Lehman’s (LEH) best hope appears to be Bank of America (BAC) or Barclays, both of which are playing chicken with the Fed trying to force a Bear Stearns-type bailout. The Fed is trying to resist the pressure, but time helps the buyers in this case, and they surely know it. Our bet is the government caves.
* 99% of Lehman employees about to get royally screwed
* Fuld: I can’t understand why no one believes me
* Potential Lehman Buyers Hanging Fed On Own Petard
* Lehman Working With Fed, Treasury: Bailout Seems Inevitable
* “If We Don’t Get Bought In The Next 24 Hours, It’s Over”
* Bank of America Now Lehman’s Best Hope
* LEH Traders: “The Entire F*ing Street Wants Us To Fail”
* Lehman Now Desperately Trying To Sell Itself
* Is This the Day The Financial System Collapses?
Karl Case (of Case-Shiller) actually thinks housing may be near a bottom. He bases his theory on two points: several months of upticks in some cities in the Case-Shiller Index and (he says) the relationship of prices to incomes hitting the level that marked the bottom in previous downturns. This seems a curiously sunny interpretation of his own data, but certainly worth investigating. (WSJ)
Another downside of protectionism: Why are Ford (F), General Motors (GM), and Chrysler so hyper-dependent on trucks and SUVs? In part because of a 25% tariff on light trucks the US government imposed in 1961 to retaliate against a European tariff on American chicken parts. The tariff gave American car companies an unfair competitive advantage, and they took full advantage of it. (NYT)
Finally, more proof that “speculators” didn’t drive up commodity prices–just as Congress publishes an arse-covering report saying the opposite. The 69-page study by the CFTC shows that index bets were declining in the early part of this year, just as commodity prices were skyrocketing. (NYT)
Individuals who bought Fannie (FNM) and Freddie (FRE) stock now crying for a bailout, too. Good luck. As usual, depressing stories about middle-class folks who bet their life-savings on “government assurances.” As usual, an absurd argument: turn on a TV for 5 minutes in the last six months and you’d have seen at least one commentator predicting Fannie and Freddie were toast. Individuals shouldn’t buy individual stocks–period. Unlikely that message will ever really get across.
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