By Chan Akya
The travails at one of the smaller investment banks in the world, Lehman Brothers, this week helped to increase investor focus on the phalanx of lies that underpin valuations across financial markets. Since I last alluded to the potential problems of this firm (Cheap talk, pricey banks, Asia Times Online, June 5, 2008), events have moved rather quickly; its share price is down from around US$31 to Thursday's close of $22.70.
The reason for the share price decline wasn't so much the article of course, but rather the company's announcement on Monday (June 9) that it expected a $2.8 billion loss for the quarter ended May 31, and that it would also raise $6 billion in new capital, a part of which would come from Asian investors, in particular an unnamed South Korean financial institution.
Monday, June 16, 2008
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