SocraticGadfly: Subprime fallout hits Lehman Brothers

June 09, 2008

Subprime fallout hits Lehman Brothers

The nation’s fourth-largest investment bank had its first quarterly loss since being spun off in 1994. Why?
Revenue during the quarter suffered from “negative mark to market adjustments and principal trading losses.”

In other words, it had a bunch of mortgage crap on its books, not priced to reality.

Speaking of that, in what is certainly ironic, Moody’s, which contributed to all these problems in the first place, lowered its rating of Lehman’s to negative.

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