commentary of BSC, Leh, and GS

Until now, three brokerage firms have released 2Q 2007 earnings, and Leh and GS beat the estimate. The general theme is that if your business mix are diversified geographically and across different security assets, if you will do well. BSC miss the estimate because 1.higher exposure in FI assets -65% revenue related to FI products, around 50% for Leh and GS. -sales of mortage-backed bonds in U.S fell 19% in 2Q, -35% subprime, and -25% in Alt. BSC is No.1 in subprime and Alt-A mortgage origination. So BSC took huge loss in mortgage origination. 2.not internationally diversified ->80% revenue is from U.S, less than 60% Leh and GS -After Feb selloff, Europe vs Asia market has rebound dramatically. Euro and Aisan indices rebounded over 10% from Feb to end of May. So it miss chance to reap the benefit from favorable equity market. That partly explains why its growth of equity capital market revenue is negative where Leh can double. The dramatic loss of BSC also reflect a.revenue has recovere from loss -2% last qtr to 1% this quarter. b.the write down of specialist unit, Bear Wagner Specialist LLC due to shfit of NYSE to automated trading. c.it is catching up as international player, long way to go