The firm told investors that it had not borrowed money from the US Federal Reserve on Tuesday and had liquidity of “well above” $40bn
With the rumors surrounding Lehman Brothers about how they need another 4 billion of capital, you would think coming out to state they have more than 4 times that amount of liquidity would stave a sell-off.
I’m guessing the Bear Stearns debacle is too fresh in everybody’s minds. The last time a CEO came to deny liquidity problems, it promptly went bankrupt in three days.
If you’re an employee you might be thinking of buying puts to hedge the risk of losing your job and your life savings. Perhaps thats why trading of put-options rised to 280,000 contracts, quardruple the 20-day moving average!
October 20, 2008 at 3:32 am
Let’s make a bet. LEhman will not fail. It will not be let to because extra panic will have a lot of consequences which are not desired right now in the economy. A gov. infusion of capital might also be likely