There is a lovely article in the Daily Telegraph about Barclays being in denial about the size of the losses that it needs to take. One thing that caught my eye was the following: It has even been suggested that Barclays chose not to offload its Alliance Boots debt, when others in the banking syndicate took a 10 per cent valuation cut to get the assets off their books, because Varley and Diamond wanted to protect the minimal writedowns on leverage loans. Well you might say that. I couldn't possibly comment. Anybody looked lately at their consumer lender exposure in Japan? I couldn't possibly comment. How about just the almost total absence of losing trading days in the investment bank. I couldn't possibly comment. Anyone you know carried an 800 billion pound investment bank portfolio and not lost money on at least some days... I couldn't possibly comment. How about the ...

Lehman decided to raise some cash by issuing $3 billion in convertible preferred shares.  In an interview today: 

"We still maintain that we don't need capital, but we've realized that perception is the dominant issue in today's markets," the chief financial officer, Erin Callan, said in an interview. "This is an endorsement of our balance sheet by investors."

Lehman did not provide terms of the sale, which apparently is being priced tonight.  Price talk is for an interest rate of 7.05 to 7.5% and that the conversion premium would be approx 30% above the current stock price.  The preferred will be noncumulative, meaning the firm can skip dividends without much penalty if it runs into trouble. Lehman said it would be the "sole book-running manager" of the offering, but did not say if there was a syndicate behind it or if it was going to place the shares

...