Live Blogging CNBC Lehman Show
click for updated futures
Dow Futures down 294; SPX Futes off 37; Nasdaq off 41; Weak, and heading back towards the lows.
>
I have a busy day tomorrow, and I am toast. OPEN THREAD IN COMMENTS (play nice)
That's all she wrote!
~~~
Don Drapkin of Lazard states two things: "The Merrill Lynch deal is terrific for the market, and comes out in favor of the short selling rule, blasts ending the uptick rule." Dylan asks him about leverage, and he says "We have a sound financial system."
Wow, totally empty apohorisms, zeroi value added. Thanks for nothing, Don.
~~~
Gasparino redeems himself, discusses Fuld's (now obviously) false statements, saying Lehman's capital is sufficient
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Maria Bartiroma says Paulson did not pressure MER into a sale; Merrill BoD voted unanimously for the deal. Maria says AIG and LEH frightened MER into selling itself tonite; Private Wealth Business retains the Merrill Lynch name.
Maria says there was a heavy short interest in MER at $15, but that makes no sense to me
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Vince Farrell is accentuating the positive
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Still waiting for a Treasury Press Release;
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SEC: Statement Regarding Recent Market Events and Lehman Brothers
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Fox, meet henhouse: Dylan Ratigan essentially calls Harvey Pitt a corporate tool. Pitt, who actually is a corporate tool, fails to acknowledge the slur. Back when Harvey Pitt was SEC chair, he said the markets were a better regulator of companies than the SEC. For a smart guy, he is a total idiot.
Pitt is discussing competition.
~~~
Understated headline of the night: Financial-Sector Distress Likely to Hold Back Stocks (WSJ)
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David Kotok says "Look out below."
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Lehman Said to Prepare Bankruptcy as Buyers Withdraw (Bloomberg)
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Nouriel Roubini says all independent B/Ds are toast, they are highly leveraged, and their business model is fundamentally flawed. Financials facing a "disaster"; bankruptcies, Broker-dealers "are going to disappear."
Its a fundamental, radical change on Wall Street. Expects WaMu to go under, says AIG is in trouble.
~~~
Gold rallies (Up $21, but it was much higher before)
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AIG CEO turned down PE money, and turns to the Fed. (The currently cannot tap the Fed). AIG Scrambles to Raise Cash, Talks to Fed
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U.S. Opts to Avoid Lehman Rescue
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CNBC reports that the Fed told Merrill Lynch to "Sell it self" and MER has been shopping itself for a few days.
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FT: Hubris – is thy name Richard Fuld?
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Oil is under $100; trading at 99 change.
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Fed Plans Expanded Lending Facilities
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WSJ reporting Bank America/Merrill deal is done at roughly $44 billion.
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The Lehman panel itself is an incompetent parade of horribles, and none of them have any business being there. Harvey "make the SEC toothless" Pitt, Bill "thanks-for-the-bailout" Gross, and Charlies "Dick-Fuld-is-AWESOME" Gasparino.
Love it that they brought on Bill Gross and Harvey
Pitt to discuss LEH — the irony’s exquisite. Not to mention Gasparino,
but that’s just icing on the cake. (I contacted CNBC earlier and
offered my services)
~~~
Vince Farrell says Bank of America is not stupid. He's wrong, their management has made some rather stupid moves -- how about their purchase of Countrywide? That was $4 billion worth of dumb.
~~~
Special Fed rules for taking even junkier paper; Cramer talking up Nasdaq, and he is a buyer not a seller. Harvey Pitt blames short seller. He is as clueless a pundit as he was a SEC Chair.
~~~
CNBC Live show with Dylan Ratigan is now beginning.
Sunday, September 14, 2008 | 08:57 PM | Permalink
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Comments
Well I am done for. I had puts in MER.
But it's only money.
Posted by: Jim | Sep 14, 2008 9:04:00 PM
Nice, Merrill is so badly off that the Fed forces them to be sold and BoA buys them at a premium.
And that's smart management?
Posted by: Paul | Sep 14, 2008 9:06:28 PM
Funny, but the talking heads on CNBC aren't laughing at and dismissing Roubini any longer.
Posted by: Jeff M. | Sep 14, 2008 9:09:29 PM
Q: With Merrill over a barrel and closing ~17, why does BofA pay $29?
Are they hyper nice guys?
Posted by: JAN | Sep 14, 2008 9:10:20 PM
Could be really smart management. What is BAC exposure to MER going tits up? Maybe BAC exposure to MER failure is more than the premium paid in the deal? If thats the case...smart move? What say ye???
Posted by: cpugh | Sep 14, 2008 9:10:22 PM
There will be volumes written about this FUBAR for future generations of MBA's to read...and they will repeat the same f-ups!!
Posted by: Yurt | Sep 14, 2008 9:12:43 PM
Bloomberg reporting its $29 a share. Sounds like a colossal mistake to me.
I think I will short BAC.
Posted by: KJ Foehr | Sep 14, 2008 9:15:26 PM
Boy, the pig men are getting desperate, aren't they? The U.S. Fed and banking system is a complete joke.
No worries, I'm HEAVILY short and have all the patience in the world to watch this trainwreck unfold. I have a feeling there are millions more like me. Come on guys, give us your best shot...
Posted by: Mr Bubbles | Sep 14, 2008 9:15:27 PM
Barry, what do you think about Roubini's claim that Morgan Stanley and Goldman Sachs should start looking for a buyer?
And where the hell did the AIG CEO get the nerve to ask the federal reserve for help? How dare AIG try to ask for taxpayer relief? Where did he even get the option to ask the Fed bridge-financing for help?
This is terrifying. If I thought it was hard to find a job before this weekend, maybe tomorrow I should start thinking about joining the military.
New York State is going to be wrecked. Goodbye tax money.
Posted by: Alex | Sep 14, 2008 9:15:52 PM
When I click on the futures link, I get a chart that shows the Dow & S&P futures slightly positive (9:14 pm EST), Nasdaq slightly in the red. Meltdown averted?
Posted by: babycondor | Sep 14, 2008 9:16:53 PM
What does B/D stand for?
Tried looking it up but can't find what it stands for (besides barrels per day...which obviously isn't right).
Posted by: Ted | Sep 14, 2008 9:18:42 PM
What does B/D stand for?
Tried looking it up but can't find what it stands for (besides barrels per day...which obviously isn't right).
Posted by: Ted | Sep 14, 2008 9:20:38 PM
i'm 40% cash and i wish i was more. i knew this was coming just like most others on this blog did. i'm also pissed off i didn't buy SKF at $103 cause it's going to the moon tomorrow.
Posted by: Richard | Sep 14, 2008 9:22:38 PM
Broker/Dealer
Posted by: Sanjay Bigglesworth | Sep 14, 2008 9:23:12 PM
b/d is broker dealer in this context, ted.
Cramer was making some sense - the fallout tomorrow will hit everything, and some stocks in completely unrelated sectors will drop for no good reason.
Any word on how the hedge funds are faring in all this? All the folks I know in the biz are hurting, but still employed. For now.
Posted by: scott | Sep 14, 2008 9:25:42 PM
The Bread and Circus must never stop at this point lest the Citizens understand their true position.
Posted by: SPECTRE of Deflation | Sep 14, 2008 9:28:41 PM
To those who blithely assume that BofA's bid for MER is a sound business decision for them after all of the shenanigans that have gone on thus far with this sector in recent years - HOW DO YOU KNOW FOR SURE? Meaning, what do you even know is in their books and how does BofA know what is in their books after just a couple of days? They're a "black box" so how does anyone really know what they're worth? I think this is merely a "Hail Mary" on the Feds' part. Could work eventually but I think there's still A LOT of pain left. What say ye?
Posted by: Jeff M. | Sep 14, 2008 9:28:43 PM
Sunday nights used to be so boring. There was something to be said for boring though. I hope somebody makes a movie of this one day.
Posted by: Stuart | Sep 14, 2008 9:29:21 PM
Broker Dealer
BR - At what point are the masses going to revolt at the exhorbitant take the CEO's et al from the last several years of earnings these guys "made." Live by the derivative, die by the derivative.
Can't stand the coverage on CNBC about how to bail them out. Believe me, no one out here in Kansas cares about whether these wall street firms collapse from their credit default swaps. I do care about whether my taxes have to provide a bridge loan to AIG though.
Posted by: Maj Tom | Sep 14, 2008 9:30:11 PM
Since BOA - MER deal is all stock won't the actual price paid fall if the price of BOA falls?
Maybe the $29 per share is based on Friday's closing BOA price and everyone is anticipating a precipitous fall in BOA at the open.
????
Posted by: tbapple | Sep 14, 2008 9:30:30 PM
They took off Kotok after he gave a rather.. downbeat assessment of the situation. Haven't seen him since.
Posted by: VennData | Sep 14, 2008 9:30:51 PM
BoAs bid for MER is stupid just as their acquisition of CountryWide was. End of story.
Posted by: JS | Sep 14, 2008 9:31:17 PM
CNBC has a bunch of trogolydytes on-where is old Dick Bove-he still will have a buy on LEH Monday night. These jokers don't get it. MS and GS are next up the ladder and I wouldn't buy stocks if I had money to burn, which I do incidentally . I am serious when I say there is a strong chance of another bank holiday-hell, it worked for FDR.
Posted by: Fred G | Sep 14, 2008 9:31:23 PM
Scott, doesn't appear that the fallout will hit gold, silver or the miners. DEC ZG /gold/ +22.2 (2.9%) and ZI /silver/ +.398 (3.69%). Also DEC bond futures up 1.2% ZN and 1.36% ZB respectively. The dollar has lost about 1c versus the euro.
Hard to say whether this will hit the energy sector either. With the falling dollar, crude should be up, but the bigger story there is Ike's aftermath. Who's to say whether the current $99.625 OCT crude price will hold overnight. Also, the equities may not follow the lead of crude here since gasoline prices are up so dramatically. The refiners, especially those without impact from the storm, likely will be up.
For that matter, I wouldn't put anything past these markets. A -300 Dow futures price in the overnight just as often signifies a gap down and reversal during the regular trading hours in my experience.
Posted by: jjr | Sep 14, 2008 9:34:32 PM
Maria Bartiromo demanded PE money to help... but the PE guys demand AIG get a Fed backstop. So what good are PE guys? Heck, I'd loan money to 'em if I got a Fed backstop.
Posted by: VennData | Sep 14, 2008 9:35:24 PM
