Merrill Downgraded Again, But Real Story is Lehman

Although Merrill is set to report earnings in April, and analysts persist in making up numbers to show that they slashed earnings before the earnings release, the real story in the options market is Lehman. Much like the bets in the options market that predicted Bear's demise (please refer to my prior posts that pointed these out before the institution's near collapse), traders are betting that Lehman may be facing the same situation soon, in the next 22 days. Nearly every out of the money put has traded furiously today, with a particular emphasis on the ap 20's, which have changed hands nearly 10,000 times today with several hours remaining in the trading day. What's the story? Rumors must be flying around about Lehman's liquidity. Are the rumors true? Will the rumors be so persistent that they will kill Lehman just like they did Bear?