The clock is ticking on Lehman

All news reports are pointing to Lehman filing for bankruptcy tonight. I was talking to a broker friend who was at work this afternoon closing trades to offset Lehman risk in the market. The trader at Lehman told my friend that many top level managers were in their offices clearing out their desks. True, I do not know but it is clearly just a matter of time.

Merrill Lynch is reported to be doing the smart thing and is being bought by Bank of America, again unconfirmed. It makes sense to me, I do not see anyway that an investment house can remain independent in this environment. Most of their really profitable businesses are gone, and they will never be able to leverage themselves as they once did to gain over sized profits.

My boss called me about 30 minutes ago and was heading into the off to assess the mark to market of all Lehman deals on our books. I thought the worst was behind us but I guess I was wrong.

Good Luck and Good Currency Trading.