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  • socal77go socal77go Apr 12, 2008 3:27 PM Flag

    Paulson says "We must expect more bumps in the road"

    Check out Paulson's comments today:

    The third sentence of the third paragraph states "We must expect more bumps in the road" which is negative. This is immediately followed by the postive reading "Global financial institutions are making progress, with some announcing write-downs and acting to raise capital."

    So if the bumps in the road aren't related to write-downs, what is this a reference to? Additional financial failures?

    Maybe I am reading too much into the structure of the language, but I suspect high ranking government officials may know something you and I don't.

    I hypothesize there may be additional financial failures, with Lehman being the most probable candidate.

    If LEH's recent capital raising was surprisingly employed to bail out a couple of its funds, and it is so highly leveraged, perhaps liquidity isn't great with the firm.

    I currently don't have any positions in LEH, but I may buy out of money May puts on Monday.

    Feedback from LEH bulls as to why the stock isn't going down would be interesting.

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