Lehman’s Tentacles

Bleak Monday, courtesy of the Lehman gang, left some tangential ripples in its wake. Lessons from Lehman:

1. Banking crises make investors think nobody’s going to want oil anymore, leading to the most pleasant gas prices we’ve seen in many months.

2. Bank insolvency peeves preferred shareholders, who harness lawyers to retrieve the money they feel is owed to them.

3. If you’re a bank and you’re next in line to fall, and the federal government won’t bail you out, the state might just give you the special favors you need.

4. If you’re owed money by a bank that recently perished, for God’s sake rush to the carcass (via the legal system) while the getting’s still good. Otherwise, you won’t have anything left to chew on.

5. While other people go crazy, you, the private citizen, can be an opportunist.

6. Celebrities are impervious to financial crises. Pay attention to celebs during banking crises. Envy, disgust, and amazement feel much better than panic.

  • Steve.

    No, oil is not dropping because of the banking crisis. Speculators are seeing that Congress is going to vote to lift Congress’ ban on offshore drilling and the speculators are dumping oil.

    Although the US was using less oil for months, oil had risen to $147 when the President lifted the Executive ban on offshore drilling. The price fell back and even fell during 2 major hurricanes when the price would normally go up a little. With both Congress and the President on the same page, the oil bubble has finally burst.

  • Drea

    Steve, good point. I thought that was an unusual connection. Would you say that the banking crisis had *nothing* to do with Monday’s selloff? The article that I got the info from (linked) seems to have some evidence that it does.