Lehman (LEH): Early Betting Begins On Massiveness Of Q3 Writedowns

With two weeks to go until the end of Lehman’s (LEH) FQ3, analysts are floating estimates of the latest round of writedowns and losses. Per the WSJ, the current consensus appears to be a loss of $1.8 billion – $2.6 billion for the quarter.

The $6 billion Lehman raised in June should be enough to allow it to absorb losses of this magnitude. The company still has enough junk on its balance sheet, however, that larger losses can’t be ruled out. Specifically:

  • $64 billion of mortgage and commercial real estate
  • $10.2 billion of Alt A
  • $11.5 billion of exposure to LBO financing.

See Also: Lehman Scrambling to Raise Capital, Horrified By Idea of Mortgage-Crap Firesale


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