Seven Years Later...

Spring 2001...

The equities bear market rages on... a friend and I are walking around downtown Montreal. "I tell people that banks can go bankrupt and they give me a blank stare," he says. "They think I'm young and crazy; they think the Great Depression won't happen again. Yet they can't say why they believe this. They just believe it blindly".

"You're right", I respond.

On Friday I bought some 22.5 Bear Stearns puts @ 3.50 (almost bought 'em on Thursday but hesitated). Earlier this evening the catalysts occurred. Jamie Dimon and the appropriate authorities have delivered what is my greatest investment ever: 500% profit in one trading day.

Is Lehman next? Will the extension of credit to primary dealers calm people down? One can only wonder... or ask reliable sources... I'm probably going to buy puts on one of the IBs but not Lehman. Here are some reasons why it shouldn't be Lehman.