Lazard's Wasserstein: Billions in losses ahead

Lazard Ltd. (NYSE: LAZ) CEO Bruce Wasserstein predicts that banks will take billions more in losses. This does not come as too much of a surprise. He sees more pain from mortgages, credit card debt, commercial real estate loans and other assets. And he thinks that the Troubled Asset Recovery Plan (TARP) is not big enough to cover the amount of troubled assets out there.

Meanwhile, Wasserstein is doing a less than stellar job managing Lazard. It reported a net loss of $77 million, or $1.17 a share, compared with a profit of $40.3 million, or 73 cents, in the year-earlier quarter. It took a $192.1 million charge related to its decision to buy the 23% of its asset-management arm that it didn't already own. Its revenue shrank 23% to $448 million. And Lazard Capital Markets is paying $2.8 million to settle charges that it provided Fidelity Investments traders with strippers, fine wines, fancy trips, and race-car-driving lessons.

Nevertheless, Wasserstein is regarded as a leader in the banking industry and his remarks do not provide much comfort for investors. However, it would be nice if he used his stellar intellect to come up with some new ideas about where the problems might lie and how to solve them. We can use all the help we can get.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Lazard securities