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Here's an early take on winners and losers from the weekend's momentous dealings on Wall Street.
Winners
The Federal Reserve and Treasury Department: Hank Paulson was dealt a complicated, unpleasant hand with the credit crunch. Many give him plaudits for the job he has been doing. This weekend he finally made his point about moral hazard.Two previous bailouts -- Bear Stearns, and Fannie Mae-Freddie Mac -- that hurt common stockholders didn't do it. But the Chapter 11 bankruptcy filing by Lehman Bros. (LEH, news, msgs) makes Paulson’s point.
Meanwhile, New York Fed President Timothy Geithner was part of the process and continued to put his stamp on the financial system -- is he setting the stage for a longer career in politics?
- Readers talk: Who loses in Lehman bankruptcy?
Bank of America: First as a potential suitor for Lehman, then as the official buyer of Merrill Lynch (MER, news, msgs), Bank of America (BAC, news, msgs) was one of the few firms involved that had something resembling free choice.
Bank of America has lusted for years to be a more powerful investment bank. And despite last year's comment by CEO Ken Lewis about having had all the “fun” in investment banking that he could stand, the company is getting one of the best on Wall Street.
It also is getting a massive retail brokerage force -- the envy of its rivals -- that should be an easy fit with BofA's retail branches.
Still, it also gets the task of figuring out what to do with Merrill's toxic assets and the pressure of figuring out the integration at the same time it continues to absorb beleaguered mortgage lender Countrywide Financial.
Goldman Sachs Group: It's considered the strongest and best-capitalized investment bank. Two of its biggest competitors -- Lehman and Bear Stearns -- have been knocked out this year, and Bank of America, JPMorgan Chase (JPM, news, msgs) and Merrill Lynch are weighed down by big, fussy integrations.
Goldman will have a chance to hoover up any abandoned assets, and reportedly is already claiming Lehman's positions as a specialist. Goldman also advised Bank of America on its $44 billion takeover of Merrill, which spells rich fees.
Merrill Lynch: The Thundering Herd was widely expected to be next after Lehman. Instead, it found a strong partner and avoided selling itself at a discount. In fact, the $29-a-share takeout price would have been a respectable premium even in normal circumstances.
In addition, its investment-banking expertise is much stronger than Bank of America's, which gives Merrill a decent chance at calling some of the shots at the merged company.
JPMorgan Chase: The company got the benefit of the Fed's largesse when it was abundant. Now that regulators are tightening the screws, JPMorgan's deal for Bear Stearns looks all the better.
Short sellers: David Einhorn may or may not have been right about Lehman. But the Chapter 11 bankruptcy filing is a boon to short sellers who bet on Lehman's demise.
More from MSN Money and The Wall Street Journal
Losers
CEO Dick Fuld and Lehman employees: It is hard to wrap one's mind around the fact that a securities firm that was widely believed to be adequately capitalized five days ago would over the weekend be sent to the brink of a bankruptcy filing.Besides the massacre of net worth and the loss of jobs, it is a striking blow for a 158-year-old firm that was known for its tight-knit culture and the fierce loyalty of its employees.
One woman who had worked there for 20 years said she hadn't sold a single share of stock in all that time. Many employees are furious with Fuld.
Lehman shareholders: First, a 94% slide this year and now the prospect of being the first shareholders in this year's bailouts to see their stock become entirely worthless.
Barclays: In the lost-opportunity department, Lehman would have been a good fit for Barclays and would have helped the U.K. bank expand in the United States. But it walked away, citing the U.S. government's refusal to provide any financial backstop.
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