Being in New York City, and more specifically in Times Square, I could not help but take a walk over to the World Headquarters of Lehman Brothers today. It was a sad sight to behold. The lights are on as if everything was normal, but looking in the windows you only see a few people chatting away on their wireless headsets while pacing.

News crews and onlookers converged on the office building that still proudly proclaims the Lehman name. Passers by were quick to snap photos as if they had a feeling that having such a photo would carry some meaning years later. From the outside all appears to be well, but it was the inner workings that spelled the end for Lehman. The sidewalk at the main entrance features an artist with a portrait of Lehman’s chief who is allowing passers buy to sign the piece. Looking at what was written, it is not very complimentary.

Looking to satellite radio, one has to wonder how the credit crisis will impact the company. Clearly, the confidence of the street as well as retail investors is shaken. Invests are supposed to carry risk, but there is always some security in many companies. With the big financials falling on their swords, it becomes hard to tell what is healthy and what is not.

Sirius XM Radio has been impacted by all of the financial happenings as well. They have a debt issue that is looming, and ever tightening markets in which to operate. It is a challenge that will not seem to go away, and stands before everyone like a wall.

The question at this point is whether or not Sirius XM Radio is a healthy company, or a struggling company. The answer depends on how much weight you put on various metrics. If the debt is the biggest determining factor than the equity has a lot of question marks. If top line growth and cash flow are the metric then there could be an argument that the company has health and a decent outlook. There is no denying that the company is growing, and that many metrics are seeing better year over year comparisons, but we are now dealing with a merged company, and the unknowns that surround the satellite radio sector.

At this point investors have gone from wild merger anticipation to convert disappointment, to debt worry, to overall desperation. I have said many times that investors in this sector are battle fatigued. Now they are not only battle fatigued, but frustrated, angry, and depressed as well.

An A-La-Carte radio will not solve this situation, nor will “Best Of” programming. The only solution in my opinion rests with the quarterly results and solving the debt issue. We are quite a ways away from knowing the Q3 numbers, and even when they come out they will likely include many merger related expenses. The financial company’s are not yet out of the woods, and thus, all we have are question marks and speculation.

So at Lehman, the lights are on but no one is home. What is happening at Sirius XM. The music is playing, but is it an even keeled classical tune, an upbeat jazz song, or the debt refinancing blues? Only time will tell. With the stock now well below a dollar, will the artist soon be camped out in from of Sirius XM Radio’s headquarters only a block away? I do not see the current situation as that dire, but also know that investors are at their limits and beyond. In my opinion, virtually any financing of the Sirius XM debt would be a welcomed relief at this point. It is hard to fathom, but people may even be happy to see a loan at 15%! Would it reverse the stock? That is another “time will tell” question, but again, the battle fatigued investors are at a point where they will be relieved with a break even day.

Position – Long SIRI