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From:
To:
Subject:
Date:
Donald
J
Kobo
C h i ~
1k00000U
Re:
Lehman
06/13/200808:19
AM
It
shouldstabilizethesituation
at
leastforatime.Buttherearedeeperproblems-theverylargesurpriseonthelossunderminedcredibility
and
raisedquestionsaboutwhat
else
might
be
hidden,andthebasicbusinessmodel
is
indoubtinterms
of
thelong-termViability
of
thefirm.theyarea"bondhouse"thatgrewinrecentyearsbybeingaggressive
in
mortgagesecuritizationetc.
One
of
thehedgefundtypes
onCape
Cod
told
me
that
hiscolleaguesthinkLehmancan'tsurvive--thequestion
is
whenandhowtheygoout
of
businessnotwhether.
He
claimedthiswasa
Widely
sharedview
on
theStreet.T
Chairman
Bernanke
BOARD/FRS
BOARD/FRS
06/12/200810:05
PM
ToDonaldL
Kohn/BOARD/FRS@BOARD
cc
Subject
Re:
Lehman
Whydoesn'ttheequityraisehelpmore?
If
theyarereallysolventthenliquiditybackupshould
be
effective.SentfrommyBlackBerryWirelessHandheldTDonaldL
Kahn
-----Original
Message
-----
From:
Donald
LKohn
Sent
09:
45
PM
EDT
To:
Chairman
Bernanke
Cc:
Scott
Alvarez;
Patrick
Parkinson;
BrIan
Madigan
Subject:
Lehman
Ben,We
had
twocallswithfrbnythisafternoon
on
thissubject.ThefirstincludedTreasand
SEC;
thesecondjust
us
andTreasury.Lehman
has
settledonthe6bcapitalinfusionthisafternoon
and
putout
an
announcement
tothat
effect.
It
came
outafterthemarketcloseandIdon'tknowwhat
it
effect
it
had
on
after-hourstrading.Duringthetradingdaytheirstockfellanotherfewpercent,a
bad
showingrelative
to
theotherfinancialsectorstockswhichmostly
rose
afewpercent.
CDS
spreadsdidn'tchangemuchduringtheday.Theirliquidityisstickingprettywell,
but
somecounterpartiesareaskingformoremarginanddialingbackexposures,sothere'saslowerosiongoingon.Tosomeextentthedrop
in
stockpricesandcounterpartycautionreflectspossibilitythatthis
is
Thursday
of
BS
weekend,andequityholderscouldwakeupMondaymorningwithnovalue.Flildtalked
to
Tim
and
to
Steellatethisafternoon.
He
really
has
no
alternative
plan
atthispoint.Liningup
SWF
investorsisaslowprocessandthere
is
nobodyisinterested
in
buyingthem.Timand
Bob
HIGHLYCONFIDENTIAL
FRS
to
LEHExaminer000781
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