What Lehman Can't Seem To Learn

What Lehman Can't Seem To Learn

Lehman Brothers, Inc., released its second quarter earnings last week, reporting a loss of $2.8 billion ($4.1 billion before taxes). The losses were caused by writedowns and failed hedges on the same kind of toxic mortgage and leveraged-loan securities that have been wreaking havoc on bank earnings throughout the world.

Lehman is one the storied names on Wall Street, with a history that stretches back more than 150 years. After a rocky period in the 1980s and 1990s, it became one of the more sure-footed banks under its CEO, Richard Fuld. It was one of the few major players in mortgage markets not to sustain heavy losses in 2007 -- and it underscored its superiority by ostentatiously raising its dividend at year end.

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