Special favors

What a swell favor the Federal Reserve performed on behalf of Lehman Bros.

In an apparent attempt to prevent a repeat of the cascading rumors that helped sink Bear Stearns Cos., the Federal Reserve last month quietly called one major bank to see if it had pulled a credit line from Lehman Brothers Holdings Inc., people familiar with the matter said.

Responding to a July rumor that Credit Suisse Group planned to pull a line of credit to Lehman, Federal Reserve officials called to see if it was in fact true, according to these people. Credit Suisse told Fed officials there was no truth to the rumor and it had no intention of pulling the line of credit, the people said.

First rhetorical question: Wouldn't it be nice if the Fed launched an investigation when someone starts talking smack about your business?

Second rhetorical question: What if Credit Suisse actually had yanked the credit line?  What would the Fed have done then?  OK, maybe that's not so rhetorical.  But I prefer not to think about the answer.

Not that any of this made a difference to Dan Amoss' Strategic Short Report members.  While Lehman shares have tanked 77% this year, Dan's readers had the chance to bag 224% gains on half a position in Lehman put options… and 462% gains on the other half. 

Sound intriguing?  Through midnight EDT tonight, you can access Strategic Short Report for a special discounted price.  Learn all about it here.