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Lehman Brings Back Shades Of Enron

When In Doubt, What Else? Cover It Up..

The collapse of Enron and Worldcom was supposed to teach both Wall Street and Main Street what the consequences of moving bad things off the books would lead to, the collapse of the firm. Yet, in the case of Lehman Brothers, it seems that no one was paying attention.

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Enron was known for moving an empty barge down the river and counting it as two barges. They were also known for moving losses off of the main books into limited partnerships that operated as separate entities. In both cases there was plenty of flim-flam involved. Yet, Lehman Brothers may take the cake and make Enron look amateurish.

According to The Wall Street Journal: "A scathing report by a U.S. bankruptcy-court examiner investigating the collapse of Lehman Brothers Holdings Inc. blames senior executives and auditor Ernst & Young for serious lapses that led to the largest bankruptcy in U.S. history and the worst financial crisis since the Great Depression.

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S & P 500 Makes New High

The S & P 500 moved to a new high from the March 2009 bottom on 3-11 a bit more convincingly than on 3-10. The benchmark index closed above the 1116-1120 resistance band on 3-4 and has steadily added to its gains since then. The next test is what happens at 1150, where the index closed on 3-11.

The Russell 2000 Index of small stocks (RUT) also made a new high from the March 2009 bottom on 3-10 as did the the NYSE advance decline line. This remains a bullish sign for the market.

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