Lehman Bros Hldgs (LEH-P) and Lehman Brothers Holdings Inc. (LEH)

Posted August 19, 2008

Lehman Bros Hldgs (NYSE:LEH-P) and Lehman Brothers Holdings Inc. (NYSE:LEH) drop on hints that another big U.S. bank is on its way out

by J. Christoph Amberger

Baltimore — (TFN): Owning shares in Lehman Bros Hldgs (NYSE:LEH-P) and Lehman Brothers Holdings Inc. (NYSE:LEH) was almost as exciting as owning gold over the past two days. The preferred shares crashed $50-some dollars over yesterday’s closed, the regular shares only 8%.

An interview with TimesOnline may be to blame: “The deepening toll from the global financial crisis could trigger the failure of a large US bank within months, a respected former chief economist of the International Monetary Fund claimed today, fuelling another battering for banking shares.

“Professor Kenneth Rogoff, a leading academic economist, said there was yet worse news to come from the worldwide credit crunch and financial turmoil, particularly in the United States, and that a high-profile casualty among American banks was highly likely. (…) In an ominous warning, he added: ‘We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one — one of the big investment banks or big banks,’ he said.”

If this provided enough of a clue for investors to stampede out of Lehman shares is one thing. The question where to park the money you just saved quite another. Shanghai, real estate, gold and oil seem to be just as stable as over-leveraged U.S. banks.

Let us know what sector you’re going into right now… just use the “Comments” field below!

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