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Subprime Is To Lehman As Prime Is To Lehman-Buyer Barclays?

Tyler Durden's picture





 

We won't spend too much time to dwell on the following pamphlet of sheer "buy, buy, buy" desperation from Barclays' Sandeep Bordia, suffice it to say that we now know which would be the first European blue light special "rescuer" of Lehman to go under courtesy of a massively wrong bet on PrimeX should the "illiquid" market continue to flounder. Which it will. We will add, however, that it would be damn poetic, not to mention hilarious, if while long and wrong bets on Subprime is what detonated Lehman, then being John Holmes'd in Prime is what leads to Barclays' bankruptcy (and we do already know that Barc is the bank with the second largest capital shortfall in Europe courtesy of that other bank which hopes to pick up the pieces upon blue's implosion, Credit Suisse). It would appear that the vultures are already circling... And where the vultures are, the squid can't be far behind.

The funniest bit from the Barclays' pitchbook:

Technical risk: Will there be forced unwinds of leveraged PrimeX trades in a negative macro event? While this is potentially more credible than other risks, several investors put in more equity in PrimeX trades than required. More importantly, we believe that these indices look fundamentally very cheap at current levels and adequately compensate investors for this additional risk.

Well of course you do. Yet we wonder: just who are these investors who put in "more equity" in PrimeX which is now effectively wiped out?

 

 


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Sun, 10/16/2011 - 12:37 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Barclays wants you to BTFD in PrimeX? You don't say.

A great way to measure deterioration in PrimeX will be the CNBC coverage. If they get all over it, it'll probably rally...

Don't US tbtf have massive inter-connectedness to Barclays?

Sun, 10/16/2011 - 13:20 | Link to Comment SGS
SGS's picture

Depends, I have to call Mozillo to see if this is a buy or not.

www.silvergoldsilver.com

Sun, 10/16/2011 - 12:21 | Link to Comment JlM CRAMER
JlM CRAMER's picture

I would put my career on the line for this one. A++++ Would buy again!

Sun, 10/16/2011 - 12:23 | Link to Comment Global Hunter
Global Hunter's picture

I just googled "PrimeX"...mortgage problem never went away I take it

Sun, 10/16/2011 - 12:31 | Link to Comment Market Efficien...
Market Efficiency Romantic's picture

SubPrime Is To Lehman As Prime Is To Lehman-Buyer Barclays? logic chain found in job interviews for Ibanking?

 

Sun, 10/16/2011 - 12:31 | Link to Comment Going Loco
Going Loco's picture

From FT:

 

'So what is the Markit PrimeX exactly? [And why on earth does it exist?] To discuss, let’s take a look at the family which the index belongs to..... The Synthetic RMBS Family...  And in case you are wondering who traded this errr.. stuff, here’s a handy table from the marketing presentation...  An important distinction between how these indices operate versus credit indices like the Markit iTraxx and CDX, is that these are “pay-as-you-go”. Under that model, which ISDA had the courtesy to standardise in order to [allow an incredible amount of leveraged subprime exposure to build-up in the system] alleviate otherwise overly burdensome operational constraints....'

I truly believe that when the history of the last few years is written most people who read it will think that the story was made up, that nobody, NOBODY, with a single functioning synapse could possibly think any of it was a good idea.

 

Sun, 10/16/2011 - 12:34 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Presently few people have 'functioning synapses' so what makes you think the future will have (somewhat) intelligent beings?

Sun, 10/16/2011 - 12:40 | Link to Comment Rainman
Rainman's picture

The humans who remember the old bucket shops are nearly all dead.

Sun, 10/16/2011 - 12:33 | Link to Comment Miss Expectations
Miss Expectations's picture

Zero Hedge is to Matter as Barclays is to Anti Matter.

Sun, 10/16/2011 - 16:13 | Link to Comment L G Butz PhD
L G Butz PhD's picture

Damn You!

My head hurts . . .

Sun, 10/16/2011 - 12:38 | Link to Comment bob_dabolina
bob_dabolina's picture

The headline of this article brought me back to the analogy section of the SATs

Sun, 10/16/2011 - 16:41 | Link to Comment knukles
knukles's picture

My penis is to large as Jim O'Neill's forecasts are to reality.

Sun, 10/16/2011 - 13:08 | Link to Comment Atomizer
Atomizer's picture

On a side note, does anyone see how transparent the DHS is regarding OWS?

 

A new Fact Sheet we are releasing today outlines our three main objectives:

  1. Support and coordinate efforts to better understand the phenomenon of violent extremism, including assessing the threat it poses to the Nation as a whole and within specific communities;
  2. Bolster efforts to catalyze and support non-governmental, community-based programs, and strengthen relationships with communities that may be targeted for recruitment by violent extremists; and
  3. Disrupt and deter recruitment or individual mobilization through support for local law enforcement programs, including information-driven, community-oriented policing efforts that for decades have proven effective in preventing violent crime.


To implement this approach, DHS is working closely with our federal and international partners, as well as our many partners at the community, state, local, and tribal level across the country. We are an important partner in supporting the National Strategy on Empowering Local Partners to Prevent Violent Extremism, which President Obama released last week.

http://blog.dhs.gov/2011/08/how-dhs-is-countering-violent-extremism.html

 

Back in 2009, this advisory was released

 

Statement by U.S. Department of Homeland Security Secretary Janet Napolitano on the Threat of Right-Wing Extremism

Release Date: April 15, 2009

For Immediate Release
Office of the Press Secretary
Contact: 202-282-8010

http://www.dhs.gov/ynews/releases/pr_1239817562001.shtm

We are filled with daily comedy on threatened central planning stages. LOL

Sun, 10/16/2011 - 16:37 | Link to Comment L G Butz PhD
L G Butz PhD's picture

Statement by U.S. Department of Homeland Security Secretary Janet Napolitano on the Threat of Right-Wing Extremism

but wasn't that a recipe for making Tea Party Kool Aid?

aren't they dealing with different ingredients now?

they best watch out or they'll bring back the ole bread & gravy song

On Monday we had bread with some gravy.
On Tuesday was gravy and bread.

On Wed. and Thur. was gravy and toast,
which is nothing but gravy and bread.

So Friday I went to the landlord and asked for us something instead.

And on Staurday morning by way of a change
we had gravy w/o any bread.

 

Sun, 10/16/2011 - 13:09 | Link to Comment JlM CRAMER
Sun, 10/16/2011 - 15:25 | Link to Comment Gohn Galt
Gohn Galt's picture

Link no longer available?  Is it somewhere else?

I guess it was down, the link is working now.

Sun, 10/16/2011 - 13:10 | Link to Comment Seasmoke
Seasmoke's picture

Never for money, home is for love.......we are getting closer

Sun, 10/16/2011 - 13:21 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Everybody ready for next week? 

Will it be Moanday or Tooeasyday? Sure feels like somethign has to give. Barclays is worse than it's Bitelays.

It's never the obvious thing, always from left field.

ORI

Speechless

Sun, 10/16/2011 - 13:27 | Link to Comment abugarance
abugarance's picture

hey Jim, thatks for that link...Alessio is a fucking legend..."there is no democracy...at the end of the day, the government is a slave to GS and MS"...crucify the bitchez...

Sun, 10/16/2011 - 19:10 | Link to Comment disabledvet
disabledvet's picture

surprised there aren't more comments on this subject. "they only dream of one thing, sir." "What's that?" "Revenge." And for that we are all to be scarred for life. Forget TBTF people and just think "too phuckin' big" cuz what's happening sure doesn't look like it has commerce as a goal but anger and rage...effected of course.

Sun, 10/16/2011 - 19:34 | Link to Comment Coldfire
Coldfire's picture

Barklays.

Mon, 10/17/2011 - 06:28 | Link to Comment merizobeach
merizobeach's picture

"And where the vultures are, the squid can't be far behind."

 

Nice.  I come here for the laughs as much as for the news.

I'm told this one was published about a year before the Fed: http://i.imgur.com/uyF5l.jpg

Do NOT follow this link or you will be banned from the site!