Brothers, the largest underwriter of U.S. mortgage bonds, tumbled $6.73, or 15 percent, to $39.26 after it obtained a $2 billion credit line from 40 banks. Implied volatility, a measure of how much investors are paying to insure against further stock-price losses, for Lehman options more than doubled. Bloomberg: March 14: Lehman Brothers, largest mortgage underwriter in U.S., obtained a $2 billion, unsecured, three-year credit line from 40 banks. "The unsecured facility replaces an existing credit line"; JPMorgan and Citigroup led the effort. Reuters: CDS spreads spiked to 465bp after Bear announcement, most among investment banks. Fitch (via RGE): At the beginning of the turmoil Bear Stearns had the highest toxic waste ("residual balance") exposure as percent of adjusted equity on balance sheet: BSC = 54.5%; LEH = 53.3%; GS = 21%; MER = 17.8%; MS = 8.3%. Cumberland: Main difference to BS: Lehman generated over 60% of their revenues outside the U.S. in Q4 2007 Fahey (Fitch): Lehman Brothers reported Level 3 assets-to-equity of 1.68x in 3Q07 (BSC 1.56; GS 1.84; MER 0.70; MS 2.74: gross notional Level 3 asset value, not netted with derivatives hedges in Level 1 or 2 as reported by other banks) Hedges on Level 3 assets (i.e. "short their own instruments") produced book gains of $750m at Lehman (largest amount among 5 brokers) but Fitch decided that gains from credit spread widening will not be considered in evaluating operating performance --> Gains from structured notes spread widening as percentage of pre tax earnings was 62% at Lehman in Q3; 129% at BS; 7% at GS; -17% at ML; 17% at MS.