Wall Street Manna

An irreverent look at Wall Street

Saturday, September 13, 2008

Lehman shareholders are toast


No one wants Lehman's $85 billion of crap on their balance sheet. Secretary Paulson said the Treasury wouldn't step in, so he now is attempting to strong arm banks to contribute capital to collateralize those "assets" so they don't have to be sold.

How ironic is that?

The Secretary of the Treasury leverage on the banks is this: If you don't contribute collateral, Lehman's assets will have to be sold, and then you'll have have to mark down those same assets on your balance sheet.

They should call his bluff.

Wall Street, however will learn their lesson. Every capital raise now brings the common shareholder closer to burnt toast!

1 Comments:

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