Lehman Brothers

Wall Street's meltdown sent the stock market reeling and left Main Street with one sobering thought: It isn't over yet. The record bankruptcy filing of Lehman Brothers yesterday and fire sale of Merrill Lynch to Bank of America raised the specter of further blowouts threatening the stability of an already-battered financial system in the months ahead. Unlike a stock market crash that hits all at once, the "agonizing and deep-seated" drumbeat of trouble seems certain to drag on, said market veteran Phil Hummer of Chicago's Wayne Hummer Investments.

There is a seductive myth that the economic destruction of recent years had nothing to do with the limitless pay dangled like a 10,000-pound jelly doughnut before American CEOs. After all, the argument goes, the annihilation of Bear Stearns and Lehman Brothers hurt top bosses at those companies just as badly as it hurt shareholders and employees. More, if you count value of their stock and options that was wiped out. So how can anybody argue that pay packages made them take risks that killed the companies?

Wall Street responded to the forced bankruptcy of a 158-year-old investment leader and the self-initiated sale of a household name in the brokerage business with predictable pessimism - the Dow plunged big-time yesterday. But it's not as though the fates of Lehman Brothers and Merrill Lynch came as a surprise. Rather, their predicaments reinforced the latest fallout of the ongoing U.S. financial crisis: More institutions are likely to falter, and they can't all expect the federal government to come to their rescue.

Maybe we'll get financial reform this year after all. Obama administration officials are invading Capitol Hill to get Congress off its behind. Treasury Secretary Timothy F. Geithner met with House Majority Leader Steny H. Hoyer and other Democrats. Hoyer says he'll put a reform bill on the House floor next month. Senate Banking Committee Chairman Christopher J. Dodd is moving more slowly, but he told reporters last week that the committee could vote on a bill within a few weeks. It's important stuff.

Marking its third acquisition of the year, Legg Mason Inc. said yesterday it will buy Lehman Brothers Global Asset Management Ltd. in an all cash transaction.The Baltimore-based brokerage and investment advisory firm, which has $30 billion in assets under management, expects to acquire the London unit from Lehman Brothers Holdings Inc. next month after obtaining approvals from regulators in the United States and Britain.Terms were not disclosed, but Edward A. Taber III, Legg Mason's senior executive vice president in charge of investment management, said the transaction price is far less than the $35 million in stock Legg Mason paid for Cincinnati-based Bartlett & Co., announced Oct. 23.Lehman Brothers Global has about $3 billion in assets under management.

The collapses of Fannie Mae, Freddie Mac and Lehman Brothers furnish another opportunity to teach an investment lesson that still hasn't been learned and, for many people, never will be. Diversify. Diversify. Diversify. And don't put your 401(k) money in stock of the company you work for. At mortgage giant Freddie Mac, about 8 percent of the money employees held in their 401(k) retirement plans was invested in Freddie stock at the end of 2006, Dow Jones Newswires reported this week. Since then, the shares have fallen from $34 to 45 cents.

NEW YORK - Lehman Brothers Holdings Inc. has raised $1.6 billion for a fund to buy real estate in the United States and Europe, tapping investor appetite for the stable income from properties after the stock market's lengthy decline. The fourth-largest U.S. securities firm started raising money for the fund in May 2000 and attracted $600 million more than originally planned. The fund, called Lehman Brothers Real Estate Partners, is to be managed by Raymond Mikulich and Mark Walsh, both managing directors.

Susan Wohlfort and Mark Kendall were married on July 30, 2005. The Reverend Mark Stanley of Old St. Paul's Church officiated, and the reception was held at Harbor Court Hotel in Baltimore, MD. The bride is the daughter of Henry and Avis Wohlfort, of Timonium, MD. Mrs. Kendall graduated from Duke University and The University of Chicago Graduate School of Business. She is currently a Senior Vice President in the investment banking division of Lehman Brothers. The groom is the son of Jerry and Elizabeth Kendall, of Whitehall, MI. Mr. Kendall graduated from Western Michigan University and is Vice President, Corporate Tax Planning at The Bank of New York.

WASHINGTON -- Baltimore Gas & Electric Co. filed with the Securities and Exchange Commission Friday to sell up to $200 million in debt securities.The company plans to sell medium-term notes that mature in nine months to 30 years, the SEC filing said.The company will use the proceeds from the offering for general corporate purposes, including the repayment of commercial paper, financing of construction, capital expenditures and for operations, the S-3 shelf registration statement said. A shelf registration allows a company to register securities and sell them from time to time when financing needs arise.

NEW YORK -- Marriott International Inc. said it filed with the Securities and Exchange Commission to sell $150 million of 10-year bonds.The SEC filing follows a month after Marriott International was created by Marriott Corp.'s split in two. The bond sale would be the first since the reorganization proposal in 1992, which enraged bondholders who saw their investments' value plunge as much as 30 percent.Marriott's split resulted in Marriott International, a profitable hotel management company; and Host Marriott Corp.

I get press releases about new books all the time. This one arrived the other day: "A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers ... a fly-on-the-wall, insider look at the mad house that Lehman became. It will reveal never-before-told stories about the dark characters who ruled Lehman, refusing to heed warnings that the company was headed for an iceberg." The author is Lawrence G. McDonald, until its collapse "one of Lehman's most consistently profitable traders" and an "eyewitness" to the brewing mess inside the investment bank.

WASHINGTON - The chief executive of Lehman Brothers Holding Inc., whose bankruptcy filing last month drastically escalated the Wall Street financial crisis, faced angry lawmakers yesterday and defended his leadership and the millions of dollars he and other executives made as the company's troubles mounted. Although taking what he called "full responsibility" for the actions that led to the nation's largest bankruptcy ever, Richard S. Fuld Jr. told the House Oversight and Government Reform Committee that his company was overwhelmed by a "financial tsunami" caused by a series of "destabilizing factors," including lack of investor confidence, short-selling, credit downgrades and rumors.

Fannie Mae and Freddie Mac, AIG, Lehman Brothers - and now, closer to home, Constellation Energy. Once again, Baltimore slumps into a chair and sings the blues: "Only one Fortune 500 company left in town." "We're a branch office community." "All that money went north, south and west." It's easy to see why Chicken Little might be a better candidate for local mascot than the Ravens' Edgar, Allan and Poe. But fear not. Baltimore and many other midsize cities now get all of their economic growth from small business and new ventures.

A few weeks ago, when our government nationalized Fannie Mae, which Forbes magazine last year ranked as the 57th-largest firm in the world, and Freddie Mac (No. 104), one lesson allegedly learned was that it was bad policy to allow companies to become "too big to fail," requiring the government to step in to curtail the damage. Analysts then said reforms should include changes that would preclude allowing firms to become big and powerful. That was then. This week, there were sighs of relief - if not cheers - when Bank of America (No. 2)

Reflecting how the financial sector's meltdown has reverberated beyond Wall Street, investors wiped out about 70 percent of the value of Constellation Energy Group's stock at one point yesterday, despite little information about how or whether the Baltimore energy company's trading operations are affected by the demise of Lehman Brothers and other firms. Constellation shares lost nearly 36 percent, or $17.23, to close yesterday at $30.76 on the New York Stock Exchange.

Wall Street responded to the forced bankruptcy of a 158-year-old investment leader and the self-initiated sale of a household name in the brokerage business with predictable pessimism - the Dow plunged big-time yesterday. But it's not as though the fates of Lehman Brothers and Merrill Lynch came as a surprise. Rather, their predicaments reinforced the latest fallout of the ongoing U.S. financial crisis: More institutions are likely to falter, and they can't all expect the federal government to come to their rescue.

Constellation Energy Group worked to reassure Wall Street yesterday that its wholesale energy and credit relationships with Lehman Brothers will not have a "material adverse effect" on the Baltimore company, which saw its shares lose 18 percent amid a broader market sell-off. Constellation's stock closed down $10.38 to $47.99 on the New York Stock Exchange. Even though Constellation conducts energy deals with Lehman, the New York investment banking company that entered bankruptcy proceedings yesterday does not owe it a substantial amount of money, according to a document filed with the Securities and Exchange Commission after financial markets closed yesterday.

NEW YORK -- After years of investigating Prudential Securities' improper sales of limited partnerships, government regulators are turning their attention to the rest of Wall Street.The Securities and Exchange Commission's inquiry focuses on partnership sales by several of the country's biggest brokerage firms, including the PaineWebber Group, Merrill Lynch & Co., Dean Witter & Co. and Lehman Brothers, people with knowledge of the probes said yesterday.The investigation, which is being handled out of several SEC offices, is examining whether the brokerage firms misled investors about the safety and potential returns from a series of limited partnerships.

Constellation Energy Group worked to reassure Wall Street yesterday that its wholesale energy and credit relationships with Lehman Brothers will not have a "material adverse effect" on the Baltimore company, which saw its shares lose 18 percent amid a broader market sell-off. Constellation's stock closed down $10.38 to $47.99 on the New York Stock Exchange. Even though Constellation conducts energy deals with Lehman, the New York investment banking company that entered bankruptcy proceedings yesterday does not owe it a substantial amount of money, according to a document filed with the Securities and Exchange Commission after financial markets closed yesterday.

Wall Street's meltdown sent the stock market reeling and left Main Street with one sobering thought: It isn't over yet. The record bankruptcy filing of Lehman Brothers yesterday and fire sale of Merrill Lynch to Bank of America raised the specter of further blowouts threatening the stability of an already-battered financial system in the months ahead. Unlike a stock market crash that hits all at once, the "agonizing and deep-seated" drumbeat of trouble seems certain to drag on, said market veteran Phil Hummer of Chicago's Wayne Hummer Investments.