PROGRAMMING NOTE: Episode 40 will be the final one for 2020. Episode 41 will pick back up in early January, ~10th.
























Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski, possesses outside information. Artwork by David Parkins.


40.1 Fed had Inside-Info that Lehman Bros Would Die
Ben Bernanke was informed that Lehman Bros. was believed finished, on June 13, 2008 – 94 days before the bankruptcy. JPMorgan, with its seat at the heart of the repurchase agreement market, was acting on this belief. Internal Fed emails suggest the Fed thought JPMorgan was nuts.

[Emil’s Summary] In the middle of the 17th century, Athanasius Kircher — “one of Europe’s most successful scholars” — published “Egyptian Oedipus”, a magisterial three-volume folio on Egyptology that “presented Latin translations of hieroglyphic inscriptions”. The three-tome folio of ornate illustrations and diagrams was the product of “more than two decades of toil”; it sourced Arabic, Aramaic, Coptic, Ethiopian, Greek, Latin, Oriental and Samaritan texts. Kircher had illustrated “mummies, sarcophagi, Canopic jars, sphinxes” as well as “almost every hieroglyphic inscription known to Europeans” and translated them “character by character, into Latin prose.” It was wholly and “utterly mistaken”.

In the late 19th century, William F. Warren was “one of the outstanding figures” of education, noted his 1929 New York Times obituary. He was a charter member of both the New England Conservatory of Music and Wellesley College. He spent 45 years at Boston University, including three decades as president during which a number of progressive firsts occurred, such as America’s very first female PhD. He authored eight books, including “Paradise Found” in which, drawing on his knowledge of “the great epic folklore of the Hindus, the Celts, the Chinese, the Persians”, and footnoting in French, German and Greek, “he arrived at the inevitable conclusion: the Garden of Eden is at the North Pole.”

Are we, in the early 21st century, free of such erroneous scholarship? Was then a superstitious past and now a scientific present? If our scholarly leaders were presented with evidence, if they had inside information, if they were imbued with power to compel actors to share data would they goal-seek a result, like Kircher and Warren? In Part 1 of Episode 40 Jeff Snider reads through official Federal Reserve emails covering the final 90-some days of Lehman Brothers’ existence. It turns out our scholars are human too.


But first, this from Eurodollar Enterprises!  Friends, are you a central banker?  Have you been invited into the home of a member of the financial press to celebrate Christmas or Hanukkah or Ramadan or Pancha Ganapati or Kwanzaa or Saturnalia or Yalda or Koliada or Festivus but have nothing to wear?  Then the new line premium quality bathrobes from Eurodollar Enterprises is for you!  Yes, arrive adorned in 800-thread count, plush Egyptian cotton emanating entitlement and overconfidence with devil-may-care flair. Each robe comes with your initials hand-stitched on the sleeves, and for that added touch of superiority, the logo of a regulated institution and your prospective employer, will be emblazoned over the breast pocket. Premium quality bathrobes!  New!  From Eurodollar Enterprises.


00:05 On June 13, 2008 Chairman Bernanke received word that Lehman was not expected to survive
04:13 The Fed saw that Lehman’s repo market assets fell QoQ – and pronounced that good news!
07:53 The Fed saw that Lehman was losing repo market clients – and pronounced that good news!
14:55 What role did JPMorgan play? What is a tri-party repo system?
18:24 Days before wipeout, a Fed email noted Lehman wasn’t the problem, the system itself was
21:30 What is the moral to the June-July Lehman-Fed Emails fable?


Vaccine Euphoria and Inflation Hysteria Obscure Dollar Problem:
Alhambra Investments Blog:
RealClear Markets Essays: