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  • Lehman says thanks for sticking around

    Posted Jul 03 2008, 10:23 AM by Matt Koppenheffer
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    In an unusual move, Lehman Brothers decided to try and engender some employee goodwill by handing out a mid-year bonus. Unfortunately, it was in stock. Worse still, it was in Lehman stock.

    Now before you go and assume that this is a bad idea because Lehman stock has been so badly beaten up, let's be clear -- this is bad for a whole lot of reasons. And instead of getting hung up on minutiae like whether it's really an incentive when you're handing out shares of a plummeting stock, think about what this says about the bigger picture at Lehman.   Read More...

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  • Will Lehman crash and burn?

    Posted Jun 05 2008, 02:50 PM by Matt Koppenheffer
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    Are we going to get an encore showing of "The Amazing Disappearing Investment Bank?" Now that Bear Stearns is no more, the banking bears and short sellers have turned their attention to fellow investment bank Lehman Brothers.

    With the massive leverage ratios that the investment banks have propped themselves on, creditor confidence has become a prized asset -- maybe the prized asset. There was plenty that was going haywire over at Bear, but it ended up being a complete and rapid drying up   Read More...

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  • Another one bites the dust

    Posted Jan 10 2008, 01:18 AM by Matt Koppenheffer
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    The turbulence at the top on Wall Street continues. Bear Stearns will be sporting a new CEO now that Jimmy Cayne has announced that he is stepping down from the position. Cayne is now the third major Wall Street firm with a new chief, following the shake-ups at Merrill Lynch and Citigroup.

    It doesn't come as all that much of a surprise that Bear would make a change -- along with Merrill and Citi, the firm and its stock have been among the worst hit by the recent market turbulence. Unlike some of its other competitors, though, underperformance at Bear wasn't as localized to the debt markets, suggesting that there may be some bigger underlying problems   Read More...

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  • Signs of the storm

    Posted Dec 21 2007, 11:15 AM by Matt Koppenheffer
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    In turbulent times like these there are plenty of big signs that things are bad. Take the massive write-down that Morgan Stanley announced earlier this week. When a major financial institution, and a savvy player at that, takes a loss of that magnitude it's not hard to recognize that there's a storm raging.

    Sometimes, though, it's little things that can show the direction that things are headed. Wednesday's front page of The Wall Street Journal's Money and Investing section, for instance, sported an advertisement for Barclay's. In good times these adverts typically talk about a firm's success with M&A activity or conducting IPOs. This particular one was focused on Barclay's capabilities working with companies going into and coming out of bankruptcy. In the stories in that section, you could've also found some more obvious signs of the times like UBS' fight to back out [subscription required] of a $1.5 billion financing or Cerberus trying to wiggle out of a $4 billion acquisition.   Read More...
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  • As the Lehman turns

    Posted Dec 14 2007, 03:23 PM by Matt Koppenheffer
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    Lehman Brothers reported its fourth quarter and full year earnings yesterday. Interestingly, the earnings -- which were pretty darn good considering what's been going on -- didn't get or create nearly the hullabaloo that the massive, stomach churning losses at other Wall Street firms stirred up.

    Well allow me to take a moment: nice quarter fellas.

    The problem is -- nobody's interested right now in believing that a Wall Street firm is doing something right. It's not hard to blame them -- finance firms seem to be hitting a wall all at once and the result has been the evaporation of tens of billions of dollars of shareholder value.   Read More...
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  • Goldman: Superhero or ticking time bomb?

    Posted Oct 30 2007, 03:16 PM by Matt Koppenheffer
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    So after he oversaw $8 billion-plus in losses at Merrill Lynch and shopped a merger with Wachovia without consulting his own board, Stan O'Neal is officially out of the CEO spot. At least he'll have plenty of time to tweak his golf game now. Oh no, wipe away those tears -- ol' Stan, he won't be on the ramen noodle diet any time soon.

    While the troubles of other struggling firms like Bear Stearns, Citigroup, and Bank of America have faded into the background to some extent as Merrill's shenanigans have taken center stage, they're not gone. Even Merrill, which may elicit the reaction of "how much worse can it really get" might get a bit worse. Deutsche Bank analyst Mike Mayo, who's been really turning the screws on the management teams at the banks, suggests that new management might get even more conservative and write off as much as $4 billion more.   Read More...

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