Last week’s crude and gasoline inventories dropped more than expected as the effects of Hurricane Gustav resulted in some production disruptions. Gustav, which struck last month, was the fourth-most-destructive storm to hit the United States, causing $20 billion in damages. And then came Hurricane Ike. Ike made landfall in the Galveston area of the U.S. Gulf Coast on in the pre-dawn hours Saturday (the day I was penning this column) as a Category 2 storm with winds hitting 110 miles per hour.  Ike’s path toward Houston makes it the first storm to hit a major U.S. metropolitan area since Hurricane Katrina eviscerated New Orleans in 2005, Bloomberg News reported. We won’t know how much direct damage those high winds from Hurricane Ike will cause for several days at least. From the initial reports, the results appear to be devastating. But the indirect costs are ...

Lehman Brothers (LEH), which is currently fighting for its survival, has on Friday (09/12/08) evening, reportedly received an offer for its asset management division from private equity firms Clayton Dubilier & Rice and Bain Capital. Lehman’s (LEH) asset management division encompasses Neuberger Berman and Lehman Brothers Asset Management.

According to the Lehman Brothers website, Neuberger Berman provides money management for individuals and families, while Lehman Brothers Asset Management specializes in investment strategies for institutional and qualified individual investors.

In a bid to raise capital and keep the firm going, Lehman Brothers was looking to sell the asset management division, while retaining the company, or seek outside investors who’d take a stake in the company and infuse capital into the company. Korea Development Bank was interested, but they could not agree on a price with Lehman and they faced opposition from the Korean financial regulators.

The stock, which had managed to stay above

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Lehman Bros. Holdings Inc.’s (LEH) risk of a potential takeover soared today (Tuesday) as its stock nosedived to its lowest level in almost a decade. Once the fourth largest Wall Street investment bank, Lehman has seen its market capitalization shrink from over $47 billion at its stock’s 52-week high of $67.73 down to just $5.6 billion at today’s new 52-week trading low of only $8.00 per share. By 12:40 p.m. in New York, Lehman shares had recovered slightly to trade at $8.99, down over $5 for the day with a decline of almost 40% on reports that negotiations for a capital infusion from state-controlled Korea Development Bank (KDB) had ended without plans for investment. Korea’s Financial Services Commission refused to confirm that talks with Lehman had ended, but the report was enough to send Lehman shares into a tailspin....

It was a brutal day for stocks as the euphoria from the Fannie and Freddie bailout dissipated in response to renewed concerns about weakness in the financial sector. The Dow dropped 280 points to close at 11,231.

Lehman Brothers Inc. (LEH) spooked the market when word spread that the troubled investment bank's negotiations with Korea Development Bank had stalled. Lehman has been aggressively pursuing additional capital in order to provide protection against deteriorating assets and strengthen its balance sheet. Lehman shares were down more than 40% on the day.

The downtrend in the overall market and financial sector was hastened by American Insurance Group, Inc (AIG), as investors speculated that the world's largest insurer would also need to raise more capital to protect itself from exposure to mortgage related assets. AIG has already posted $20 billion in losses over the last three quarters and raised $20

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Analysts are trumpeting the recent drop in oil prices as a step toward normalcy. But is this celebration premature? Or perhaps even misplaced? After all, we all know that over the long haul, energy prices are headed in only one direction - higher. Crude oil plunged 8% to close at $106.23 a barrel last week - reaching its lowest level in five months - as the U.S. dollar strengthened to its highest point against the European euro so far this year. Crude oil prices actually declined for six straight days - the longest stretch since they did so from April 30, 2007 to May 7, 2007. U.S. fuel demand dropped 3.5% during the past four weeks. And unemployment spiked much more than economists had predicted. Even so, oil prices are still 41% higher than they were a year ago. "Demand destruction and the strength of ...

The list of potential investors and possible acquirers in Lehman Brothers (LEH) continues to grow. According to Japanese newspaper Yomiuri Shimbun, Nomura (NMR), which is Japan’s largest securities brokerage house, is considering making an investment in Lehman (LEH).

The newspaper quotes Kenichi Watanabe, the President of Nomura (MNR) as saying that Nomura has $1.87 billion that it wants to use to make investments in financial institutions in the United States and Europe, and Lehman is currently one of its considerations.

Korea Development Bank is supposedly in talks to acquire a 25% stake in Lehman (LEH) and China’s CITIC as well as sovereign wealth funds from the Middle East are also rumored interested parties.

On Friday, we recommended that subscribers to our Options Capitalist trading advisory, purchase the October $17.50 calls in Lehman (LEH) we got in at $1.76. At the close of the stock market on Friday, they were quoted at

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Key Points: Housing inventories are still rising Mortgages are both harder to get and more expensive 2009 profit forecasts continue to be cut on homebuilders and financial companies

My Home Buying Experience

I've been trying to buy a house via a short-sale, and from what I'm hearing and reading, my experience has been typical of many other would-be buyers. It also reaffirms my belief that the housing slump will extend into next year.

Last April, my wife and I made a bid on a house that was selling for less than what was owed (hence the term "short sale"). The owners used 100% financing to purchase the house and have since been unable to keep up with the payments.

In a short sale situation, the lender(s) absorb the difference between the loan amount and the purchase price. Therefore, any purchase offer must be approved by them. The first lender approved our

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Key Points: Housing inventories are still rising Mortgages are both harder to get and more expensive 2009 profit forecasts continue to be cut on homebuilders and financial companies

My Home Buying Experience

I've been trying to buy a house via a short-sale, and from what I'm hearing and reading, my experience has been typical of many other would-be buyers. It also reaffirms my belief that the housing slump will extend into next year.

Last April, my wife and I made a bid on a house that was selling for less than what was owed (hence the term "short sale"). The owners used 100% financing to purchase the house and have since been unable to keep up with the payments.

In a short sale situation, the lender(s) absorb the difference between the loan amount and the purchase price. Therefore, any purchase offer must be approved by them. The first lender approved our

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Lehman Brothers (LEH) which closed last Friday at $16.09, hit an intraday high of $17.53 today, although it has since pulled back for a gain of only $0.31 on confirmation that Korea Development Bank is interested in the company.

In an interview last week, the CEO of Korea Development Bank Min Euoo-sung, said that discussions were under way “to form a consortium with private banks as we believe it is more desirable to acquire Lehman Brothers jointly rather than alone.”

Lehman (LEH) is supposedly looking for Korea Development Bank to invest roughly $6 billion for a twenty five percent stake, which means that Lehman (LEH) has internal an valuation of $24 billion on the company although we don’t know if they are including Lehman’s (LEH) asset management division, which includes Neuberger Berman that Lehman (LEH) supposedly has been shopping around. It is expected that Neuberger Berman could fetch up to $10

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The major theme of today’s trading will be the response of the energy sector in the aftermath of Hurricane Gustav. Index futures point to strong openings as crude oil and natural gas continue to sell off after posting losses during special trading sessions over the weekend and Labor Day holiday.

The storm, which barreled through the heart of Gulf Coast oil production and refining, failed to intensify as strongly as forecasters feared. Crude traded below $107 overnight, hitting 5-month lows. The dollar hit 6-month highs against the euro overnight, trading briefly over 0.69 Euros to the dollar. Commodities across the board are weaker today.

Shares of Lehman Brothers (LEH) are bid 7% higher this morning at $17.25 as the Korean state-owned Korea Development Bank confirmed reports that it is mulling an investment in the troubled broker-dealer. Financials in general are expected to fare well

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