MON. SEP. 15 - The Death Of Lehman

This is being written late Sunday night in an effort to make sure all Richard Rizzos are aware of what is going on- obviously, things may change between now and the morning, but this is the best that can be done at this time- again, in the interest of getting the information/thoughts/ideas out there

Following up on Friday since we were asked many quetsions about that entry- it was meant in terms of trading only. Obviously, Lehman (LEH) and everything associated with it will have vast reprecussions worldwide, but as a trading vehicle, the frenetic pace of movement did indeed slow down on Friday and we did not want day traders to get hurt scalping the stock for mere pennies when there were such gigantic moves in many other stocks. As for today, it is going to be an extraordinary session. First, lets discuss the death of LEH. A group of major banks and securities firms (including Goldman Sachs- GS among others) have announced plans to provide a $70 billion loan program which financial firms can tap if need be. Now, how this came to pass is something that is not appropriate for this space because it'd involve a great deal of speculation, but indeed, this is how it is. In the interim, LEH's $80 billion plus of 'bad' loans are going to be split into another entity. It is unclear who will suffer the majority of those losses except that the vernerable LEH will see ts shareholders be completely wiped out The second way this has played out is that it has created ripples across the financial world. AIG (AIG) - the world's largest insurance company- is now teetering on the edge of its own financial demise. They may announced some sort of plan today to try to avail themselves of their own problems- or else. Merrill Lynch (MER) is being bought out by Bank of America (BAC) for $29/share, a 70% premium to Friday's close as MER was apparently ordered to put itself up for sale over the weekend. It is unclear at this time if the deal is all cash, stock, a combination, and if the government will be involved. Throughout the day today, there will be rumors, conjecture, and wild swings; PLEASE BE CAREFUL. Today is a day that can make or break many day traders. If you find yourself mistaken on a position, get out. Nio questions. Do NOT get trapped. Conversely, do NOT scalp; this is a day whereby if you try to purchase thousands of shares of a stock like a Downey (DSL) because it is 'cheap,' you may find yourself down tremendously in rapid fashion. Be quick and be prepared; do all of the reading possible on everything and be ready to trade early.

Good-

MER/BAC- being bought out for 29. Trading in this and BAC will be fascinating today. On March 17 (When JPM boght out BSC), JPM closed higher. If BAC opens down, but rallies, buy thru unch. If not, a likely A-B-A2 to downside of grand magnitude as people fret over whether BAC overpaid.

JPM, WFC, ZION- all strong Friday; watch for any strength today as they seem to be survivors.

TRE- closed strong on Friday; if it holds unch, likely a buy thru 3.05

Bad-

AIG- There is no telling what their story will be; the stock may evaporate or htey may save themselves. It is either a major A-B-A2 off the open or if it opens well down and rallies, buy everything thru unch that you can stomach because if it does not go down today, it will have massive short covering as traders/investors feel the firm survives.

LEH- if it trades today, the stock will evaporate. Unless last minute suitors come in, only trade it to the short side if at all- but it is best to stay away.

CEBK- announced massive writedowns Friday afternoon. Likely A-B-A2 to downside

AGM- Farmer Mac. May follow in Freddie and Fannie's footseps.

GAP- traded absymally late Friday afternoon after closing off al ow. Watch for trouble with this belagured entity.

WB- will it follow WM and other banks?

MS/GS- will survive, but wonder if stocks crack very hard today as invstors wonder exactly what they have on their books

MEA- has been weak for days; somethnig strange going on.

EK- very weak on Friday.

PNRA- crushed Friday on the heels of CMG's warning.


GOOD LUCK TODAY.