TEXT OF STORY

Kai Ryssdal: Ever since Bear Stearns almost went under three months ago, the buzz has been about Lehman Brothers.

Lehman’s the smallest of Wall Street’s big independent investment banks — small in a business where small isn’t always good.

The only thing big are its losses, and as our New York bureau chief Jill Barshay reports, that’s gotten people talking.

Jill Barshay: Everyone’s wondering if Lehman Brothers will be the next to disappear like Bear Stearns.

Christopher Whalen is managing director at Institutional Risk Analytics.

Christopher Whalen: The dealers like Bear Stearns and Lehman are an endangered species. It’s very, very hard to imagine how they’re going to survive in this illiquid and very volatile market.

Whalen worries that dealers don’t have enough business lines to fall back on like customer deposits, which give bigger banks access to lots of cash.

Scott Sprinzen of Standard & Poor’s cut the ratings of Lehman, Morgan Stanley and Merrill Lynch last week, but he expects them all to survive, in part because the Federal Reserve is helping out. Sprinzen’s more worried that the investment business itself will slow: fewer mergers, stock offerings…

Scott Sprinzen: We would expect in the current environment that the consumer is going to be less interested in investing aggressively.

He says investors are putting their cash into things like money market funds, which are a lot less profitable for everyone.

In New York, I’m Jill Barshay for Marketplace.