“We recommend investors remain on the sidelines with Lehman until the firm demonstrates a reduction in leverage and lowers its exposures to troubled asset classes.” – Sanford Bernstein analyst Brad Hintz

Venus challenging Uranus yesterday certainly brought shocks and surprises to Wall Street when troubled investment bank Lehman Brothers (LEH) announced a management shakeup. With Mercury and Venus in dualistic Gemini, two heads needed to roll. But with Mercury retrograde, the story has yet to completely unfold.

Effective immediately, Chief Financial Officer Erin Callan “will be rejoining the investment banking division in a senior capacity” and will be replaced by Ian Lowitt, who will also join the firm’s Executive Committee. Herbert (Bart) H. McDade III will succeed Joseph Gregory as president and chief operating officer of the firm. The Financial Times and The Wall Street Journal are reporting today that Callan and Gregory told CEO Richard Fuld that they should step aside from their roles as an effort to restore Lehman’s Street cred. With Mercury conjoining Fuld’s natal Uranus Wednesday, Fuld concurred the management shakeup was necessary.

It is doubtful that replacing two executives at this stage of the game will placate Wall Street. The numbers spewing out of Lehman Brothers are always quoted in billions. A $29 billion commercial real estate debt portfolio. $12 billion in capital raisings so far this year. I say “so far” because back in February Lehman said a $1.9 billion preferred offering “took care of their full year needs.” Then Lehman raised $4 billion in late March that they said really didn’t need, but did as a gesture to allay Wall Street’s fears in light of the collapse of Bear Stearns. Then on Monday came the fiscal second quarter earnings pre-announcement $2.8 billion loss, and the $6 billion preferred and common stock offering.

I first wrote about Lehman on June 18, 2007 in response to a Barron’s article pushing the brokers.