After a tough first quarter, some of the largest investment banks on Wall Street are finding that the hedges they took to offset losses on securities may backfire and lead to further losses. Lehman Brothers Holdings appears to be the hardest hit so far, with analysts predicting losses from write-downs and ineffective hedges will be as much as $2 billion. Some of the hedges could begin to work again, however, turning losses booked now into gains.

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