Tuesday, September 16, 2008

Tuesday update: Lehman, REITs, law firms and half-full or half-empty?

So Lehman filed but is now back at the table with Barclay's to sell significant assets to them, AIG might be next (a trillion dollars?), the Fed meets today and may lower rates (100 bps = panic city?) and the market's in the tank. Oil prices? Down. What's up? The yen and the Euro.

REITs also took it on the chin. GGP is especially being hit heavy. I've written before that GGP's not going anywhere, but in this market all bets are off. My ex-partner, an ex-Wall Streeter, told me it was "absolutely inconceivable" that Lehman would go bust. Simon, according to David Bodamer, might be being beaten up unfairly.

The word on the street seems to be: perception trumps reality. Hank Greenberg on CNBC tells us that "it is in our national interest that AIG survive" and that it is a "national treasure." This is an open plea to the Fed to save it because he says the problem is only one of liquidity. He then tells us that an AIG bankruptcy will cause systemic problems in the market that an unwinding would be "as complex as it could be." (Call the lawyers!) How much of Greenberg's wealth and retirement is still tied up in AIG? Apparently a lot. And AIG's nt really reaching out to him either.

So is this a problem among opportunities or an opportunity among problems? Gerry Riskin has a great cartoon about this at his blog, and that's an excellent question not just for lawyers but also for the real estate market as well. It is a competitive opportunity.

And finally, on the law firm front: where will legal work go after this huge change in the market (cream rising to the top), and are Heller Ehrman's days numbered after yet another merger -- this one with Mayer Brown -- falls apart? I'll be sad to see such a fine firm collapse if it happens.

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