Bear Stearns, Lehman Bros, Merrill Lynch - investment banks with incredible exposure to the sub-prime monrtgage crisis, over-extended banks with toxic bad debts exploding all over the place. At 5-44am this morning UK time, Lehman bros filed for chapter 121 bankruptcy - the 4th largest investment bank in the world has gone bust. It is going to be one hell of a garage sale as the remaining assets are sold off frantically to anyone who wants a piece of the action.

“Lehman Brothers Holdings Inc. (“LBHI”) announced today that it intends to file a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York.”

Barclays took a look at Lehman Bros and has pulled out. There is no doubt – the collapse of Lehman Bros is one of the biggest collapses in global financial history. They said thet Lehman Bros was too big to fail - they were wrong. In related news Merrill Lynch, another iconic investment bank is to be bought by Bank of America. So the 5 huge investment banks have now become 2. Next in line is AIG.

Robert Peston is superb on these issues. And there is more here

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