Should we be worried about the markets?
Should we be worried about the financial markets? Well I think so. When companies like Lehman Bros lose 50% of their share value for the first time in their very long history, and then start scrabling around trying to raise money on the stock exchange. When major banks are being bailed out by reserve banks. When many shares are in freefall due to the jittery markets, and when the price of oil is just on a drunken rampage full of its own importance and value. When world powers can’t find a workable alternative solution to the oil producing states having their foot on our necks. Yes I think it’s worrying.
This may be why some prefer holding gold, commodities and digital currencies hoping to hedge against the falling dollar value.
| Lehman records $2.8 billion loss, looks to raise $6 billion Trading, hedging losses drag down i-bank’s Q2 results; ‘very disappointing,’ says CEO Fuld |
June 9, 2008
| (Reuters)—Lehman Brothers on Monday announced plans to raise $6 billion to bolster its capital base after losses from trading and hedging resulted in an expected $2.77 billion second-quarter loss for the investment bank.Lehman said it expects to offer common stock and convertible preferred stock through public offerings, diluting existing shareholders.Questions about the health of Lehman, Wall Street’s smallest major investment bank, have soared in recent months following the collapse of smaller rival Bear Stearns Cos, which was acquired at the end of May by J.P.Morgan Chase/
“It’s not all gloom and doom, but certainly not brilliance from Lehman, not a very good start to the week,” Angus Campbell, head of sales at Capital Spreads. Lehman, based in New York, projected a second-quarter loss attributable to common shareholders of $2.87 billion, or $5.14 per share, for the quarter that ended May 31. That compared with a Reuters Estimate forecast for a 38 cent-per-share loss. That compared with a profit of $1.26 billion, or $2.21 a share, a year earlier, and $465 million, or 81 cents per share in the first quarter. Net revenue is expected to be negative $668 million, compared with positive $5.51 billion a year earlier, Lehman said “I am very disappointed in this quarter’s results,” CEO Richard Fuld said in a statement. He said the company has strengthened its balance sheet since March, and is “well positioned” to executive its business strategy. The company said it reduced gross leverage to below 25 times from 31.7 times at the end of its first quarter. It said it has also cut exposure to residential mortgages, commercial mortgages and real estate investments 15% to 20% each. Since then full results are out, and they look worse than expected.What do you think? Write in and tell us by leaving a comment.Moneypenny |
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