'The market responded with enthusiasm today to reports that the Tooth
Fairy has agreed to acquire Lehman Brothers. The purchase price has not
yet been determined, but will be set by Lehman CEO Dick Fuld wishing upon
a star, clicking his heels three times, and being transported back to that
magical kingdom where Lehman still sells for over $70 per share.
In related news, Lehman has agreed to sell all of its Level III capital,
including CDOs, ABSs, pet rocks, baseball cards, firm umbrellas, and
credit default swaps written by MBIA and Ambac. Lehman's Level III capital
will be acquired for 150% of its face value by Tinkerbell, who will carry
it off to Never Neverland, where it will be fed to a crocodile. Lehman is
financing 90% of the acquisition at an interest rate usually reserved for
subprime borrowers; Tinkerbell's upfront payment consists of a handful of
pixie dust, three crickets, and a bullfrog. Ladenburg Thalmann bank
analyst Dick Bove estimates that the bullfrog could eventually be
transformed into three princes and a pumpkin coach (but doesn't want to be
quoted in case he is sued).
The deal gives Lehman no recourse to any of Tinkerbell's assets other than
the Level III capital. If Tinkerbell defaults, Lehman's successor entity
will stick its hand down the crocodile's throat and attempt to get it to
regurgitate. The firm's historical value-at-risk analysis shows that
sticking your hand down a crocodile's throat is completely safe.
Treasury Secretary Hank Paulson issued a statement: 'I am delighted that
SWFs (Sovereign Wealth Fairies) continue to express confidence in the
terrific values represented by American financial institutions. As I have
been saying since August of 2007, this shows that the crisis is now over'.
Meanwhile, US regulator the Securities and Exchange Commission (SEC) has
announced an investigation of mean, evil, bad short-seller Captain David
Einhorn. While out for a beer with a friend, Einhorn reportedly suggested
that the Tooth Fairy might not exist, and that wishing upon a star is not
a wholly reliable price discovery mechanism (although he accepts that it
has been a commonly-used methodology in the past). Christopher Cox,
chairman of the SEC, said, 'Vicious rumors attacking the Tooth Fairy will
not be tolerated. Our entire financial system, and indeed the American way
of life, depend on the Tooth Fairy and wishing upon a star. How else could
one value Level III capital appropriately ?'. The SEC is reportedly
planning to set up re-education camps for short-sellers in Guantanamo
Bay'.