Lehman Brothers [1] may not be facing a Bear Stearns-like insta-implosion, but it's staring at a long, drawn out demise that may prove just as painful. At this point, we have to question its ability to survive as a standalone bank. It's clear that raising capital will not be easy. For whatever reason, the talks with Asian investors broke down. It doesn't look like selling assets is going to work out, given the credit rating and earnings implications. Losses will mount. Writeoffs will continue. Perhaps Richard Bove, of Ladenburg Thalmann, has it right: he's telling clients to buy the stock because the stage is set for a hostile takeover. Is that why George Soros is loading up? (See next item.) But that begs the question: Who would want the entire bank? They might want the asset management properties, but the rest of the store may not be worth a lot. Debt underwriting--still Lehman's big unit--has tanked, so the options here are really limited. This is water torture, but then again maybe Lehman CEO Richard Fuld has something up his sleeve.

For more:
- here's a New York Times article [2]
- here's a Forbes article [3]

Related Articles:
What does George Soros see in Lehman Brothers? [4]
Can Lehman Brothers survive as an independent firm? [5]
Could anyone buy Lehman Brothers right now? [6]