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But analysts say that the liquidation of Lehman will put the financial markets under pressure for some time as banks are forced to take additional write-downs and credit spreads widen. And the Wall Street Journal reports that some traders are having trouble trying to find new counterparties for their trades with Lehman.
The Next Victim: The financial firm seen as the most vulnerable is now clearly the American International Group. The insurance giant, desperate for new capital as its losses mount, may announce asset sales as soon as today. The company has also reportedly asked the Federal Reserve for $40 billion in short-term financing.
A.I.G. lost more than $13 billion in the first half of this year, most of it due to investments in mortgaged-backed securities and other debt-related instruments.
And there may be others. Still overhanging the financial-services industry is the fate of Washington Mutual, one of the nation's largest mortgage lenders. A team of private equity firms pumped $7 billion intothe thrift last April, but its losses have continued to mount and its shares barely paused in their slide. They have lost more than 90 percent of their value in the last year, and closed on Friday at just over $2.
The End of the Investment Bank: With Bank of America's $44 billion acquisition of Merrill Lynch, only two independent Wall Street firms remain: Goldman Sachs and Morgan Stanley. Will they now feel pressure to merge with a big commercial bank?
