Richard Fuld - Walks away with 500 million

Lehman Brothers was the largest US Bankruptcy at $691 Billion dollars.
The CEO; Richard Fuld, walked away with around 500 million dollars.
This video is just a reminder as to how truly messed up things were less then 2 years ago.

Richard

Richard Fuld - Walks away with 500 million

Lehman Brothers was the largest US Bankruptcy at $691 Billion dollars.
The CEO; Richard Fuld, walked away with around 500 million dollars.
This video is just a reminder as to how truly messed up things were less then 2 years ago.

Richard

SIPC and LEH bankruptcy

From the SIPC website.

WASHINGTON, D.C. - September 15, 2008 – The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, issued the following statement this morning in relation to reports about the bankruptcy filing of Lehman Brothers Holdings, Inc.

SIPC President Stephen Harbeck said: “SIPC has not initiated a liquidation proceeding against the broker-dealer Lehman Brothers Inc. and we do not currently anticipate doing so. As of this morning, it appears that all customer cash, stocks and other securities are accounted for.

It is important to understand that the holdings of broker-dealer Lehman Brothers Inc., would not be directly impacted by a bankruptcy filing at the separate entity Lehman Brothers Holdings, Inc.

Should the situation at Lehman Brothers Inc. change in some material way not now anticipated by SIPC and regulators, we will, of course, intervene as necessary to protect the cash and securities of customers. However, I want to underscore that such an action is considered unlikely at this time.

SIPC is working closely with the U.S. Securities and Exchange Commission (SEC) to monitor the situation at Lehman Brothers Inc.

The Securities Investor Protection Corporation remains vigilant and committed to our core mission: When a brokerage firm is closed due to bankruptcy or other financial difficulties and customer assets are missing, SIPC steps in as quickly as possible and, within certain limits, works to return customers' cash, stock and other securities. Without SIPC, investors at financially troubled brokerage firms might lose their securities or money forever or wait for years while their assets are tied up in court."

What happens if my Broker goes bankrupt?

Your stock portfolio holdings or mutual fund value depends on the stock market values of all the stocks held in the fund, so you are fine unless the US stock market crashes. If your Broker files for bankruptcy over the weekend and you can't trade because your broker is out of business, you should be able to transfer your holdings to another broker.

If your broker goes bankrupt then the SIPC (Securities Investor Protection Corporation) will replace up to $100,000 in cash and $400,000 in securities. SIPC is a nonprofit, private organization that insures the assets of customers of broker-dealers registered with the SEC (Securities and Exchange Commission) . To see the fine print check the SIPC website.

This leads into the question, what happens if my bank goes bankrupt? You are insured up to $100k as long as the Bank if FDIC insured. However, do you want to deal with the hassel of waiting in line if there is a run on your bank. The strongest survive theme applies here too, WaMu customers are leaving and going to Bank of America.

What happens if AIG goes Bankrupt? Your broker is suppose to have reserves set aside encase they go belly up. If the reserves are not big enough to handle the claims, then there are state guaranty funds that should cover the claims. To see how much your covered by your state if your broker fails, check the Annuity Advantage Website.

To see the fine print on the Guaranty laws check the The National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) website.

Are LEH and WM headed for Zero?

Mortgage rates have spiked lower dramatically.
How low will mortgage rates go? When the 2yr treasury note is yielding 1%, maybe we'll be closer to the bottom.
ZB is grinding higher, yields continue lower, and more financial stocks like LEH and WM go lower. You have to question the drop in yields in conjunction with the weakness in these stocks. Is the price action suggesting one or both of these stocks will go under. And if these companies go under what effect will this have on US treasuries. Definetily a spike lower will occur just like we saw with the Bear sterns bailout. The question is, if and when will it happen.
What are blogs saying about FRE, FNM, LEH, and WM?

Crude Oil Spike

I wonder how many shorts shit their pants on the close in Crude Oil. If I was short on that trade I would have had a heart attack.

For all you bulls, you can thank LEH for the afternoon rally.

The intraday trends in LEH look awesome to trade.

On Suicide watch we have LEH, FRE, FNM, LM, and C to name a few.

GS has been holding up relatively well. If GS breaks to the downside, prepare for all hell to break loose. When even the best is getting sold, you know the market is going lower.


CME is at its 61% Fib retracement. If we don't bounce here look out below.

LEH

Update- Sold my YM longs for small gain. I want to be flat ahead of retail # tomorrow. I'm looking at the charts and thinking LEH will gap down tomorrow. It's time for the call of the warriors...Lets hope we don't get fu....



LEH and the financials got the crap beaten out of them. LEH was downgraded again.
I probably did the dumbest thing ever, but I went long LEH near the end of the day.

I'm looking for a bounce to 12200 on YM, and a bounce on LEH to 26-28. Both charts look like death, I may take a loss on both. I'm still hearing that no one wants to buy financials as they are all making new lows. The major trends are still in place (short financials, long oil).





My simulator acct is doing really bad because of my AMR holdings; however, AMR is a long term hold that I'm giving at least 3 months to play out if not longer.



Here are the results of the Airlines Poll, the majority of people think the airlines are screwed, which indeed looks that way. AMR is at $6.15, down a dollar from last week.