More Lehman Musing September 9, 2008 at 5:51 pm

HSBC at nightI’m glad I took profits on LEH and got out: it’s down 30% today. Dow Jones say that KDB are no longer interested, and the BBC thinks they have funding stress. Which they might well do. The WSJ reports heavy activity in the out of the money puts, while Reuters discusses the on again off again sale of Neuberger.

Surely this is a great time for a bid. Buying Lehman would finally catapult HSBC into the premier league of investment banking. BNP Paribas could use the US coverage, but they may be busy contemplating Fortis. It would be a fantastic trade for Unicredito too, and I wouldn’t put it past Ermotti — do they have the capital to spare though? And could they afford Lehman, even at current prices? RBS is sadly digesting ABN (what a silly purchase that was) and so probably isn’t interested. CIBC presumably had a look, as we know did RBC. I still like HSBC here…

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