Tuesday, March 18, 2008
Is it a coincidence that many of the biggest losers today have Lehman Brothers as their biggest holders? Take a look at Breitburn, Constellation, EV Partners, Quicksilver Gas among others. All have Lehman as their biggest holders and all were down big fractions on an otherwise nice up day. Food for thought. Any ideas out there?
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joseph cioffi's Source Page - Associated Content
5 comments:
Joe,
I've heard from informed sources that some leveraged hedge funds have been forced to liquidate positions in MLP's. Some of these funds are leveraged up to 8 times asset values, and are getting margin calls and are forced to unwind positions. They aren't done yet either, and the selling pressure is likely to persist for a while longer. This, along with widening credit spreads, has been weighing down the sector for weeks.
I have been saying the same thing for the last two weeks. Massive margin selling, levered guys blowing up, etc, etc.
CEP at 13% yield...need I say more?
Lehman has a pretty big book of total return swaps linked to MLPs. They offer them to private clients to avoid the tax issues, and hedge funds use them for leverage, and to avoid having to files them as holdings.
So, the underperformance of Lehman holding almost has to be a hedge fund delivering, or worse clients pulling do to counterparty concerns.
When funds enter into a swap with Lehman, does that position appear on a funds 13f?
Maybe Im slap happy but, I'm buying CEP at these levels $16.05
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