Say Goodbye to Lehman

When I review the Lehman Brothers chart and watch its tape daily, I draw many of the same conclusions I drew with Fannie Mae and Freddie Mac before they moved to 0.  Lehman Brothers is next.  I believe that they will be next in line for a major shakeup.  They will most likely be acquired by another firm at much lower levels, similar to the way that Bear Strearns was dealt with; however, this time the federal reserve may not act with the same vigor they did with Bear and Freddie/Fannie.  Lehman is viewed as a smaller player in the bank and the Fed just may hold off on bailing them out.

The Korean Development Bank has backed out of the deal and this is very telling.  Lehman has huge exposure to the mortgage backed debt market and they are facing even further write-downs.  Lehman will be on tap to announce a new strategic plan next Thursday after the market closes.

Lehman's stock chart is unstable.  The price swings are dramatic in either direction.  This stock was down almost 50% on todays close.  It is bidding up a bit in the after hours but that will most likely be erased tomorrow.  Management is pulling out all the stops and trying to sell assets to shore up capital and raise it fast if they want to prevent an all out meltdown.