Comments on: The scandalous Lehman CME auction http://blogs.reuters.com/felix-salmon/2010/04/14/the-scandalous-lehman-cme-auction/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: stevenstevo http://blogs.reuters.com/felix-salmon/2010/04/14/the-scandalous-lehman-cme-auction/comment-page-1/#comment-13497 Fri, 16 Apr 2010 00:44:37 +0000 http://blogs.reuters.com/felix-salmon/?p=3401#comment-13497 Of course he understands Aggregate Span Risk. He has a PhD in Derivatives from the University of Wikipedia.

So obviously he reran the scanning risks to verify his above conclusion. Probably used Adesi-Whaley valuation and I’m guessing Newton’s method to iterate convergence. Quite a sophisticated model if you ask me.

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By: Greycap http://blogs.reuters.com/felix-salmon/2010/04/14/the-scandalous-lehman-cme-auction/comment-page-1/#comment-13482 Thu, 15 Apr 2010 18:30:43 +0000 http://blogs.reuters.com/felix-salmon/?p=3401#comment-13482 alea is right: 450mm sounds like a lot until you put it in context of the entire position being assumed. And you neglected to mention why the CME was in such a hurry to unload the position: LBI was going to file bankruptcy next day. The that would have left the merc with all the risk, and a central exchange isn’t supposed to be a risk-taker, remember? Otherwise, the current push to move OTCs onto CCPs/exchanges won’t accomplish much in the way of safety.

However … what about the energy positions sold on Monday? The danger then wasn’t quite so imminent, and the numbers there were +622mm margin -482mm mark for 140mm net against a span risk of only 129mm. Superficially, that looks simultaneously far more lucrative and yet less urgent. What was the story there?

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By: jmk http://blogs.reuters.com/felix-salmon/2010/04/14/the-scandalous-lehman-cme-auction/comment-page-1/#comment-13477 Thu, 15 Apr 2010 15:07:55 +0000 http://blogs.reuters.com/felix-salmon/?p=3401#comment-13477 whilst people lose their jobs/houses and whatever else is going

the might GS takes another quick turn to help paying out egregious bonuses

all backed by the taxpayers’s generosity of course

v sad reflection of where the US financial system is going today…

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By: alea http://blogs.reuters.com/felix-salmon/2010/04/14/the-scandalous-lehman-cme-auction/comment-page-1/#comment-13471 Thu, 15 Apr 2010 09:29:52 +0000 http://blogs.reuters.com/felix-salmon/?p=3401#comment-13471 “The aggregate Span Risk – or
margin requirements – associated with these positions, $737,443,448, was greater than this amount.”
Do you know what means? Obviously not, the size of Lehman positions must have been north of $8 billion and Goldman got roughly at most a 5% discount in chaotic market conditions..and had to put up $292 million in margin.

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By: DanHess http://blogs.reuters.com/felix-salmon/2010/04/14/the-scandalous-lehman-cme-auction/comment-page-1/#comment-13466 Thu, 15 Apr 2010 03:32:09 +0000 http://blogs.reuters.com/felix-salmon/?p=3401#comment-13466 Keep up the good work. I wonder if these Goldmanites are troubled at all by all the dirty money they are spending.

Truly though, this situation is a drop in the bucket compared to all the welfare money going to Goldman Sachs in the form of interest-free borrowing from the government. Many of those guys would earn but a fraction of what they are making now in the form of taxpayer-subsidized welfare if they had to get real jobs. A chimpanzee and certainly a five year old could make money borrowing interest-free and then buying yield. If you look at their imcome breakdown, most of their revenue stems from trading related to government welfare policies; very little comes from investment banking.

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By: Judyjl http://blogs.reuters.com/felix-salmon/2010/04/14/the-scandalous-lehman-cme-auction/comment-page-1/#comment-13464 Thu, 15 Apr 2010 02:53:08 +0000 http://blogs.reuters.com/felix-salmon/?p=3401#comment-13464 and people are surprised ? why? because of Goldman’s “sterling” reputation? c’mon it’s it’s hardly a surprise and hardly anything new. Look at their profit figures for the past year or so, they had to squeeze it from somewhere.

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By: Engels http://blogs.reuters.com/felix-salmon/2010/04/14/the-scandalous-lehman-cme-auction/comment-page-1/#comment-13463 Thu, 15 Apr 2010 02:15:53 +0000 http://blogs.reuters.com/felix-salmon/?p=3401#comment-13463 The situation with Goldman makes me think of somebody gathering clues in a thriller movie. In a wall there are a lot crime scenes pictures, and for some reason Goldman just happened to pass by and was captured on every image. The sad thing is that the detective still hasn’t put all the pieces together.

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By: dariustahir http://blogs.reuters.com/felix-salmon/2010/04/14/the-scandalous-lehman-cme-auction/comment-page-1/#comment-13459 Wed, 14 Apr 2010 22:07:24 +0000 http://blogs.reuters.com/felix-salmon/?p=3401#comment-13459 Why was CME responsible for auctioning Lehman’s derivatives positions?

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