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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (10266)	10/11/2008 10:20:32 PM
From: pogohere	Read Replies (2) \| Respond to of 33421

"Of course that also means the banks, funds and insurance companies that sold it are out $365 billion, which is the difference between the price of Lehman's bonds as set in the auction and the remaining 91.375 cents in face value." Is there a net loss of $365 bil that accrues to some entities?

To: Hawkmoon who wrote (10266)	10/12/2008 9:48:37 AM
From: robert b furman	Read Replies (1) \| Respond to of 33421

Good morning Hawk and John, Interesting that this auction went so smoothly - I assume GS will not go broke Monday morning. If I recall from past posts 8% of the CDS's were mortgage related. If 400 million caused 8 billion - then extrapolating (that mey not be the correct way to look at it) would give us: 61 trillion times 8% gives us 4.8 trillion in realestate. Lehmans loss 400 million divided by the settlement loss of 8 million = 2 percent. 2 percent times 4.8 trillion = .096 trillion. This is a global problem and so is the CDS market. The USA has bucked up 700 billion which now looks to be injected into banks vs TARP repurchases.Which copies the Brits and I like the idea better than Paulsons save the investment banks idea. so help me here with my zero's .096 trillion equals 960 billion - not too far off from the total problem. Foreign banks need to soak up 260 billion and the world has been saved? Wonder when the trillions lost in stocks get built back up? My bet is it will go back up as fast as crude has collapsed. pretty darn fast. Bob