click for updated futuresFutes

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

~~~

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

~~~

Vince Farrell is accentuating the positive

~~~

Federal Reserve Board announces several initiatives to provide additional support to financial markets, including enhancements to its existing liquidity facilities

~~~

Still waiting for a Treasury Press Release;

~~~

SEC: Statement Regarding Recent Market Events and Lehman Brothers   

~~~

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)

~~~

David Kotok says "Look out below."

~~~

Lehman Said to Prepare Bankruptcy as Buyers Withdraw (Bloomberg)

~~~

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)

~~~

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   

~~~

U.S. Opts to Avoid Lehman Rescue

~~~

CNBC reports that the Fed told Merrill Lynch to "Sell it self" and MER has been shopping itself for a few days.

~~~

FT: Hubris – is thy name Richard Fuld?   

~~~

Oil is under $100; trading at 99 change.

~~~

Fed Plans Expanded Lending Facilities 

~~~

WSJ reporting Bank America/Merrill deal is done at roughly $44 billion.

~~~

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.

Category: Bailouts, Corporate Management, Federal Reserve, Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

153 Responses to “Live Blogging CNBC Lehman Show”

  1. Rob P. says:

    Ok, I’ve been movie watching tonight and I’m JUST catching up! But did you see the SHIT that the FED is pulling? All “investment grade” collateral will not be accepted for PDCF, TSLF, more frequent auctions. Holy shit! My post just a few above this one was a joke and little satire, F&%^ it might actually be a viable option the way these Fheads are running the show!

  2. Got SKF says:

    The circuit breaker will give Cramers Coolies time to go long, and buy value. After all, he said the bottom is in for financials.

  3. NJ says:

    Are Don Luskin, Jerry Bowyer, and Dennis Kneale only people who understand the markets? sheesh!

  4. Maj Tom says:

    When the S&P closes below 1214 this week, I can’t wait to see someone call out Cramer on his “bottom” call. That guy is a ‘tard.

  5. Jagmohan Swain says:

    It’s hard to believe that companies as respected as these can put themselves in such situation that they have to see this day.What a tragedy?

  6. cpugh says:

    be carefully trading tomorrow. quotes could be slow, inacurrate, networks could crash…just don’t try to do too much

  7. CNBC Sucks says:

    Jeff M – I try to live my life thinking that little Ewok has no name, so I will just pretend you did not mention it.

    NJ – I think Luskin will buy because he strikes me as one of those Baby Boomers who Westburies a lot. I don’t think Cramer will because his whole act is artificial and intended just to impress Erin Burnett. But the main thing that I wonder about is whether Bob Doll will have his tie and collar on straight when he shows his face on Squawk Box this week.

    VOTE FOR OBAMA

  8. Maj Tom says:

    new low 1214.50, down 44.00 – big number since it was the previous closing low.

  9. Maj Tom says:

    futures dropping rapidly, now down 45.25 to 1213.25

  10. The Financials Took The Bait

    First Step: Reduce lending standards.

    Second Step: Lower the interest rate.

    Third Step: Wait for the companies to load up their balance sheet with loans.

    Fourth Step: Buy put LEAPS on the most vulnerable financial companies.

    Fifth Step: Collect the $ as the LEAPS expire.

    Illuminati

  11. Cornholio says:

    This banana republic is a short across the board.

  12. Richard says:

    cnbc keep your political views to yourself this is a finance blog. i think there will be a time to sell within the first hour of trading then watch a zig zag pattern for most of the day before the PPT goes full throttle to put lipstick on the pig before close. happens every time.

  13. Posted by: CNBC Sucks | Sep 14, 2008 11:14:04 PM

    Bud, you’re, certainly, Free, to pretend, to Choose. But, no offence, Grow Up, saddled with phony paradigms is no way to go through Life.

    If you cared about Choice, you’d be on the topic of: http://www.blackboxvoting.org/
    like, the proverbial “White on Rice”

    Obama, like McCain, should be known by their fellow travelers–in his case:
    http://en.wikipedia.org/wiki/Zbigniew_Brzezinski
    you’re just a pawn on his “Grand Chessboard”

  14. JAN says:

    from the NYT
    The American International Group is seeking a $40 billion bridge loan from the Federal Reserve, as it faces a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said Sunday night.

    Ratings agencies threatened to downgrade the insurance giant’s credit rating by Monday morning, allowing counterparties to withdraw capital from their contracts with the company. One person close to the firm said that if such an event occurred, A.I.G. may survive for only 48 hours to 72 hours.

    Rats fight when cornered, with the $70B SIV (WSJ) and the Fed strange things could happen.

  15. CNBC Sucks says:

    Richard: No

    Read what the Big Picture is about on the tag line, pal.

    VOTE FOR OBAMA

  16. CNBC Sucks says:

    Sorry for the double post, peeps. Hoffer was posting at the same time.

    Who says I was against The Grand Chessboard, PNAC, Cheney’s NEPDG, Iraq, the whole ball of wax? I still support Bush and Cheney. But that plan was 2000-1, and we are in 2008. I believe in diminishing returns and I anticipate that inflection point will occur sometime during the next 8 years, and I think McCain-Palin are woefully ill-suited for that reality. Combine with an imploding financial and economic system, and tomorrow’s trading will be the last of your worries.

  17. cindy says:

    Where is the best place to get the most recent daily price limits / circuit breakers for all the markets tomorrow .. futures and stocks?

    Cindy

  18. XBrit says:

    <>

    Not SKF, but my accts have a fairly huge SDS position (150% of my acct value thru margin) as of the close Friday.

  19. KJ Foehr says:

    US Dollar Index Futures Spot Pr(NYBOT: DX-Y.NYB)
    Index Value: 77.76
    Trade Time: 11:54PM ET
    Change: down 2.18 (down 2.72%)

    Gold!

  20. Posted by: CNBC Sucks | Sep 14, 2008 11:39:45 PM

    Bud, I’m not sure a follow that post, care to expound further?

  21. leftback says:

    Oh my, more expanded “facilities”…. we will be hearing a lot about that tomorrow. Dead Banks Walking, indeed.

    As I have said before, Bernanke is trying to use all of his “creativity” here to make the market bump down the stairs rather than take the express elevator.

    None of this is going to be good for bonds, Treasuries will sell off after the initial flight to quality and the emergency rate cut (if it happens). Then once the dust settles, rates are going to rise, and junk bond rates will rise very fast indeed. The era of cheap money is officially at an end.

  22. I still support Bush and Cheney.

    I still use crayons, construction paper and paste out of a big plastic tub.

  23. Wayne says:

    Thain John and other Merrily Lynch bought about one million shares at $22.50 on July 29, 2008. It seems they knew $29 deal then.

  24. JSG says:

    Vince Farrell also said that the drop in crude prices would lead to a stock market rally. It’s time for CNBC to find a new set of jokers to put on the air.

  25. Jim says:

    Thain John and other Merrily Lynch bought about one million shares at $22.50 on July 29, 2008. It seems they knew $29 deal then.

    Perhaps they knew there would be a report of a deal. Believed just long enough for them to sell and make a profit.

  26. JSG says:

    Seems like everyone is forgetting about Wamu’s problems.

  27. Scott in Chicago says:

    So the Fed orchestrates a sale at such a premium that the Merrill shorts get screwed blue, while standing aside while Lehman goes to zero. This all leaves short sellers what exactly? Some hammered and all confused? Anyway, this shit is far from over. And we are in for a fundamental bruising. A serious goat fuck. That said, I’m holding a boatload of SDS, I’m holding gold physicals; all good. My worst trade? My house is paid for and losing value every frikkin’ day. I don’t know, people, the Fed’s balance sheet is running short of liquid assets. Last count the Fed had 250-400 billion bucks. Total. Really. Now that is scary.
    Here’s the best case scenario (unless you’d like to see a complete meltdown): in five years every dollar you now have will be worth 50c and fed funds will still be at 2% or less.
    We’ll be Japan. If we’re lucky.
    If we’re not lucky…..either Road Warrior or Idiocracy.

  28. CNBC Sucks says:

    Mark – sure. So as not to get too OT for this thread, this thread has some very rough elucidation on my concerns. I have to keep it rough for certain reasons.

    http://bigpicture.typepad.com/comments/2008/07/nozzle-rage.html#comments

  29. steve3-6-3 says:

    “Why are the NASDAQ futures getting unduly plummeled?” – Jimbo Cramer

    HA

  30. KJ Foehr says:

    Looks like Soros got this one wrong. His buying kept me from shorting LEH recently because I figured he had inside info that it really was going to be bought at a premium… as ridiculous as that sounds now.

    “Soros Fund Management LLC, which manages $20 billion, purchased 9.47 million shares, or about 1.4 percent of New York- based Lehman, between March 31 and June 30, according to a filing with the Securities and Exchange Commission.”
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aZr03EdAhuqg&refer=home

  31. Scott in Chicago says:

    NJ-
    If you believe in Luskin, Kneale etc. then you are frikkin’ down a lot of money, homes. those jokers have been telling people to buy since the high. Really. You could look it up. Geez, if you wanna buy, do it. Tomorrow, big shooter. Buy the shit out of it.

  32. John says:

    Well not to fear fellas. No doubt Jim Cramer (along with his fellow CNBS Sh*tBirds Kudlow and Luskin et al.) will be out there buying up the Financials over the next few days– since, afterall, ‘THE BOTTOM’ is in (or so it is in the Financials!!!)

  33. CNBC Sucks says:

    Scott, I think NJ was being facetious. Doug, I will let that go because we seem to be on the same side, based on your blog. Mark, leave a comment on my blog if you would like to discuss PNAC, NEPDG, energy, etc. further. Enjoy tomorrow’s entertainment, everyone!

  34. EstebanLDS says:

    Lehman Brothers Files for Chapter 11 Bankruptcy

  35. Economics 101 says:

    Well,

    Thinking outloud again in my opinionated fashion…..

    Wow! look at the futures go. Look I’m just a mere college student. I think that a reading of Das Kapital (all 3 volumes) is in order). Natural market forces cannot be outrun forever (SupplySideEcon)(If you build it people will come… till they are broke). Also, how bout that alienation? Will that work for out of work financial professionals? I may need to change my finance and economics major…. What a bummer.

    Econ 101

  36. StatingTheObvious says:

    This looks 1:1 like another activity monsterpeak(here on TBP) to me, meaning we will get a short squeeze and a stock market rally, especially given the emergency panic measures and PR flood streaming out of every Fed orifice :p

    …all of which will last 5-50 days before the next rather terribly ugly, mindnumbingly rapid descent(on both stocks as well as carry /value trade) sets in.

  37. MarkTX says:

    Seems like everyone is forgetting about Wamu’s problems.

    Posted by: JSG | Sep 15, 2008 12:12:28 AM

    No, People quit listening!!!

    according to my mother, this is normal….

    In her mind(bless her soul)

    she heard about BAC, WAMU, LEH, MER, FRE, FNM

    she heard about it 1950, 1960, 1970…

    same old, same old, to her……

    NO shit!!!!!

    The honest people lost today!!!!!

    If I would have ever came close to talking
    a small fib…..Grandma would have washed my
    mouth out with soap….

    Do you want to solve the problem,

    Don’t vote in/for DC, carry a bar of soap????

  38. Alan says:

    The politic comments on this site have gotten tedious and vapid. What happened to the inflation meme promoted on this site? Are you people still long oil to $400?

  39. Economics 101 says:

    Well,

    No, I’m not long oil. I am a mere student and I used my (limited) knowledge of micro/ macro economics and finance to short oil at 139. Also, oil at such a high price would destroy the supply chain and so on blah, blah…. I think that the low brow economics masters that never took History of Political Economy have it wrong and that Real GDP is decreasing. Deflationary pressure has been going on for a while as the .gov pulls levers to combat it. However, I happen to think with my (limited) knowledge that the levers only work in certain situations and this is not one of them. (Normally, I would go into a long winded academic explanation…..) Of course, I could be wrong since I’m a student. I wish that I had bet more on the short as I would have retired before I’m done with school. However, I am still experimenting with my hunches. “Market Theory”

    Econ 101

  40. Chuck says:

    The Beeb on LEH Chapter 11 filing:

    “Greg Wood, the BBC’s North America business correspondent, said that police had cordoned off the bank’s headquarters in New York and staff were leaving with cardboard boxes as onlookers gathered to watch the bank’s demise.

    The bank employs around 25,000 worldwide, including 5000 in the UK. ”

    This is going to be a really bad week for a lot of Lehman employees.

  41. Chuck says:

    Steve, Japan’s closed tomorrow, Monday:

    From: http://www.nni.nikkei.co.jp/

    “Japanese financial markets will be closed Monday, Sept. 15, a national holiday, and an Evening Edition will not be issued. There will be no Morning Edition issued for Tuesday, Sept. 16, because of a press holiday on Monday.”

    …whew!

  42. Bruce says:

    Mr. Bernanke
    Mr. Paulson
    Mr. Bush
    Mr. Cheney
    Ms. Pelosi

    Please don’t cut rates tomorrow. That is not really what is needed. Cut up the credit card…announce the government is forging ahead with a balanced budget amendment which will restore the faith and credit of the United States to its citizens and the citizens of the developed world. Also announce that non-essential spending by the United States government with be cut to the bone for the duration of this credit crisis.

    Think about it….

    If not now, when?

    Bruce in Tennessee

  43. Lock Limit Down says:

    It appears to be very likely that BofA would be in worse shape if it did not buy Merrill, due to either having some sort of direct risk (counterparty or something else that I am not aware of), or due to what Roubini discussed in his most recent column, a run on firms such as Citi or JPMorgan (I’m assuming you could include BofA in that as well).

    I am also very curious to see how BofA’s stock trades in the coming days, and given that this is an all stock deal, how Merrill’s stock trades as well.

    Finally, I am not sure of this, but I would think BofA also has to get this approved by their shareholders, and I don’t see how this can happen given where Merrill’s stock was headed and the ridiculous premium that is being paid.

    Can people please provide their thoughts on this?

  44. Economics 101 says:

    Yes,

    Execellent point Lock. JMO but, I would compare it to deploying countermeasures or injecting epi and neo when the patient pressure is 40/20.

    Econ 101

  45. Dhukka says:

    Compared to Vince Farrell BofA isn’t stupid. Anyone remember the Vince Farrell bottom in March?

    BofA demonstrated how stupid they were paying $18 for their initial stake in CFC. Then they decided it was only worth $7 and change for the rest of the company. Most think that bid will have to revised down further.

    This will be looked back on as one of the dumbest deals in history. Bof A should get a ratings downgrade to boot.

  46. BelowTheCowd says:

    The only regular on CNBC who speaks anything resembling truth is Santoli. I keep expecting them to find somebody to replace him who won’t call them on their BS.

    -btc

  47. Francois says:

    If every Sunday is like this one until the election, it’s gonna be real tough to pretend the economy is fundamentally sound…Mmmbwahahahahahaha!

    Can’t wait to hear the repugnicrat spin on that deal.

  48. ReallyNow says:

    2008.09.15 09:38:50 UK BBA: Our Banks Are “Safe And Sound”

    2008.09.15 09:38:35 UK BBA: Confident No British Bank In Trouble

    So it begins..

  49. flenerman says:

    Tedious and vapid? I thought I might make it all the way through the comments without reading the word “meme.” Then you came along, Alan.

  50. prismatic says:

    Just a couple of points that I believe can ensure that this type of situation can never happen again:

    1. Change the law so you can not walk away from personal debt and the debt follows you for the rest of your life. That should stop the “jingle mail” phenomenon. This actually the norm in most countries.

    2. Change the law so shareholders are liable for any debt held by the company they own shares in. That should change the attitude of mindless, clueless private and public shareholders.

    Anyway I believe the above is a lot cheaper then the mess created by Paulson & Bernanke.

  51. SPECTRE of Deflation says:

    I would suggest a vote in November for the party of Bread over the party of circuses — their elephants have dropped quite enough bullshit for now.

    Posted by: donna | Sep 14, 2008 10:13:18 PM

    You are part of the sheeple crowd that just doesn’t get it. They are both crime syndicates who demand protection money from their victims. You really think the Democrats will save you. LOL! Good luck with that bullshit plan!

  52. Scott in Chicago says:

    NJ-
    Alas, I missed the irony in your written word re the efficacy of Farrel’s, Luskin’s et al advice. My bad.