Lehman Brothers Holdings, Inc. (LEH)

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Serves the financial needs of corporations, governments and municipalities, institutional clients and individuals. Provides an array of equities and fixed income sales, trading and research, investment banking services and investment management services.

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Avatar TMFWBuffettJr (99.71) Submitted: 2/06/08 12:45 PM : Start Price: $61.43 LEH Score: 53.10

This bank is a ticking time bomb, and who knows how many pounds of explosives lay underneath it. Lehman was in this position once before during the LTCM blow up. They had a huge amount of problems and hid them, hoping everything would work itself out. Luckily for them, it did just in the nick of time. But this time they will have no such luck. The credit crises is not over...it is not even half through yet. I estimate we're about 40% of the way into this thing. Lehman is hiding things again, but this time they won't be able to hide them until a recovery. I'm shorting this stock with real money. They will eventually have to write down all the debt and derivatives they were caught with. They were pushing them through like all the other banks, but also like them they got caught without a chair when the music stopped. Now they have what I believe are billions and billions of the very worst loans (2006, 2007) that they purchased to flip but were unable to find a buyer and couldn't unload. They will have to write those down. So far, they have not. While all the other i-banks are falling, they want to project themselves to be like Goldman Sachs - too smart to get into the mess - but they are not. They're hoping the whole thing blows over, and it won't.

Warren Buffett warned that the problem with such a fantastic party like we had at Cinderella's mortgage ball over the last five years is that there are no clocks on the wall. He said the drinks taste a little better, the girls get a little prettier, and so you stay for just one more dance. But eventually midnight hits and everything turns back to pumpkins and mice. Lehman is caught holding a lot of pumpkins and mice, they're just trying to hide it a little while longer than everyone else.

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Avatar CoolinDulan (91.75) Submitted: 4/17/08 2:43 PM

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Numbers please? What constitutes "very worst"? UBS wrote off 19B of "really bad", C wrote off 10B of "stinky", and MER wrote off 6.6B of "awful" just today. LEH has not written off anything significant and that is either foolhardy or indicative of other things on their balance sheet that might hedge their exposure. I agree LEH is bad news, and exposed, but my focus is specifically their commercial loan exposure and their leveraged loan exposure in comparison to net assets. If they have to liquidate in either of those two areas, I think that could be the beginning of the end for them.

Please be more quantitative next time. Too many quotes but no quantification to guide anyone beyond your opinion. How would I judge if the story is the same in 3 months looking at this post if LEH reports a "good quarter"? Detail gives us all a basis to compare and contrast.

In any case, I agree, stay "put" on LEH.

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Avatar cubanstockpicker (73.36) Submitted: 6/17/08 8:22 AM

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I have a p[roblem with LEH and their reporting, for two reasons.
They owned and funded the TWO WORST BC LENDERS. BNC and Aurora
Their conditions in the mortgage industry were among the most lenient
Average conditions

1: Is client breathing?
2: Do they have a steady pulse?
3: Can you provide us with paystubs even if they are fake?
4: Can you photoshop 30,000 in the bank statement?

I don't know what they are doing to keep that under wraps, but if sub prime was a country, they were the Bush and Cheney.
Underwriters would call up when checking bank statements and tell you if you messed up the running balance, discard it and tell you to resend. THESE WERE THE UNDERWRITERS!!!
In 2006, the investment bank was the top underwriter for subprime mortgage backed securities with a roughly 11 percent market share, according to Inside Mortgage Finance, a trade publication.

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Lehman Brothers Holdings, Inc. (LEH)

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