With government and Wall Street officials working feverishly over the weekend to rescue ailing Lehman Brothers Holdings through the sale of parts or all of its assets, the big worry among Street pros is how many more troubled companies will holler for federal help following the bailouts of Bear Stearns, Fannie Mae, and Freddie Mac.
A host of names have popped up, including brokerage king Merrill Lynch, insurance giant American International Group, and the country’s biggest savings and loan, Washington Mutual.
The well-regarded chief investment strategist of Raymond James Financial, Jeffrey Saut, says he figures the selling stampede in financials is far from over, as it will take years to resolve the sector’s problems.
The International Monetary Fund, which is predicting more than $1 trillion in bank losses arising from the current credit crisis, also sees the need for a lengthy recovery process. So far, the major banks have booked about $506 billion in credit losses, more than triple the total lost in the savings and loan crisis of the 1970s.
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