Merill Lynch's O'Neal takes the Hit

[Quang]

Merrill Lynch's O'Neal Takes the Hit

The financial giant's CEO took full responsibility for the 94% revenue loss last quarter. Heavy exposure to subprime mortgages was a big problem
by Steve Rosenbush

Merrill Lynch (MER) has sailed directly into the eye of a major financial storm, and the worst may still be ahead for the company and its chief executive Stanley O'Neal.

On Wednesday, Merrill took a writedown of $7.9 billion for the third quarter, by far the largest in its history, to cover losses related to subprime mortgages and risky corporate loans. It was substantially bigger than the $5 billion writedown that the company had warned investors to expect earlier this month. Overall for the quarter, Merrill said it lost $2.3 billion, or $2.85 a share—compared with a profit of $3.05 billion—or $3.17 a share, during the third quarter of 2006. After factoring in the losses, revenues for the quarter fell an astonishing 94% to $577 million.

The company's stock price fell 6%, to $63.34 in midday trading Wednesday. The shares are down about 30% from a 52-week high of $98 established in early January. Merrill's stock price has fallen farther than that of any major investment bank or brokerage. Citigroup (C) has taken major writedowns as well (BusinessWeek, 10/15/07).

The rest here:
http://www.businessweek.com/bwdaily/dnflash/content/oct2007/db20071024_830456.htm

[Quang]

Bạn nào thạo finance giải thích hộ tớ cái writedown này là thế nào nhỉ?

[Ngan]

Bạn nào thạo finance giải thích hộ tớ cái writedown này là thế nào nhỉ?

Nói chung chung thì writedown có nghĩa là ghi nhận loss vì fair market value xuống thấp hơn book value, và sự mất giá này là "other than temporary", nôm na là bác không còn hy vọng giá trị tài sản quay về mức cũ nữa. Cụ thể về writedown liên quan đến subprime mortgage thì do ML đầu tư vào một số classes of notes trong một rổ mortgage-backed securities. Value of the investment is the result of 1) future (expected) casflow and 2) discount rate.

- Impact on future cashflow: Khi các secuirities này được phát hành, most typically there is a senior-suboridinate structure, where the most subordinated classes should absorb all the loss before the more senior ones are affected. When constructing a deal, the rating agencies, the issuer and the underwriter forecast how much loss would be likely to incur on the mortgage loans supporting those notes, and therefore how big the size of the subordinate/supporting classes should be (relative to the size of the senior class) in order to provide the desired level of credit protection to the senior classes. The rating agencies assign ratings to the notes based on the certainty of the future payment. Then people (e.g. ML) buy different classes based on the ratings (among other things). After a while now it turns out that the loss is much bigger than previuosly anticipated. (You probably notice that rating agencies do a lot of downgrading nowadays). The subordinated notes are eaten up faster by the loss. The senior notes have less protection. (Intuitively, when you don't collect enough money from the underlying mortgage loans, how can you manage to pay the notes?) In other words, the investors now reliaze that the cashflow that their investments are expected to yield in the future would be lower than originally projected.

- Discount rate thì trong tình cảnh loss tràn lan thế này, dĩ nhiên risk premium phải cao hơn. Tôi nhìn thấy chỉ từ năm trước đến năm nay, cùng một loại asset mà người ta tăng discount rate từ 20-25% lên tới 35-50%. How much the value will shrink with such a surge in discount rate?

Speculator like ML buys the riskier classes, in search for high yield. Impact of subprime loss on the bottom classes are more severe than on the senior classes. They can't even find the buyers in these days.



(Thấy em PA toát mồ hôi nên phải edit tý chút cho rõ nghĩa)

[1u29]

Chị Ngân cho 1 bài em đọc toát mồ hôi hột, nhìn chữ writedown thấy quen thế. À, vỗ trán đánh đốp, ngày xưa nhìn thấy nó ở accounting, he he.

[lynch]

các bác nào không hiểu có thể vào http://vnexpress.net/Vietnam/Kinh-doanh/Quoc-te/2007/10/3B9FB00A/ :D

[Quang]

Bác nào không hiểu vào cái link này đọc thì chắc chắn sẽ hiểu sai. Lần sau bạn Tùng đưa nguồn tham khảo thì cũng chú ý tí nhé.

các bác nào không hiểu có thể vào http://vnexpress.net/Vietnam/Kinh-doanh/Quoc-te/2007/10/3B9FB00A/ :D

[lynch]

Cảm ơn bác Quang nhiều. Lần sau em sẽ chú ý hơn

[1u29]

Thêm 1 bác nữa ra đi. Nhìn cổ phiếu của Citigroup mà giật mình. Không phải cứ mua của anh to là chắc ăn nhé. Cả Citigroup cả Merrill Lynch phen này làm cho bà con khóc thét. Khéo sắp tới lại có 1 loạt layoff.
Em đang đọc lại bài chị Ngân bảo sao dễ hiểu thế nhở. Hóa ra bà chị vào edit lại.

Citigroup CEO Resigns; Interim Named
Sunday November 4, 9:03 pm ET
By Madlen Read, AP Business Writer
Citigroup Chairman and CEO Prince Resigns, Replaced As Chairman by Former Treasury Secy Rubin

NEW YORK (AP) -- Citigroup Inc. Chairman and Chief Executive Charles Prince, beset by the company's billions of dollars in losses from investing in bad debt, resigned Sunday and is being replaced as chairman by former Treasury Secretary Robert E. Rubin.

The nation's largest banking company announced Prince's widely expected departure in a statement following an emergency meeting of its board. Citi also said Sir Win Bischoff, chairman of Citi Europe and a Member of the Citi management and operating committees, would serve as interim CEO. Rubin, a former co-chairman of Goldman, Sachs & Co., has served as the chair of Citi's executive committee, and it was also expected he would take a greater role in leading the company.

In a separate statement, Citi, which took a hit of $6.5 billion from asset writedowns and other credit-related losses in the third quarter, said it would take an additional $8 billion to $11 billion in writedowns.

"It was the honorable course, given the losses we are now announcing," Rubin said of Prince's resignation in an interview with The Associated Press.

Prince joined former Merrill Lynch & Co. CEO Stan O'Neal, who resigned from the investment bank last month, as the highest-profile casualties of the debt crisis that has cost billions at other financial institutions as well.

Prince, 57, became chief executive of Citigroup in October 2003. Many shareholders criticized him openly for much of his tenure, as Citigroup's stock lagged its peers while Prince executed what was called an umbrella model of corporate organization, with several separate lines of business. Shares closed Friday at $37.73, about 20 percent below where they were when Prince became CEO.

Prince's position looked especially shaky after the company on Oct. 1 estimated that third-quarter profit would decline about 60 percent to some $2.2 billion after seeing nearly $6 billion in credit costs and write-downs of overly leveraged corporate debt and souring home mortgages. At that time, Prince said the bank's earnings would return to normal in the fourth quarter.

But when Citigroup released its third-quarter results two weeks later, the write-downs and credit costs exceeded $6 billion, and Chief Financial Officer Gary Crittenden indicated the outlook going forward wasn't as upbeat as Prince had predicted.

Citigroup wasn't alone in its third-quarter turmoil. When borrowers with poor credit stopped paying their mortgages, many banks not only had to take losses on those subprime mortgages, they also saw instruments in their portfolios backed by mortgages plummet in value.

But Citigroup's stumbles were particularly grievous, given the bank's size, history and CEO, who had been telling shareholders for years to give his strategy a chance. Even in October, Prince said in a call to analysts: "I think any fair-minded person would say that strategic plan is working."

Fixing Citigroup will take more than just cleaning up bad debt. The umbrella model that Sanford I. Weill created and Prince touted looked like a giant mess compared to its conglomerate counterpart JPMorgan Chase & Co. -- now led by Weill's former protege, Jamie Dimon. JPMorgan's writedowns were smaller, and strength in asset management, security services, card services and commercial banking units made up for weakness in other areas. Having cut costs and built up cash reserves in previous quarters, the bank was better prepared for a tough lending climate.

Meanwhile, Citigroup's expenses outweighed revenues, it botched its fixed income trading operations, and its cash-to-debt ratio dipped.

The anger toward Prince was so intense that during a conference call last month, Deutsche Bank analyst Mike Mayo told Prince that investors wanted a significant change in management. His supporters, though, argue that he was dealt a tough hand when his predecessor Weill gave him the reins, and that matching the hefty profit gains Citigroup saw in the 1990s would be difficult for any CEO.

Weill was a fairly popular leader, building Citigroup through various mergers and acquisitions over the course of about 20 years into the huge conglomerate that it is today. When he stepped down as chairman in 2006 and handed the position to Prince, Weill -- now a board member -- got two standing ovations from shareholders and a big blue banner from employees that read, "Thank you, Sandy!"

Prince, whose compensation came to nearly $25 million last year, is leaving under a much darker cloud.

Citigroup, along with JPMorgan Chase & Co. and Bank of America Corp., is trying to create a fund to buy up distressed securities in the tight credit markets, a move some industry experts say smacks of desperation. Citigroup is the only major U.S. bank to manage "structured investment vehicles," or SIVs, and may end up having to take losses on them because demand for the assets that fund them has dropped.

Rubin, 69, after 26 years at Goldman Sachs, became President Bill Clinton's chief economic adviser in 1993 before leading the Treasury Department. His experience steering the U.S. economy during the Mexican and Asian financial crises could come in handy as Citigroup attempts to navigate the tight credit markets.

Bischoff, 66, was the chairman of the British investment bank Schroders PLC, then joined Salomon Smith Barney Inc., a subsidiary of Citi, when it acquired Schroders. He began his current position in May 2000.

"There's no change of strategy that we see, actually, going forward," Bischoff said, noting that the company still plans to focus on international expansion, at least until a new CEO is chosen.

It was not known whether Bischoff was in the running to replace Prince as CEO. Before Sunday's meeting, many ideas for Prince's replacement were floated by industry watchers; one name that has come up often is John Thain, who was once president of Goldman Sachs and is now CEO of NYSE Euronext.

In 2004, Citigroup had to close its Japan Private Bank amid allegations of improper activities. And in January, former head of global wealth management Todd Thomson resigned, reportedly having been forced out for extravagant spending and dealings with CNBC anchor Maria Bartiromo.

Citigroup did a minor reshuffing in early October, combining its investment banking and alternative investments businesses into one unit led by Vikram Pandit, who had led Citigroup's alternative investments unit. Tom Maheras, co-CEO of the investment banking unit, left.

At the time, Rubin and Saudi Arabian Prince Alwaleed bin Talal -- Citigroup's biggest individual shareholder and once a critic of Prince -- expressed their support for the bank's embattled CEO.

Nguồn: Yahoo Finance: http://biz.yahoo.com/ap/071104/citigroup_ceo.html

[Longatum]

Cái further write down này thấy bảo là đã được dự đoán trước rồi, có điều là 8-11bn thì kinh quá =) chỉ thương cho mấy đứa em quen mới vào analyst class của Citi năm nay... chắc là bonus potential goes down the toilet rồi :-(

Mấy chú ầm ĩ ban đầu là chú Bear với chú Goldman thì lại vẫn ôkê... chú Lehman đáng lý phải là thằng óanh CDO kinh nhất thì lại cũng không bị tệ hại lắm... sau vụ này chắc là risk management lên ngôi, dân middle office được mùa :D

[1u29]

Đây các bác không phải thắc mắc xem ai sẽ là CEO của Merrill Lynch nữa nhé.
Có ai theo market tuần vừa rồi không. Đau cả tim. Thị trường trồi sụt chóng cả mặt. Sau khi có tin là Etrade sắp bị các bank run thì cổ phiếu của etrade xuống 60% vào hôm thứ 2, lên 40% hôm qua và hôm nay đang lên tiếp 20%. 1 vài cổ phiếu khác trên thị trường cũng đang trồi sụt với tốc độ 10% mỗi ngày.
Sau Citigroup, Wachovia cũng sắp sửa thông báo khoản loss


Reuters
NYSE's Thain to be Merrill CEO: report
Wednesday November 14, 1:05 pm ET


NEW YORK (Reuters) - Merrill Lynch & Co Inc (NYSE:MER - News) is expected to announce that NYSE Euronext (NYSE:NYX - News) Chief Executive John Thain will be its next chief executive, The New York Post reported on its Web site on Wednesday.

An NYSE Euronext board meeting is scheduled for 2 pm EST and an announcement could come after the close of the market, the Post said, citing sources.

NYSE Euronext Chief Operating Officer Duncan Niederauer is expected to assume that company's CEO post, the Post reported.

An NYSE Euronext spokesman was not available for comment, and a Merrill spokeswoman declined comment.

Thain, who joined the Big Board in 2004, is credited with transforming it into a public company and increasing the use of automated trading. He also navigated it through two mergers with Archipelago Holdings and Euronext NV.

Niederauer joined the exchange from Goldman Sachs (NYSE:GS - News) in April.

(Reporting by Anupreeta Das and Tim McLaughlin; Editing by Brian Moss)

Nguồn: Yahoo Finance http://biz.yahoo.com/rb/071114/merrill_ceo.html

[1u29]

Cơn khủng hoảng tài chính của nước Mỹ vẫn chưa dừng lại. It's one thing for Countrywide to drop, it's another thing for Feddie and Fannie to drop. Em vẫn đang chờ nhà ở Cali xuống, he he. Theo lịch sử thì chưa bao giờ có đâu đấy.

AP
Freddie Mac Loses $2B, Seeks New Capital
Tuesday November 20, 12:23 pm ET
By Marcy Gordon, AP Business Writer
Freddie Mac Sets Aside $1.2 Billion in 3Q for Bad Home Loans; Seeking New Sources of Capital


WASHINGTON (AP) -- Freddie Mac, the nation's No. 2 buyer and guarantor of home loans, lost $2 billion in the third quarter and said Tuesday it must raise fresh capital to meet regulatory requirements. Its shares fell nearly 30 percent.

The quarterly loss was the largest ever for Freddie Mac which, like its larger government-sponsored competitor Fannie Mae and a number of large investment banks, has been slammed in recent months by rising defaults on home mortgages.

The mortgage financier said it is "seriously considering" cutting in half its dividend in the fourth quarter and has hired Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. as financial advisers to help it examine possible new ways of raising capital in the near future.

Freddie Mac set aside $1.2 billion in the turbulent July-September period to account for bad home loans, which it said reflected "the significant deterioration of mortgage credit."

Freddie Mac, like Fannie Mae, has traditionally funded the mortgage market when other banks pull back because of risk, in keeping with its charter.

Industry experts say a reduced role by either may ripple across the entire housing market.

Fannie Mae and Freddie Mac "have provided essential liquidity in a time of crisis," Fox-Pitt, Kelton analyst Howard Shapiro said in a research note. "Now that that liquidity function has essentially been withdrawn, it will mean, in our opinion, a further exacerbation of the housing downturn -- even less credit available and steeper downturns in home prices."

Executives said Tuesday there was little to be optimistic about in the upcoming fourth quarter and told investors to brace for more of the same, sending shares on the greatest one-day plunge since public trading began for Freddie nearly two decades ago.

"This is a very, very difficult time. This is not happy news," Freddie Mac's chairman and CEO, Richard Syron, said in a conference call with Wall Street analysts. "We will work through this."

If dividend cuts and other actions aren't sufficient to help the company reach its government-mandated level of capital held in reserve as a cushion against risk, Freddie Mac said it may consider other measures such as limiting its growth, reducing the size of its mortgage investment holdings or issuing new stock.

Freddie Mac's losses widened from $715 million during the same period last year and its shares tumbled $11.07 to $26.43 in midday trading.

The company posted negative revenue of $678 million, as it sustained losses under generally accepted accounting principles of $3.6 billion in the quarter. The revenue compared with positive revenue of $91 million a year earlier.

The $2 billion third-quarter loss for McLean, Va.-based Freddie Mac worked out to $3.29 a share, compared with $1.17 a share in the third quarter of 2006.

Losses far exceeded Wall Street analysts expectations of a 22 cent per-share loss, according to a poll by Thomson Financial.

The results for Freddie Mac, together with a recent report by Fannie Mae, heighten investor anxiety over the government-sponsored companies, which had been considered less vulnerable in the housing crisis because they have had less exposure to high-risk, subprime mortgages.

Freddie Mac's regulatory core capital was estimated to be just $600 million in excess of the 30 percent mandatory target capital surplus directed by the Office of Federal Housing Enterprise Oversight.

So far this year, Freddie Mac has recognized $4.6 billion in pretax credit related items.

Buddy Piszel, chief financial officer, said Freddie Mac is moving to stem losses.

"We have begun raising prices, tightened our credit standards and enhanced our risk management practices," Piszel said. "We also continue to improve our internal controls."

"We were getting thin" in terms of excess capital, and Freddie Mac decided it needed to bolster its capital "to manage through this credit cycle," Piszel said in a telephone interview. That cycle isn't expected to improve until 2009, he said, with home prices projected to register a 5 percent to 6 percent decline nationwide.

Freddie Mac: http://www.freddiemac.com

Fannie Mae: http://www.fanniemae.com

Nguồn: Yahoo Finance http://biz.yahoo.com/ap/071120/earns_freddie_mac.html

[1u29]

Chẹp, không ai theo dõi tiếp mấy cái này nữa à. Tiếp tục vài đồng chí nữa ra đi. Dân đen thì chờ layoff, còn executives thế này thì không biết họ đi đâu nhỉ? Nhà vẫn tiếp tục xuống ở nhiều thành phố. Thị trường hôm nay tương đối flat chờ đợi xem Fed có động tĩnh gì về cắt lãi suất không.
May mình không ôm cổ phiếu mấy đồng chí tài chính. Năm ngoái thấy khởi sắc lắm đấy, tươi hơn hớn. Năm nay các đồng chí to rủ nhau cứ sụt độ 30% là nhẹ.

Morgan Stanley: Cruz Out As Co-President
Thursday November 29, 6:58 pm ET
By Joe Bel Bruno, AP Business Writer
Morgan Stanley Co-President Zoe Cruz Will Leave As Investment Bank Changes Top Leadership

NEW YORK (AP) -- One of the most powerful women in the financial world became the latest victim of the management purge on Wall Street.
Morgan Stanley said that Zoe Cruz, a 25-year veteran at the firm, was ousted as co-president Thursday in a sweeping management shake-up aimed at turning around the investment bank amid turmoil in the credit markets.

Cruz joins a growing list of Wall Street's top names who have been fired since the summer, including Merrill Lynch & Co.'s Stan O'Neal and Citigroup Inc.'s Charles Prince, for presiding over their firms as they became mired in the subprime mortgage tar-pit.

"The captains are going down with the ship, whether they are rising stars or not doesn't matter," said David Easthope, a senior analyst at business consulting group Celent. "The losses are so large and embarrassing to the organization that they are getting rid of people to satisfy the public perception that they are fixing things."

Investment banks have been forced to write down some $80 billion of losses in the past few quarters amid a growing credit crisis triggered by a spike in defaults of mortgages to people with weak credit ratings. Morgan Stanley's share of that is a $3.7 billion write-down it will take in the fourth quarter.

CEO John Mack also moved co-President Robert Scully, who was named to the job along with Cruz in 2006, to the newly created Office of the Chairman. Cruz -- who was nicknamed "Cruz Missile" within the firm for her hard-charging demeanor -- is a rare holdover from the management team of former CEO Phil Purcell, who was ousted in 2005 and counted her as a top lieutenant.

Scully and Cruz will be replaced by Walid A. Chammah and James P. Gorman. Chammah, 53, was named global head of investment banking in July, while Gorman, 49, runs the global wealth management group.

Mack also got rid of the heads of the departments that caused the massive write-down. The heads of both the credit group and securities products groups were both pushed aside, a move that has been seen by other major Wall Street banks during the past several months.

They join some fairly high-profile executives who have been shown the door by corporate boards unsettled by losses during the past few quarters. Bad bets on mortgage-backed securities has caused those investments to plummet in value, and created an overall aversion to risk by investors.

O'Neal was the first CEO to go earlier this month, and Citi's Prince followed just a week later. The investment banks are hoping a change in leadership will help reassure investors who have watched stock prices plunge this year.

Also Thursday, online brokerage E-Trade Financial Corp. said CEO Mitch Caplan would step down from his position. There continues to be speculation that Bear Stearns Cos. head James Cayne will be forced to retire early.

Cayne earlier this year forced President Warren Spector to leave after two hedge funds it controlled collapsed from links to subprime mortgages. Borrowers with risky credit have been defaulting on home loans at an alarming rate, and that's caused other securities to fall as well.

Mack said the new leadership team was put in place to help navigate Morgan Stanley through the unfolding credit crisis.

"We see significant opportunities to build on the market leadership positions we have across our global franchise and to take advantage of the strong foundation we've put in place in recent years," he said in a statement. "Today's markets, however, are changing rapidly, and we're putting in place a leadership team that is ideally suited to help Morgan Stanley realize the opportunities ahead, while continuing to navigate the current challenging condition."

A Morgan Stanley spokesman declined to comment beyond the company's statement.

The company is expected to report fourth-quarter earnings in mid-December. Analysts predict it will report a profit of 2 cents per share on $5.6 billion of revenue.

Shares of the company are down about 23 percent so far this year, as investors have sold off Wall Street institutions that have been slammed by credit problems. Shares closed down $1.16, or 2.2 percent, to $52.34 on Thursday.

Source: Yahoo Finance http://biz.yahoo.com/ap/071129/morgan_stanley_cruz.html

[Trang]

Em vẫn theo dõi hàng ngày, dạo này commodities cứ chạy theo equity market, equity hắt hơi sổ mũi là hàng hóa chao đảo. Hôm qua mở cửa thấy stock down em mừng húm, cuối phiên lại hất lên do kỳ vọng Fed cắt giảm lãi suất tăng còn gì chị. Hi vọng market tăng 3 phiên liên tiếp rồi, hôm nay sẽ điều chỉnh. Có vẻ như từ giờ đến 11th Dec em sẽ bị thấp thỏm đây :(

[1u29]

AP
Morgan Stanley Cuts 1,000 Mortgage Jobs
Wednesday February 13, 2:02 pm ET
By Joe Bel Bruno, AP Business Writer
Morgan Stanley to Scale Back Mortgage Business, Cut 1,000 Jobs As Housing Crisis Persists

NEW YORK (AP) -- Morgan Stanley on Wednesday said it will cut 1,000 jobs as the nation's second-largest investment bank trims its residential mortgage operations amid the continued deterioration of the mortgage markets.

The New York-based company said it will shutter its U.K. business that issues home loans and significantly scale back its mortgage business in the United States. Morgan Stanley joins hundreds of lenders in scaling back operations as the worst U.S. housing market in 26 years slows economic growth.

"Given the continued dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward," said Anthony Meola, chief operating officer of the U.S. residential business, in a statement.

Morgan Stanley said it will continue to service loans in the U.S. through its Saxon Mortgage Services units. It will also offer residential mortgages to brokerage clients through Morgan Stanley Credit Corp.

It couldn't immediately be determined how many people are employed in Morgan Stanley's residential mortgage business.

Banks and brokers have eliminated more than 25,000 jobs in the past six months as they racked up $150 billion of write-downs and credit losses tied to mortgage securities. Morgan Stanley last month announced it was cutting 1,000 jobs in operations, technology and other areas because of the market downturn.

A spokesman for Morgan Stanley was unable to provide a breakdown on how many jobs would be lost in the U.S. and U.K. The company had about 48,000 employees overall as of November.

In December, Morgan Stanley took a $9.4 billion write-down because of losses on mortgage-related securities -- and quickly raised $5 billion from Chinese investors to rebuild its capital base. Zoe Cruz, the company's co-president who was considered to be an heir to Chief Executive John Mack, was forced out of her job.

Wall Street investment banks spent the past few years beefing up their residential mortgage businesses to take advantage of the once-booming market. However, increasing defaults among subprime borrowers caused mortgage-backed securities to plummet since the summer.

This has caused job cuts among the big Wall Street firms scrambling to scale back their mortgage operations. Lehman Brothers Holdings Inc. and Credit Suisse Group have announced since late January they are eliminating about 1,600 jobs.

Morgan Stanley shares edged up 20 cents at $42.91 in afternoon trading.

AP Business Writer Jeremy Herron contributed to this report from New York.

On the Web: http://www.ms.com

Source: Yahoo finance http://biz.yahoo.com/ap/080213/morgan_stanley_jobs.html

[1u29]

Tiếp đến Lehman nhá
Tháng trước cả nước Mỹ mất 63,000 jobs. Hãi cả người. Thế mà sao nhà ở đây mãi chưa xuống nhỉ?

Lehman cutting 5 pct of workforce: source
Monday March 10, 11:26 am ET

NEW YORK (Reuters) - Lehman Brothers Holdings Inc (NYSE:LEH - News), the Wall Street investment bank, is laying off 5 percent of its work force, or about 1,430 people, because of difficult market conditions, a person briefed on the matter said on Monday.

The cuts are being made across all divisions and regions, and employees affected are being notified on Monday, the person said.

Lehman employed about 28,600 people as of November 30, 2007, according to the company's most recent annual report.

The bank declined to comment.

Prior to Monday, Lehman had eliminated close to 4,000 jobs in the last year. Many were in its mortgage operations, which have been hurt by the nation's housing slump.

Lenders worldwide have suffered well over $160 billion of write-downs as tight credit market conditions caused losses tied to mortgages and other risky debt.

Several major U.S. investment and commercial banks, including Bank of America Corp (NYSE:BAC - News), Citigroup Inc (NYSE:C - News), Merrill Lynch & Co (NYSE:MER - News) and Morgan Stanley (NYSE:MS - News), have announced thousands of job cuts each since the middle of 2007.

Lehman on December 13 posted a 12 percent drop from a year earlier in fiscal fourth-quarter profit. It is expected to report a roughly 47 percent decline in first-quarter earnings when it reports results on March 18, Reuters data shows.

Shares of Lehman fell $1.76, or 3.8 percent, to $44.60 in morning trading on the New York Stock Exchange.

(Reporting by Jonathan Stempel, editing by Tim Dobbyn

Source: http://biz.yahoo.com/rb/080310/lehman_jobs.html