Lehman: Nobody Knows Anything

Do you want to know what on earth is going on with Lehman Brothers, and with the whole financial sector more generally? Here's some advice: go outside. Take a walk. Get some fresh air. Because nobody knows anything.

Today could quite possibly be the most rumorlicious in Wall Street history. Goldman's buying Lehman! No it isn't! The Fed's going to cut rates between meetings! Maybe a private-equity shop can help! Interestingly, Lehman stock has not been particularly volatile today, trading in a band between $4 and $5 all day. (OK, that's volatile on a percentage basis, but not on an absolute basis.) And the credit default swaps, too, seem to be keeping some grip on reality.

The fact is that anything could happen at this point, and the situation is very much up in the air. Lehman, with the help of the Fed, will probably muddle through today and tomorrow; I suspect that it won't exist in its present form come Monday morning. But the range of possible outcomes for shareholders and bondholders is enormous, and anybody playing in Lehman securities right now is a gambler, not an investor.

If you think you know something, you're wrong. Even Dick Fuld doesn't know what's going to happen: hell, he doesn't even know if he's going to have a job come Monday morning. Speculation and rumor can be fun, but they don't really achieve anything. So go back to your day job, safe in the knowledge that the game will have played itself out within a week, tops.