Lehman Brothers to spin-off its Real Estate Holdings

Global markets are reacting sharply to recent events, asking for more accountability as Lehman Brothers has reported a huge loss and is planning to sell-out a majority stake in its asset-management unit, spin-off real estate holdings and cut dividends to regain confidence of its investors. Real estate spin-off is expected to be completed in 2009, as per reports. Merrill Lynch has also agreed to be taken over by Bank of America. The global credit-market meltdown has led to more than $510 billion of write downs and credit losses in last 12 months, sending financial shocks around the world. Problems at American International Group (AIG) and few other big players is drifting the markets and pushing global financial economy downwards.

Lehman is also engaged to sell about $4 billion U.K. residential mortgage holdings, which will help reduce the company's stake in housing mortgages by 47% to $13 billion. The company plans to shed $25 - $30 billion of commercial real estate investments by placing them in a separate publicly traded firm, to be called Real Estate Investments Global, in first quarter in 2009.

Earlier this US underwriter of mortgage backed securities was also stuck with the assets after two Bear Stearns hedge funds that invested in its instruments collapsed in July 2007, causing the market to freeze. Lehman's second-quarter loss of $2.8 billion was its first as a publicly traded company. It is intending to file for Chapter 11 bankruptcy protection, which will allow it to reorganize and devise a plan to pay its creditors. Asian and European stock markets tumbled as the worries about Lehman risk and further financial market turmoil sent investors scurrying for gold. In the end, most developing, developed and under-developed counties are pushed into economic recession. So what recession means in the new world? It means some smart guys has just finished looting the market and left small investors and citizens to wonder in recess! In worst cases, it can also possibly trigger a public depression due to erosion of confidence on a large-scale.