BizJournals Portfolio
Home >   Business Views, Opinions and Blogs >   Business Blogs >   Market Movers >  

Still Not Breathing Easily

Market Movers

by Felix Salmon
Main
Wall Street's New Realities   Was Sarah Palin at the Fed This Weekend?

Recent Blog Posts

Links

Sep 15 2008 1:39pm EDT

Still Not Breathing Easily

I've got a feature over on the main Portfolio.com site today, which is basically an expansion of my blog entry from yesterday on when we can start breathing again. It even gets a bit wonky -- I look not only the TED spread, but also at T-bond fails-to-deliver.

I conclude pessimistically:

The biggest and most obvious risk of all is the one associated with Lehman's own debt, which is now trading at less than 35 cents on the dollar. That's a big loss for the institutions holding it--but it also means an unknowably huge loss for anybody who wrote credit protection on Lehman Brothers at any point over the past five years. Those sellers of credit protection are staring down the barrel of billions of dollars in claims, and they're going to have to raise that money quick, by selling anything they can get their hands on--and that might well include stocks.
So you think that we've dodged a bullet with the Dow still above 11,000? Just wait. This thing ain't over yet. In fact, it's barely begun.

. □

blog comments powered by Disqus
Real Business, Real Results
Out of the 'Family'

Did anyone at Microsoft ever watch the (gasp!) offensively funny show Family Guy?

Cruz Missile Lands

Ex-Morgan Stanley exec Zoe Cruz is now heading her own hedge fund. Are Wall Street's leaders done?

Scandal Chic

Martha, Bernie and Skilling know that what you wear for court can go a long way in public perception.

spotlight on

Health Care

Bad to the Bone No More

Companies such as General Mills say they're stepping up efforts to change employees' bad behavior and promote healthier lifestyles. Read More