It looks like another case of greed not being good is becoming a reality.

There is virtually no chance that Lehman would collapse abruptly like Bear Stearns, since the government created a special loan program for Wall Street banks after the Bear fiasco. Instead, the risk is that Lehman, one of the nation’s largest investment banks, will slowly bleed money and employees as confidence drains away.

Lehman’s announcement was on a day when another big financial institution, the giant thrift Washington Mutual, also came under assault. Washington Mutual’s stock plunged by nearly 30 percent, underscoring the worries about the broader financial industry.

Bear Stearns, Lehman Brothers, Goldman Sachs, Wachovia and Wamu they all come tumbling down…

Lehman said it expected to report a $3.9 billion loss for the third quarter, an even bigger deficit than analysts had forecast, and cut its dividend. It also announced long-expected plans to sell most of its prized investment management division and, more radically, to split itself into a “good” bank and a “bad” one.

So what brought this all on? More of the same actually. Greed. It’s the underlying credit crises and lending money to people who can’t pay you back.

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