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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (67936)	8/22/2007 3:34:11 PM
From: Bucky Katt	Read Replies (2) of 116555

Lehman Shuts Subprime Unit; 1200 Jobs Cut at 23 offices. (do these cuts ever show up in the unemployment index?) Lehman Brothers Holdings Inc. is closing its "subprime" mortgage business because of the tumult in the home lending industry, the bank said Wednesday. The Wall Street brokerage said it is shuttering its BNC Mortgage LLC subsidiary, which issues home loans to people who cannot document their income or have shaky credit histories. Closing this business will cost $25 million in severance pay and real estate and technology costs. Lehman Brothers will also record a $27 million accounting charge for writing down goodwill, or the value of the Irvine, Calif.-based business that Lehman carried on its books above the worth of the physical assets. Lehman Brothers will continue to issue home loans through its Aurora Loan Services LLC unit. Mortgage lenders around the nation, especially subprime lenders, have been closing down in the past month as deteriorating credit quality has drained the cash available to the industry. Shares of Lehman Brothers rose 50 cents. Natch...

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