Lehman Brothers (RIP)

Source for the image

Feds' Lehman Plan Doesn't Sit Well With Wall Street Execs
Sale of Lehman Remains Dependent on Taxpayer Support
Barclays Abandons Talks to Buy Lehman
Bank of America Said to Walk Away From Lehman Talks
Wall Street Prepares for Lehman Bankruptcy
Lehman Files for Chapter 11 Protection
Greenspan: Crisis May Be Once in Century Event, More Firms to Fail

The rise and fall of LEH:


It looks like Lehman is going to be the test case where we see what happens when one of these gigantic financial institutions really goes bankrupt. Is Lehman "too big to fail," well I guess we'll find out. Up until now the mammoth firms that went under were bailed out by the gov (FNM, FRE), a bigger fish (BAC/CFC) or both (JPM/BSC). I'm excluding IMB in this because they were small compared to these others ($40B in assets).

I heard a trader use an interesting metaphor for the situation last week. When a pack of lions has a herd of buffalo surrounded, the one with the fewest connections at the edge of the herd is the one the lions will eat. Right now the buffalo at the edge of the pack are WM, LEH and MER while the lions are GS, JPM, BAC and WFC.