Lehman Brothers stock plummets

Story link: Lehman Brothers stock plummets

Wow, Lehman Brothers stock is taking a beating on the Dow Jones today. Yesterday it opened at around 22 cents, then yesterday it was down to 17c. Now it’s down to just under 14c.

That’s a pretty bad fall, and seems connected to the bond worries, riding on the back of bad news with Freddie Mac and Fannie Mae liabilties:

Lehman Bond Risk Rises to Four-Month High, Default Swaps Show

The cost of protecting Lehman Brothers Holdings Inc. debt from default rose to the highest in almost four months, according to traders of credit-default swaps.

Contracts on the New York-based broker jumped 15 basis points to 340, the highest since March 19, according to Phoenix Partners Group at 7:32 a.m. in New York.

A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.