First Bear, Then Fannie and Freddie ... Is Lehman Next?

Lehman's Next Move

Lehman, meanwhile, has reportedly been considering moves to shore up its balance sheet without the U.S. government's help.

The bank had reportedly been in talks with South Korea's Korea Development Bank about the bank investing in Lehman, but hopes for a deal were dampened on Monday after a South Korean regulator urged KDB to be cautious about any such investment.

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Meanwhile, there has been speculation that Lehman will reach for other lifelines, including the idea of splitting into a "good bank" and "bad bank": concentrating all of Lehman's troubled assets into a separate entity -- the "bad bank" -- that would focus solely on mitigating its losses while Lehman's healthy assets would remain in the "good bank."

White said he doesn't see that solution working out for Lehman because the bank simply doesn't have enough capital to add to a "bad bank."

He said that Lehman's best bet is to raise capital by selling Neuberger Berman, a profitable division of Lehman that manages mutual funds and private wealth.

If Lehman doesn't settle on a solution to its asset woes by the time of its third-quarter earnings report, the bank could start seeing some pressure to act from the Federal Reserve, which could threaten to stop lending money to the bank. After the Bear Stearns collapse, the Federal Reserve opened its discount lending window, once available only to commercial banks, to investment banks.

"[There are] going to be some big losses that are likely going to be announced. It might be the case that the Fed would say at that point, 'Gee, maybe we don't want to continue lending to you,'" White said.

It's unclear, however, how reliant Lehman will be on Fed loans in the future. A person familiar with the situation said that the last time Lehman borrowed from the Fed was in April and that it quickly repaid the loan.

That's a good sign for Lehman, Wallison said.

"That would suggest that they're able to finance themselves in the market," he said.