The US Banking system is undergoing a crisis moment, driven largely by the Lehman Brothers being effectively bankrupt. They have not needed to borrow from the Fed since March, but have the ability to do so if required. It appears some customers have left, but not a run on the Bank just yet. Nonetheless this is a crisis.
As Lehman Brothers teetered Friday evening, Federal Reserve officials summoned the heads of major Wall Street firms to a meeting in lower Manhattan and insisted they rescue of the stricken investment bank and develop plans to stabilize the financial markets.
…
Timothy F. Geithner, the president of the New York Federal Reserve, called a 6 p.m. meeting so that bank officials could review their financial exposures to Lehman Brothers and work out contingency plans over the possibility that the government would need to orchestrate an orderly liquidation of the firm on Monday, according to people briefed on the meeting
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A spokesman for the New York Federal Reserve Bank in New York confirmed the meeting but declined to provide details on the discussions. The Wall Street executives included the following chief executives: Lloyd Blankfein of the Goldman Sachs Group, James Dimon of JPMorgan Chase, John Mack of Morgan Stanley, Vikram Pandit of Citigroup and John Thain ofMerrill Lynch. Representatives from the Royal Bank of Scotland and the Bank of New York Mellon were also present. Lehman Brothers was noticeably absent from the talks
Bankwatch 
Wow; this sure reminds Sparky of the Long Term Capital Management (LTCM) collapse about ten years back.
It’s also interesting to note that some of the same slippery players are present at this meeting!
Also interesing is this: The main reason LTCM management got into so much trouble with greed-drive leverage is because the “industry,” eager for LTCM’s growing business, fronted them far too much cash, and at far too low a cost.
This time around, the same thing happened; but this time it was the Federal Reservse under Greespan that cranked out way too much overly cheap money!!
We’re in very, very deep trouble folks; just watch!
Lehman is but the tip of the proverbial iceberg; Wachovia Bank (WB) is close behind; Merrill Lynch’s balance sheet is obviously cooked; Citigroup’s clearly bordering on insolvency, and once its Level III crap is eventually marked to market it will be bankrupt; and the infamous SEC-evading John J Mack will also see Morgan Stanley continue to crumble like an over-cooked cookie.
Stay tuned folks; and unless you want to play the US-based financials Put Option game, stay safely sidelined.
BR,
Sparky
I have a list of both public and private banks that I have on watch bankrupt watch over the next three years.
http://bankruptbanks.blogspot.com/