Working My Assets Off

Lehman Brothers is planning to sell its assets.

God, I can't wait to know more about how business works, but education takes time. In the interim, here's a link to Floyd Norris's liveblogging of the Lehman Brothers conference call. And some of my favorite - that is, scary intriguing disappointed holy shit this country's in a hand basket - moments:

8:10 a.m. Dick Fuld started the call by saying Lehman was “de-risking” the balance sheet. That’s a new word to me.

8:30 a.m.We are assured they have applied stringent stress tests based on historic performance of commercial real estate in various markets around the world, and that REI Global is capitalized to survive the worst seen in each market over any two-year period.

Of course, we used to be told that residential mortgage backed securities could not run into problems, based on historical analysis. I hope they are right this time.

9:35 a.m.Lehman shares opened higher, although well below the levels before yesterday’s plunge. That should be cause for some pleasure at Lehman headquarters.

Unless I missed it, there was no talk of selling more stock to investors.

Commenting is a slippery slope on the Internet. But I'm grateful for they give me insight into aspects of the situation my narrow-view of the world wouldn't even think about otherwise. Despite the fear of receiving false or incomplete information, I like that my education about the world isn't just going to come from journalists and textbook writers. Let's face it: the information we get from them can be just as misleading. Here are some comments from the liveblog I found compelling:

The public is poorly served by a news media that cannot function. First, they cannot seem to prioritize news (witness the poor coverage of the biggest market melt-down since the depression); Second, they do not ask hard and insightful questions - they just take the “happy talk” at face value (witness - coverage of financial company CEOs, presidential candidates and the Federal Reserve); Third, they do not research and provide perspective (maybe not enough column inches) - for example, there is hugh litigation in the works related to losses from the credit debacle due to fraudulent activities but there is no mention of that in the news media - probably requires too much actual research.

Smart people are beginning to look to alternative and unexpected outlets for real and meaningful news. To illustrate, I recently saw coverage of presidential candidate flip-flops on both You-tube and on the Daily Show with Jon Stewart in which they are caught taking one position but then, in a different time or forum, taking an opposite position. It is a sad testament to news media failings that people must look to Comedy Central or You-tube for real meaningful news.

— Posted by Jim

It’s truly ironic. All the wailing about socialised medicine, and in the meantime the bankers and finaciers have socialised the financial industry. Just get big enough and you can do whatever you want knowing the government will bail you out so you can make mischief again.

— Posted by Eric

This whole thing is a real kick in the head. To think that there are companies who pay these clowns the big bucks for investment advice and to make analysis for dumping bad investments and they can’t even take care of themselves. Go figure.

And now the other clowns want to buy, but only on a leveraged basis, continuing the insanity that started this whole thing in the first place. Only when all the smoke blows away and the mirrors are broken will our economy get back in working order.

- Posted byClyde Jenkins

The night of the Fanne Mae/Freddie Mac takeover, Charlie Rose hosted a forum on his show. It helped clear up a few things for me. Also, scared me. Mohamed El-Erian, CEO of PIMCO,the world's largest bond investor with $692 billion of assets under management as of 2007, basically says the lawmakers in this country know there's a problem, but have no solutions.

Another of his guests, NYU professor Nouriel Roubini predicted the collapse of Fannie Mae and Freddie Mac two years ago. Here's his blog. I'm trying to read it everyday in the hopes it will help me make sense of our economic climate. So far what I understand is that few people understand and those who do don't agree with each other about what to do next.