Judah Kraushaar Quotations

Multinational/trust banks will probably broadly deliver on Wall Street estimates. However, we expect the quality of earnings to be poor as securities gains and other unusual items will commonly be used to offset weak trading results.

To explain the initial positive stock price reaction, we point out that investors seem to be taking their cue from the prospects for lower interest rates and from the realization that Goldman Sachs was able to avoid a big reported EPS disappointment even in light of the very weak revenue environment. Four our part, we would be heartened by an overt drop in U.S. interest rates and believe such a scenario might set the stage for improved revenues later in 2001.

Most of the company's revenue streams appear to have incrementally weakened each month in the quarter.

We would not be surprised to see $4-5 billion in proceeds from this transaction, which may be used for buybacks or, more likely, to support acquisitions of better growth/higher margin businesses.

Assuming Lehman can successfully stage a profit rebound in early 2002, we believe the shares will prove to be an excellent value at this point, and we continue to see strong franchise value given the scarcity value of solid investment banking franchises.

They will probably get rid of low-level jobs in high-cost cities, such as London, New York and Hong Kong.

Indeed, we continue to believe the fourth quarter will mark the trough for revenues - a firming economy could support a decent recovery next year.