Friday, March 12, 2010

Keystone Cops or Keystone Robbers?

As previously mentioned in other posts today, the Lehman's coroner's report will fill the blogger troughs for a long time to come. But the choice pieces are coming out first.

ZeroHedge, as you'd expect, is in quick with some gooduns. You'll have to read the post(s) because it's way too intricate to paraphrase, and perhaps way too slanderous. Hardly ever knew financial news could be so salacious.

He paints a picture of either a comedy of errors on Lehman's part, or a comedy of errors on their counter-party and regulators part: Guambat is unsure. Indeed, he is unsure if it is comedy at all. Considering the fallout.

If ZeroHedge might be summarized by a few quickie comment grabs, Guambat, on first reading, would choose these:
Little did we know just how far the stench went, and that worthless assets (and we do mean worthless) are very likely the norm.

This also means that should anyone ever delve into the collateral that banks hand off to each other in exchange for the tens of trillions in daily liquidity to gun the SPYs higher, they will find very little of actual value.

somehow the Syndicate Encouraging Corruption, aka SEC, has found this materially criminal misrepresentation to be, well, immaterial, and demand recompense from exactly zero Lehman executives.

how about this observation, which should promptly force Mr. Fuld to buy a one-way ticket out of the US

How much more do we need to uncover before there is a riot next to SEC's offices if, after all this, it still does nothing?

Remember: Lehman Brothers was not seen to be any old white shoe fantasy factory. It was one of the Big 5, none of whom any longer exist in their prior form. Lehman's was in the Pantheon. It got full value for its protection money paid to Congress. It could do no wrong. But did very, very much.

The difference between them and the rest? Don't know, but you can usually tell a swine by the company it keeps.

This story will only be so interesting and satisfying if we get true, comprehensive and everlasting regulatory reform out of this Administration.

And if those Corkers in the Republican Party, and those Sell-outs in the Democratic Party fail to deliver, well, be sure to tell your Grandkids. They'll need to be smarter than us.

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