Banking, finance, and taxes
Lehman (LEH) Chapter 11 Could Occur Today, Financial Stocks Could Open Off 20%
Published:
Last Updated:
Several media reports say that large financial firms are trying to reduce their risk to deals that they have with Lehman (LEH) in the event that the firm begins a liquidation later today.
According to Bloomberg, "Banks and brokers today held a session for netting derivatives transactions with Lehman, or canceling trades that offset each other, in case the New York-based firm files for bankruptcy before midnight New York time."
If Lehman’s commercial real estate and mortgage-paper securities are sold rapidly as the firm is dissolved by a court, it would almost certainly drive down the value of similar assets help by virtually every other large brokerage firm and bank.
If trading patterns from last week hold, shares of companies like Merrill Lynch (MER) and Morgan Stanley (MS) could easily open down 20% tomorrow.
Douglas A McIntyre
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
