No wonder they’re now effectively saying “drop dead” to the likes of Lehman Brothers

Re: Koreans say assets at leh way too risky

22-Aug-08 12:16 am

The Financial Times has just reported that Chinese and Korean investors have flatly rejected pleas from Lehman Brothers for bail-out funds.

Lehman’s third-quarter losses will be a staggering $4 billion — 700% worse than prior estimates — according to Citigroup’s latest review.

Lehman is desperately seeking buyers to the last profitable asset it owns, Neuberger.

Lehman, which is 1.6 times larger than Bear Stearns was when it failed, may be too big to save. And even if it is saved by the government, its shares will probably be worth close to zero.

If you think the Bear Stearns failure was a disaster, better hold onto your hat ...

Lehman Brothers is 60% larger, and this time around it looks like there might not be a sugar daddy to buy out the besieged company. If that’s the case, its shares could soon be worth close to ZERO!

In June, Lehman, America’s fourth-largest investment bank, posted its first quarterly loss ever: A staggering $2.8 billion in just three months.

Now, just yesterday, Citigroup raised its third-quarter loss estimates for Lehman nearly 700% to a staggering $4 billion!

The clincher: According to this morning’s Financial Times, Lehman is fast becoming the pariah — the leper of the financial world. The super-rich Korea Development Bank and a leading brokerage firm in China both rebuffed Lehman’s pleas to buy up to 50% of its shares.

This year and last, wealthy foreign investors and sovereign wealth funds — in China, Singapore and Dubai — have repeatedly come to the rescue of U.S. banks and brokers in trouble, including giants like Merrill Lynch, Citigroup, and Lehman Brothers itself.

Each time, these giant foreign investors thought they were getting a bargain. And each time they forked over billions. But now look: Every one of those so-called “bargains” has turned to dust, delivering nothing but massive losses to the sovereign funds.

No wonder they’re now effectively saying “drop dead” to the likes of Lehman Brothers!
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