New Development

John Mellencamp, when nobody was watching or listening, (yes, nobody was watching or listening) switched from Rock to Country. Listen here.

Oh wait, I was going to write about Lehman.

No reputable news organization is in print yet as far as I can see regarding the Lehman resolution. Sounds to me as though:

1. Fuld is out
2. Lehman gets split up
3. Bank of America gets some of the best properties
4. The U.S. government has no exposure

W00t.

All or some of this could be wrong. We should know tomorrow.

No Deaths or Serious Injuries Yet

The Canadian tour continues. We are at our 4th stop, Hamilton, Ontario, returning home tomorrow. It's nice too see that oil is still headed lower.

I'm not sure why everybody is making such a big deal about Lehman selling its Neuberger stake. Two things: Either they need more capital or they don't. Since they're considering they sale I guess they do. After they exit the asset management biz, the investment bank will have to stand on its own. Is that a big deal? Banking might not be as good a business as it was but if Lehman can't cut it they're going to find out sooner or later regardless of whether they own Neuberger.


I had no cell phone service in Northern Ontario the last week or so and didn't miss it. I only checked my email once. The truth is that I refuse to use dial-up Interweb but it felt like a true vacation being away from it all for a while.



One of the highlights of the week was undoubtedly a heated negotiation between myself, my partner in the golf tourney we played and a couple of local guys over a wager we ended up losing.


Athlete-turned-local politician Al French and noted short stop Jean-Guy Chamaillard, despite a wealth of local knowledge and undeniable natural ability, managed to swindle a few strokes from us for the last day of they tourney. As I mentioned, tyranny triumphed and we lost the bet. I have to question what they lost in the process. I remember when I was in Business School and we had a case study project in a Labor Relations class. The assignment was a mock collective bargaining session where two sides negotiate a contract and the results are graded. My team acutally got a bad grade because we got too much from the other side. Familiar territory.

Ends and Odds

Even with oil having gone from $148 to $118, it is not going to be easy for this market to work if oil is going down because the economy is getting worse. It's a positive that consumption is down, though.

Boy oh boy I wouldn't want to be the new CEO of Motorola.

Sirius CEO Mel Karmazin yesterday walked on hot coals, put is head in a lion's mouth and then bought some of his company's stock.

"Someone" has now "broken" the story of "Lehman considering selling Neuberger" about 50 times.

I can't imagine the Fed doing anything this afternoon. I bet they are as confused as we all are.

SEC in the Hunt - This Should Be Good

"July 16 (Bloomberg) -- The U.S. Securities and Exchange Commission subpoenaed Wall Street's biggest firms and hedge-fund advisers in a widening effort to crack down on suspected manipulation of Lehman Brothers Holdings Inc. and Bear Stearns Cos. shares, said three people with knowledge of the matter. "

Gee. Yesterday, the head of the SEC pulled off the regulatory piece de resistance of making something illegal that was already illegal. Or he did something else but nobody is sure what it was.

Now the SEC is going after Goldman Sachs and the question of whether Goldman or any of the other brokers had an unfair role in the stock price decline of Bear Stearns or Lehman. Goldman summarily denies it:

""We went out of our way to be supportive of Bear and were rigorous about conducting business as usual," spokesman Lucas van Praag said. He said Goldman never altered its terms for doing business with Bear, even as lenders pulled their financing and some trading partners retreated..."

Goldman is scary good at what they do. If the Keysone Cops at the SEC find a hair out of place on Goldman, I'll be very surprised.

Good Idea From Lehman

"in an unusual move to reward employees who are fighting to steady the firm amid mortgage-related woes, Lehman announced that most employees will be awarded midyear stock bonuses."

This is a good idea. Lehman normally grants bonuses in January. Lehman employees will get approximately 20% of their stock grant now, when the stock is down 43% YTD, and the remainder in January when there is a good chance it will be higher. Lehman may also have suffered a much worse fate by then but this move won't change any of that.

When I worked at a major investment bank, I can't tell you how many times the annual stock grant occurred within spitting distance of the 52-week high.

Nice work Lehman. Let's hope everything works out.