The Swiss dancers in their lederhosen are coming to save us all the way from Paradeplatz, home to Credit Suisse, the bank that has just offered to buy damaged Lehman products from those privy to the Credit Suisse private banking network.
It’s great that Credit Suisse is offering to buy back Lehman structured product debt. We are keen to see such a generous and positive response from the investment banking community to the current troubles and would ask only, where are all the others queuing up to buy Lehman debt?
Credit Suisse has a history of such generosity. After the LTCM collapse and the Russian government default, it was the bank that came with a positive message to its investors, offering to buy them out of their distressed debt.
But step back and take a better look and ask the question, AT WHAT PRICE DID THEY BUY THAT DEBT?… In the eye of the financial storm that hit Russia in 1998 the folks at Paradeplatz thought a bid of 17 cents in the dollar was good enough to secure Russian government debt. Two and a half years later that debt was apparently then sold for as much as 80.
Perhaps the smarter damaged investor should wait for administrator PricewaterhouseCoopers to do its thing and see if the recovery value is higher. But, again, thanks for the generous offer...
