Derivative traders open session to reduce Lehman risk(unthinkable is thinkable now)

Reuters ^ | 09/14/08

[TigerLikesRooster]

Derivative traders open session to reduce Lehman risk

Sun Sep 14, 4:04 pm ET

NEW YORK (Reuters) – A rare emergency trading session opened Sunday afternoon to allow Wall Street dealers in the $455 trillion derivatives market reduce their exposure to a potential bankruptcy filing by Lehman Brothers.

U.S. regulators and bankers were making last-ditch efforts on Sunday to prevent toxic assets from ailing Lehman Brothers (LEH.N) spilling into global markets and rupturing investor faith in the international financial system.

"This is an extremely, and I stress extremely, rare event. It also speaks to the more general notion that, in today's highly disrupted financial markets, the unthinkable is thinkable," said Mohamed El-Erian, the chief executive of Pimco, the world's biggest bond fund, based in Newport Beach, California.

The session opened at 2 p.m. and was due to run until 4 p.m. New York time, according to the International Swaps and Derivatives Association.

Trading involved credit, equity, rates, foreign exchange and commodity derivatives. ISDA confirmed a "netting trading session" was taking place for over-the-counter derivatives, in which trades that offset each other are settled.

ISDA estimates the OTC derivatives market excluding commodities has a value of $455 trillion.

[TigerLikesRooster]

This is an extremely, and I stress extremely, rare event. It also speaks to the more general notion that, in today's highly disrupted financial markets, the unthinkable is thinkable

They now get it. Too late.

[TigerLikesRooster]

We have a ‘black swan,’ ping!

[OKIEDOC]

Hey, correct me if I am wrong but are not most of these Wall Street companies that are going broke run by graduates from Ivy League Schools??????????????

This does not speak so well of Obama and his connection to Colombia and Hardboard......

[OKIEDOC]

Hells bells it was just last year that CEO’s were getting 200 million dollar bonuses and even some of the very lower underlings got $150 to $250,000 dollar bonuses.

Wall Street is suffering GM ITIS.

[TigerLikesRooster]

Many smart people tend to develop hubris which eclipse their own intellect. The net result is decidedly negative.

[BGHater]

Europe is taking a beating right now. Asia had one earlier. The Circuit Breakers might get used today.

Symbol	Name	Last Trade	Change	Related Info
^ATX	ATX	3,188.19 5:02AM ET	133.01 (4.00%)	Components, Chart, More
^BFX	BEL-20	2,972.03 5:18AM ET	108.57 (3.52%)	Chart, More
^FCHI	CAC 40	4,150.88 5:18AM ET	181.78 (4.20%)	Chart, More
^GDAXI	DAX	6,021.44 5:02AM ET	213.45 (3.42%)	Chart, More
^AEX	AEX General	385.10 5:18AM ET	14.47 (3.62%)	Chart, More
^OSEAX	OSE All Share	413.31 5:02AM ET	17.93 (4.16%)	Components, Chart, More
^MIBTEL	MIBTel	21,080.00 5:18AM ET	669.00 (3.08%)	Components, Chart, More
^IXX	ISE National-100	80.43 Sep 12	0.00 (0.00%)	Chart, More
^SMSI	Madrid General	1,188.37 5:15AM ET	39.03 (3.18%)	Components, Chart, More
^OMXSPI	Stockholm General	261.91 5:17AM ET	8.83 (3.26%)	Chart, More
^SSMI	Swiss Market	6,997.77 5:17AM ET	217.73 (3.02%)	Chart, More
^FTSE	FTSE 100	5,227.70 5:02AM ET	189.00 (3.49%)	Components, Chart, More

[TigerLikesRooster]

It looks bad.

[OKIEDOC]

I think by golly you have described that arrogant narcissistic community organizer Obama.

[CapnJack]

“This does not speak so well of Obama and his connection to Colombia and Hardboard......”

Wrong ... this financial collapse will only benefit Obama since the blame will (as reported by Fox.com in their Lehman article) be placed on the Bush Admin.

Obama will most likely start today to hammer the Repubs. for the financial woes occurring on Wall St. and the mortgage industry. When people start to see their 401K’s and IRA plans plunge in the next week or two it will be Bush and the Repubs. that will be blamed by the media and Obama ... it will not be a good couple of weeks for McCain/Palin.

[OKIEDOC]

CapnJack wrote:
Obama will most likely start today to hammer the Repubs. for the financial woes occurring on Wall St. and the mortgage industry. When people start to see their 401K’s and IRA plans plunge in the next week or two it will be Bush and the Repubs. that will be blamed by the media and Obama ... it will not be a good couple of weeks for McCain/Palin.

REPLY:

Yes the media and Obama will try to blame the current financial condition on Bush and his administration.

However, it will also point out that some of Americas greatest experience in the financial world did not have enough common sense to see that the financial sky was actually falling.

Many of us somewhat uneducated on FR were posting cautionary comments about Wall street and our out of control financial conditions as early as two years ago.

We were also laughed at quite often by many FReepers as being nothing but old negative Scrooges.

[oblomov]

Amateurs built the ark; experts built the Titanic.

[se_ohio_young_conservative]

I never dreamed I would live to see it ! These educated morons are doing everything possible to lead us into a depression. It is like an endless stream of terrible decisions.

We never learned from our mistakes. and there will be hell to pay.

[OKIEDOC]

As I have posted many times ever since Obama got the nomination he is the most dangerous man in America.

Obamas kind of hope and change is predicated on a vibrant economy and his high taxes on everything will kill any chance of that happening.

Then for the next four years we will have a lot of people who will cry themselves to sleep for what they did to their country.

It is hard to drain the swamp when were up to our asses in Alligators.

[se_ohio_young_conservative]

Obama is a lot like Herbert Hoover. He wants to make the same mistakes.

[samtheman]

Hey, correct me if I am wrong but are not most of these Wall Street companies that are going broke run by graduates from Ivy League Schools?

My wife and I were saying the exact same thing last night!

What has America gotten from all these genius graduates from the top business schools in America?

Absolutely NOTHING!

These geniuses are the ones (like the CEO of Merrill Lynch) who made the decision to invest full bore in the sub-prime lending market.

And these are the geniuses who surround the zerObama campaign.

[central_va]

Derivative traders open session to reduce Lehman risk(unthinkable is thinkable now)

Looks like the "hall of mirrors" that the US financials has become is about to come crashing down. Boo-hoo. I am glad that dried up old fish is going to live to see it.

[FReepaholic]

...A rare emergency trading session opened Sunday afternoon to allow Wall Street dealers in the $455 trillion derivatives market reduce their exposure to a potential bankruptcy filing by Lehman Brothers...

Well that's nice but what about mom and pop? Why weren't they given the same chance to dump Lehman stock before the announcement?

[Centurion2000]

Well that's nice but what about mom and pop? Why weren't they given the same chance to dump Lehman stock before the announcement?

What good is being rich if you can't flout the rules and run to uncle sugah every once in a while? /sarc

[Travis McGee]

Big time.

[raybbr]

ISDA estimates the OTC derivatives market excluding commodities has a value of $455 trillion.

Nothing on this planet is worth that much. What is the "derivative market" backed with?

They "claim" its worth $455 trillion but it's just paper.