To simply profess that we are in a difficult market would be an understatement.  Although the indices didn't get hammered today, it was hard to get too excited about the leadership.  Technology is holding up strong, but with a pinched consumer and competitive input pricing, I am skeptical of a sustained rally based on fundamentals.  However, on the flip side, I am compelled to think the recent weakness in financials, and most particularly the investment banks, is overblown. 

There has been a lot of chatter in the media about Lehman Brothers (NYSE: LEH) failing and suffering the same fate as Bear Stearns (NYSE: BSC).  I understand the concern, but I think it is misguided.  Here's why:  First off, Lehman Brothers isn't Bear Stearns.  Bear Stearns is a Wall Street anomaly.  Why, because the majority of institutional trading was cleared through Bear.  What is the significance of this you ask?  It matters because hypothetically, it created a situation where there could have been a "run on Wall Street," which would have resulted in massive trading imbalances and perhaps even a market crash.  Evidence of this is the fact that the Federal Reserve had to intervene.  The Fed was definitely cognizant of this issue.  Otherwise, why would they get involved?

Although Lehman Brothers has significant Balance Sheet problems, it is in a fundamentally different position than Bear Stearns was, and would be better compared to other banks whose debt structures have been weakened due to the credit crisis.  More relevant I believe, is the probability of another bank taking over Lehman.  The intellectual capital and investment banking relationships at Lehman are extremely valuable.  Barclays would be a plausible suitor.  If not, who knows, maybe Shearson will take them back!