The implosion of Lehman Brothers was just two years ago, and yet Wall Street and the financial industry are still struggling to rebuild from the ashes. Bear Stearns was the first of the Big Five investment banks to topple back in the spring of 2008, but when Lehman failed on Sept. 15 in a record-setting $690 billion bankruptcy, the industry landscape was forever changed.
Shotgun marriages and forced consolidations were one of the most immediate consequences of Lehman blowing up. Bank of America (BAC), the biggest U.S. bank by assets, bought Merrill Lynch and its vaunted Thundering Herd of brokers. JPMorgan Chase (JPM) scooped up failed Washington Mutual, once the country's biggest thrift, to vault into second place behind Bank of America (BAC). And once mighty Citigroup (C), the pioneer of the idea of the financial supermarket, partially dismantled itself under the weight of bad loans and a massive government bailout.
The fragility of economic recovery makes it tricky to say whether these banks stocks are good long-term buys or just dangerously speculative bets. For the bull and bear cases on BofA, JPM and Citigroup, see the video below: