Lehman Brothers have weathered the subprime scandal better than many of its fellow investment banking houses. Yet the storm is near far away. It looks as though 3 state governments in Australia are prepared to take Lehman to court for damanges in palming off CDO's or collateralised debt obligations, those fancy financial instruments, which allowed the investment banks to salami slice mortgages and sell them off piecemeal to the willing and the unsuspected for a return of anywhere from 20 to 30 per cent. The housing bubble has burst and the chickens are coming home to roost, and the fallout is far from over. So Lehman & co. are wide open for law suits and possible criminal action for slick debt financing. Law suits will spread like oil on a fire and will catch other banking houses. As such the writing is on the wall the more especially since the world financial markets are not prepared for the shocks.
Christimas time is Santa's rewards for Lehman and the investment banking industry. Already Goldman's Blankfein is bruited to be getting us$70m as a bonus. Lehman's head honcho should get a healthy big multi million dollar bonus too, and this in times of looming recession and scandal and knowingly following a guillible public of the rich with debt obligations built on sand.
Let the fines mount, the Moneybags suffer social oppobrium if not time in the slammer.
The time for banking regulations...strict and stern...has come!
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