The market seems to be selling-off on the back of limited bad news imo, apart from the dollar that is.

If you can hold your nerve and apart from any short term requirements to offload poor performing stocks, I have a couple!!, my advice would be sit tight. This does not have the feel of the tech(mining!) bubble at all. Difference being there are a lot of good fundamentals, unlike in 2000 when there were a lot of over rated nothing companies.

Interesting e-mail just landed on my desk.
The major brand of Lehman brothers for the UK sub-prime lending market is withdrawing from the second charge market as of next month.
They claim it is to consolidate other brands (ie lose them) and concentrate on first charge lending, but this may be their reaction to forecasts of lower house prices.
In a lowering house price environment, sub prime second charges are almost worthless and by getting out of that arena they may protect the rating they have on first charges.
As I say, interesting, but you can read it as you wish. Just my interpretation.
Alan

What a load of tosh Lehman is not a building society didnt you know?

No but they do own, outright, 3 of the largest subprime lenders in the UK (SPML,LMC & Preferred) plus they supply the subprime lending arm of Northern Rock. Or didn't you know?
Please get your facts absolutely right before trying to rubbish me.
Next.

If that is correct tell me what the total exposure is in relation to Lehman's NAV.

I have no idea of their exposure but the facts are as stated.
The brand being pulled is LMC (the smallest and most sub prime of the 3) and the 2nd charge outfit that is being pulled is SPPL.
My source is the company themselves, and the exposure to the 2nd charges will be between 6 and 12 months gross second charge lending throughout the UK, as they usually do not sell their "book" on until they have 6 to 12 months payment record.
The danger is that if delinquincy rises, the book becomes worth less, reducing profit and the lowering of the profit and increased risk from non recoverable debts lowers their own rating, making their borrowing across the group, more expensive and their first charges either less attractive or less profitable. They need to avoid this.
Alan

You like many people are unable to answer the question sub prime lending is just a small part of a banks lending activities. It is rather like saying if all Barclaycard users failed to pay Barclays would go out of business. I think at last the markets are beginning to realise that this sub prime scare is just another way for dealers to make a buck during the lazy days of summer. Keep trying to scare people!!

No axe to grind here. Check the threads. I have always been very bullish on both property and the markets in general.
Ask cynic!!! ;-)
I even debated the difference with him between US sub prime and UK sub prime.
The point is though very valid. The parts Lehman Bros have decided to shed are the very riskiest areas of their lending portfolio (and therefore the most profitable). LMC are a veritable last chance saloon for borrowers and 2nd charges are notoriously wobbly in static or falling property markets.
It is not the few hundred million they are exposed to in these markets that is the issue, it is the loss of confidence among their backers and the fickle ratings of S&P etc. that make them a little more cautious. A loss of confidence or rating would cost the entire business much more than this in higher borrowing costs and lower margins, as many previous lenders will testify.
On the remaining 2 brands, margins over LIBOR have increased and underwriting has been toughened up which is probably an even greater signal of Lehmans reading of the near future.
Perhaps because I live in Yorkshire, I see no great crash or stampedes to the bankruptcy courts yet, but other areas of the country may be more volatile.

Yorkshire property market, especially the upper echelons is indeed still very strong ...... however, elsewhere it seems to be stalling, which is actually no bad thinbg

Glad to hear that, cynic, as my home for is up for sale and is in Yorkshire and is (I think) in the upper echelons for the area.
Good news all round. I might actually flog the damn thing.
Alan

out of curiosity, which agency are you using?

I am with Reeds Reins.
To be fair, the property has only been up for 4 weeks and we have had 2 offers, though I considered them too low.
I am not even that interested in selling!! Its just an acquaintance of mine has given me 3 acres in Scotland with OPP for a detached house, and it has always been a fancy of mine to live in rural Scotland. On a whim, I got it valued, realised that I could sell and build and be free of any debt at all, so semi-retirement beckoned. But if it doesn't sell, so what? I still have the land and the dream!
Alan

if you don't mind living in the wilderness in Scotland!
i have a paternal interest in one of the big agencies in Yorkshire, which is y i asked the q

now, now Mr C, take a look at the wilderness, it doesn't look too bad to me.

;-)

http://www.wildernessscotland.com/

tough luck if you run out of bread or forget to buy the milk though ... lol

so US employment figures are out, which have resulted in something of a sell-off in Dow indications - now forecasting -105 at the open.

It seems to me that the reaction was almost a foregone conclusion, for had the payroll figures been stronger, then the market would have concluded that no interest rate cut would be forthcoming and would have caused a sell-off fo that reason ...... now however, as below .....

The report is widely seen as making a rate cut certain, but it raised a debate whether it would be a quarter-percentage point or half-point cut.
Despite the markets' desire for a rate cut, stock futures fell on the report due to concerns that economic weakness is greater than had been feared

Fed to cut by half per cent and intimate further cuts to follow, they have been sitting on their hands too long.imho

from where did you get that info ... not apparent on cnn site

and the dollar becomes a tin pot currency - i think the fed will have a big problem deciding what to do

fed futures , see kyoto,s posting

Tune into squark!

70% chance now of a half cut.