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Breaking News: Lehman might be liquidated. Will this be a positive or negative for the market?
Answers
142 points
zachmckinney answered one year ago …
I think it will be a needed negative hit to the market. The fed can't keep bailing out companies and needs to show this by not touching Lehman. Bondholders need to lose their money on this one, which might make them and other people think twice about putting their money into companies with similar exposure as Lehman.
Read more from zachmckinney142 points
zachmckinney answered one year ago …
Also, DJ futures are currently down 269 points. Lehman is definitely a contributor to this - will be an interesting week.
Read more from zachmckinney
3963 points
MNSL answered one year ago …
It will be very negative. We have to wait and see what is going to happen.
We will see more bad news in the financial sector, property sector and commodity sector worldwide in the next 18 months before they recover.
It is better to avoid banks exposure to commodity and real estate now before it is becomes too late.
307 points
CG answered one year ago …
It's very positive for the markets !
The markets want to tank and I am very short, so I can hardly imagine any better news.
This is absolutely necessary for teaching the dumb a valuable lesson and clearing the rubbish out of the filthy gutters that are today's stock markets.
It shows what bad shape the other banks are in, as well as the government, that no deal was struck over the weekend.
On the blog, we made 26% shorting LEH in just 1 month and upon covering wrote :
"Sunday, June 08, 2008
covering LEH +26% and AXL +28%
Our calls on market tops continue to prove surprisingly accurate and very lucky indeed.
Not wishing to push our luck, we now book some profits. We cover our Lehman Brothers, LEH, short as well as our short on American Axle, AXL. These positions have been held for 1 month and just over 4 months respectively.
We expect both to be a great deal lower in coming months ..."
http://ridingthegravytrain.blogspot.com/
I have remained short on and off until as late as just before closing Friday, fearing a buyout of the firm and thinking it couldn't go much lower. I suppose ultimately I was wrong, but the gross profits will comfort me.
457 points
SallyG answered one year ago …
I think zachmckinney hit the nail on the head. I heard a MSM commentator suggest that letting Lehman go under would "send a negative signal" as though that was a bad thing—I think that negative signal is a much-needed wake-up call. We are in a bad economy, and continued bailouts just reinforce the belief that there is always someone to bail out anyone making bad investment decisions. There isn't, or if there has been, it can't—and shouldn't— continue forever. Time to draw the line in the sand.
Read more from SallyG114 points
kr8ve answered one year ago …
To me it is a morale question as well as a "Let's teach the bad companies a lesson" issue. On the one hand I want o let them go under. One the other hand, I hurt for the Lehman employees who will loose their entire retirement funds. I could care less about the other share holders, since, they know the risks or should have known. Let them eat their gredy decisoons.
Saying all that, I want the liquidatation to send the message to all companies who think they can get away with unethical behavior. The bailouts must STOP! The bad part is that LEH has been singled out for some reason, but, there are so many others that have been bailedout. The bailout message is still loud and clear! Then, one has to ask, "What is the point of not adding LEH to the bailout-list?"
