"That didn't last long," said Nils Pratley in The Guardian. Monday's stockmarket rally crumbled the next day as financial stocks came under pressure amid jitters over Lehman Brothers, Wall Street's fourth-largest investment bank. The stock tanked by 45% on Tuesday when talks with Korea Development Bank ended, which reinforced worries that Lehman will not be able to raise fresh capital to offset sharp declines in the value of its assets. It had notched up $8.2bn in writedowns and credit losses in the year to this week and its exposure to commercial and residential mortgage assets, as well as leveraged loans, is $55bn. Lehman has taken months to come up with a definite capital-raising plan and "that inaction has left Lehman at a nadir from which it will be very hard to rebuild confidence", said Peter Eavis in The Wall Street Journal.
Can Lehman restore confidence?
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