Lehman's View of Merrill

Many of (Merrill’s) assets are marked at or close to
their interest-only valuation levels which limits the amount to which they
could realistically be written down further. We (Lehman) do not anticipate
significant charges going forward, but there may be some. "

Are we close to the bottom on Merrill.

ML has fired its CEO and, along
with other major banks, has chosen to take significant write-downs and rebuild
from here. It is our belief that Merrill CEO John Thain most likely tried to
write-down as much as possible in the fourth quarter. Most CEO’s in these
situations clean house by exaggerating their exposure to future problems, so it
is then easier for themselves to take credit for cleaning up the company. It is
my view that this last, 16 billion dollar write down will end up being the last
significant write-dow that we will see from Merrill Lynch. Let me preface that by saying when I say significant I am suggesting will will not seeing anymore writedowns larger then say 5 billion.