With emergency meetings happening with the Federal Reserve and major Wall Street banks over the Sept. 12-14 weekend, much has gone down.

Lehman Brothers, the over a century old investment bank, has filed for bankruptcy. Bank of America (BAC) was seen to be a potential buyer, but they went after the bigger fish. Bank of America made an offer to buy Merrill Lynch for $29 a share.

Both Lehman and Bear Stearns have fallen in the past year. Merrill is no longer Merrill. This signals a major change for Wall Street; who will survive in the 21st Century?

Almost all of the big investment banks forgot about risk management when they realized that they could get away with borrowing more than they could handle, and make obscene profits out of it. The market will not allow them to hold that type of liability during these troubled times. Many of their bets counted on real estate which have taken huge price discounts, essentially eating away the value of their holdings.

Goldman Sachs and Morgan Stanley are the only big stand-alone investment banks to survive. Both banks have handled the credit and real estate crisis considerably well, but the market is waiting to see what their earnings announcements reveal. Goldman Sachs is to announce earnings on Tuesday Sept. 16th and Morgan Stanley is to announce earnings on Wednesday Sept. 17th.

This is an opportune time for either these two banks to be the shining light of Wall Street (as if they aren't already), or the slimming can allow room for smaller banks to come out on top in the next couple years.

Bank of America just gained one of the most important assets they may ever get: Merrill Lynch's investment bank. BofA has had a struggle making a name for itself in investment banking, and now they own the largest broker in the world.

Keep an eye on who may be coming out on top and in better shape. This could be a huge investment opportunity!




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