Lehman (uk) was 'solvent after all

michaels

Am I correct in saying that had the support to all banks that was required post Lehman been available to Lehman then they would not have collapsed?

Generali

michaels wrote: »

Am I correct in saying that had the support to all banks that was required post Lehman been available to Lehman then they would not have collapsed?

No, they would have been nationalised entirely like NRK and B&B.

When Lehman was insolvent, AAA debt prices were at all time high prices (up to that point).

Borrowing against genuine AAA debt would have saved Lehmans. The trouble is they didn't have assets that were in excess of their liabilities. That's why they were insolvent despite a lolr and that's why they went bust.

Road_Hog

Don't forget that London Lehman transferred rather a lot, and I mean a lot of money to the US office just be it collapsed.


http://online.wsj.com/news/articles/SB122204286442761375

sabretoothtigger

I think theres some confusion over what is AAA debt. Only gold is AAA in this enviroment They labelled sub prime as AAA and the reality was nobody was buying it and it wasnt paying out the income it should and so on, the quality was entirely lacking in their accounts.

I imagine we'll repeat all that again with the current AAA debt which doesnt match the perfect rating and price its labelled with. But maybe it wont cause insolvency as a gov will never choose to stop the payments or whatever else it takes but something will happen, value will be lost.

Ive read a few times bonds below AAA have inflated again in response to low yields.

Some Lehmans assets have gone from 50p to 2p that I know of, partly because lehman was manipulating the price and it just wasnt the quality pro-ported

May 13 (Bloomberg) -- Bloomberg's Kelly Bit reports on how hedge funds continue to make billions of dollars trading in the debt of Lehman Brothers nearly six years after

https://www.youtube.com/watch?v=u_IFWGeG6F0

Europe especially they say at the end of the video, has been profitable

BillJones

sabretoothtigger wrote: »

I think theres some confusion over what is AAA debt. Only gold is AAA in this enviroment

Well no, as gold is not debt, it's an asset.

The rest of your post made no sense either, but your opening takes the biscuit.

princeofpounds

People shouldn't forget that whether Lehman UK was a viable entity or not, its holding company certainly wasn't. So whether a particular subsidiary is bankrupt or not is kind of by the by, unless you happen to be a lender to that individual unit.

It would be a bit like saying 'my bank account is perfectly healthy, if you exclude all my debts held by wonga'.

sabretoothtigger

Not sure I agree there because Barclays took on working parts of Lehmans and the value was maintained to a large extent I think.

Its not a bad argument, they could have parcelled up Lehmans uk and given it to nomura or someone. It was a working company as we find out now but it got run down on the presumption of duplicity with its parent
Im not saying anyone actually wanted to buy it but its unfortunate

BillJones wrote: »

Well no, as gold is not debt, it's an asset.

The rest of your post made no sense either, but your opening takes the biscuit.

Iam speaking in the language of the enemy, my apologies. Do you think current events make sense, clearly boundaries are smudged somewhat.
If many things are mislabelled they may have to fall back all the way to elemental properties before they can be sure of worth again. Hopefully not because its more productive to invest or to lend but it seems a feasible scenario, if trust should dissolve

Here Mr Ben says gold is an asset, T bills are an asset. Are they not comparable then
https://www.youtube.com/watch?v=2Dj9v9s9buk

Jason74

CLAPTON wrote: »

Indeed so, I'm unconvinced that regulators have learnt anything since the crash.

Given the way things are going at the moment, the far bigger concern for is that it appears that nobody (and by that I mean bankers, regulators, politicians and the public) have learnt anything from the crash. . . . . . . . . .and you know the old prover, "those who do not remember (and learn from) the past are condemned to repeat it".

princeofpounds

Not sure I agree there because Barclays took on working parts of Lehmans and the value was maintained to a large extent I think.

If you were replying to me, my comment was a fairly limited one in intent. I merely meant it is a) no surprise it ended up in administration, as administrators had to run the parent and b) not so important on the systemic global level.