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Friday, June 06, 2008

Lehman’s Investment Banking Prowess

The ways of Wall Street never cease to amaze me.

You might think that a company responsible for orchestrating one of the biggest M&A banking debacles in recent memory, the reputational damage would be quite severe. Think again. In justifying his upgrade of Lehman’s stock, Merrill Lynch analyst Guy Moszkowski cites Lehman’s “very strong global franchises” in various areas, including investment banking.

Investment banking?

Lehman has “bragging” rights for Wachovia’s failed 2006 acquisition of Golden West Financial, a major California thrift and mortgage lender. Analysts estimate that Wachovia could rack up more than $10 billion in losses on Golden West’s $122 billion mortgage portfolio. The botched acquisition is said to have cost Wachovia CEO Ken Thompson his job earlier this week.

Fortunately for Lehman, the brilliant investment banking minds behind M&A deals that go south aren't called to task. So kudos to Dealbreaker for taking note of Lehman’s additional contribution to Wachovia’s financial woes.

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