there is no learning

[solarbird]

Waiting to see what final numbers appear out of the Lehman auction. Early reports say about what I had heard as the concensus, tho' Bloomberg is indicating that it's worse than their concensus. I dunno, I was seeing 10¢/dollar estimates as consensus yesterday, I'm seeing 9.75¢/dollar today, that smells like rounding error. TED at 4.62 from 4.65. That's up.

They're suspending mark-to-market accounting rules throughout the banking system. There's already no trust; now that mark-to-fantasy is back in full force, does anyone think trust will improve?

US stock markets are considering a three-day shorting ban on any stock falling 20% in a day.

Hm. Stock market is liking something. I wonder if they have the news and it's good?

...

It's not Lehman:

Final Results of the Lehman Brothers Auction, Friday 10th October 2008
Final Price: 8.625

That's bad. Will eta with URLs once verified.

eta: Verification. Multiple sources, actually. That's around US$365.5B that needs to come out of ... somebody. Well, a lot of somebodies. I'm hearing that a bunch of this was compromise-settled in advance but I don't know how that would work.

Comments

[peakoilchaplain.livejournal.com]

In trying to learn more about what the Lehman stuff means, I found this: Lehman CDS: It Won't Be Over Today (http://www.portfolio.com/views/blogs/market-movers/2008/10/10/lehman-cds-it-wont-be-over-today)

All the auction does is set the price, settlement doesn't actually happen until October 21st - which means, as far as I can tell, we may not know the extent of counterparty risk/failure until 11 days from now. Add that to the pile of uncertainties, I guess...

[solarbird]

Yes. But the idea was that people would be braced to have to deal with the expectation. Instead, they're going to have to deal with a worse number.

[dustin-00.livejournal.com]

"They're suspending mark-to-market accounting rules throughout the banking system."

This alone should send stocks tanking and I would hope consumer demand will reverse this decision soon.

[king-chiron.livejournal.com]

I'll admit that I don't understand CDSs very well, but I thought this was an interesting bit on the auction, makes it sound much less scary -

Roughly $400 billion will be paid out on Lehman CDS, but, once all positive and negative positions are "netted" out, about 2% of that money will actually change hands, Pickel estimated. Payments are due on Oct. 21 to settle Lehman CDS in cash, he said.

http://www.marketwatch.com/news/story/lehman-derivatives-auction-described-smooth/story.aspx?guid={A5ACF291-FC4D-478D-845D-8713E50448B3}&dist=hplatest