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Non-Tech : LEH LEHMAN BROTHERS -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (295)	9/12/2007 2:26:33 AM
From: Tom Caruthers	Read Replies (1) \| Respond to of 315

The fundamentals of LEH and other I-banks has changed dramatically since I sold last year. M&A revenues, which drove record profits, are going to be hit badly due to the fallout of the subprime mortgage debacle and the fact that no one wants to buy debt anymore. I think the share price has factored a bad case scenario, but don't know if it has reflected a worst case scenario. That being said, the share price has dropped low enough to reflect a 30-40% hit in earnings, so I think they have been de-risked some. Also, the chance of an interest rate cut should help. But overall, I think we are too early in the process to say that the brokerages have seen the worst. Based on the chart, I think LEH could still fall to $47.5 near term, and then ultimately down to $42.5. I won't touch these brokerages until I see a fire sale. JMO, Tom