Lehman’s Layman Loans

More toxic loans from the banks.  On and on it goes with no end in sight.  Conversely, what one can see is that whenever and however it ends is definitely not dollar positive.

Lehman May Report $4 Billion Writedown, JPMorgan Says

Aug. 19 (Bloomberg) — Lehman Brothers Holdings Inc. may write down about $4 billion in credit-related investments and other assets when it reports fiscal third-quarter earnings, JPMorgan Chase & Co. analysts said.

“The credit environment continues to be difficult,” New York-based analysts led by Kenneth Worthington wrote in a report yesterday. “It will be another difficult quarter for Lehman.”

Lehman may mark down some of its $61 billion of mortgage and other asset-backed securities after benchmark residential and commercial mortgage-related indexes declined by as much as 20 percent, the analysts wrote. The company may have already been selling some commercial mortgage assets, they added.

Lehman, the largest underwriter of mortgage bonds before the subprime market collapsed, has slumped 77 percent in New York trading as it struggles to pare its debt holdings. The bank has reported writedowns and credit losses of $8.2 billion in the past 12 months, according to data compiled by Bloomberg.

The analysts cut their per-share estimate for the third quarter to a loss of $3.30 from a 35-cent profit. They expect Lehman to report a loss of $6.77 a share for the full year, compared with their earlier forecast of a $2.35 loss. They maintained a “neutral” recommendation on the stock.  More…