Once you thought things couldn’t suck anymore in the financial sector, another Wall Street player is apologizing for screwing up.

Lehman Brothers, one of the top Wall Street banks working in investment banking, investment management, private equity, etc. said today that it had some bad news for everyone who doesn’t like bad news.

The big LEH announced it would be taking nearly $2.8 billion in 2nd quarter write-downs and would be taking its first quarterly loss as a public company. Compare this $2.8 billion loss to the $489 million profit they made this time last year. Wall Street and the financial world have become much different places since those care-free, hug your neighbor, make some money days.

Many people thought that Lehman was one of the good guys. A solid bank that wouldn’t get involved in all the messiness that Citi, Merrill Lynch, and (taking things to a whole new level) Bear Stearns were wading through. But it looks like almost no one is coming out of this down-turn in the economy and never-ending fallout from subprime unscathed. Well, Goldman Sachs is still the pretty boy on the block, but they’re like in a league of their own.

A NY Times article detailing the announcement, tried to explain how it happened:

The losses came from negative mark-to-mark adjustments, or the loss in the value of an asset and losses from its own trading activities, called principal trading.

But no one was really surprised that Lehman would take a loss, the real shock comes from how much of a loss. It’s all about giving the right estimates. And this quarter’s LEH estimates were wayyyy undersold. No one thought it would be this bad. I guess someone forgot a few zeros somewhere?

And now Lehman’s plan to rebound? Raise $6 billion in fresh capital from investors. Easier said than done, right? Lehman is selling off a portion of their stock offerings to make up for the debt. However, the stock has been down almost 10% of its previous value this morning on the news of this announcement.

But guess who is stepping up saying ‘We got yer back on some of that fresh capital’? Well it’s everyone’s favorite Garden State. The New Jersey Division of Investment, which manages over $80 billion in public pension money, is apparently in the business of ‘rescuing’ those hit hard by write-downs. Need some credentials? Just ask Merrill Lynch, who NJ helped out a few months ago when they found themselves on hard times.

But if NJ can’t get the job done, what else can the Lehman ‘Bash’ Brothers do to survive? Maybe they should team up with those delightful Jonas Brothers. Those guys are so wholesome and talented, there’s no way anyone would ‘short’ them.

Dow Jones: Lehman To Raise $6 Billion After Deep $2.8 Billion Loss, June 9, 2008

NY Times: Lehman Posts Loss and Plans To Raise Capital, June 9, 2008