Lehman and the Exploding Hedge

According to Susanne Craig, Lehman CFO Erin Callan "receives a slimmer daily financial summary than her predecessors, relying more on data from the trading-floor contacts built during her 13-year Lehman career". I wonder when and how she found out about this?

Lehman Brothers lost about $600m on a single hedging position in the second quarter, adding to what is expected to be a larger than anticipated loss that may lead the bank to raise more capital...
The loss of roughly $600m would be in addition to setbacks Lehman is expected to announce on previously successful hedges on its large exposures to commercial and residential mortgages, people familiar with the matter said. It remains unclear whether Lehman will provide any details on the single $600m hedging loss when it reports earnings this month.

I'm beginning to think that Brad DeLong's description of my blog entry yesterday ("Felix Salmon Says Bear Stearns--Except for Its CEO--Was Smarter than Lehman Brothers") is looking increasingly astute. Lehman has no room for error right now, and certainly no room for $600 million errors. If it's capable of making mistakes of this magnitude when the stakes are so very high, then yes it should be talking to strategic investors. But not about a capital infusion; rather about an outright acquisition.

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