Investors are bracing themselves for a bloody week on Wall Street, with three of America's biggest investment banks, Goldman Sachs, Lehman Brothers and Morgan Stanley, expected to unveil further writedowns totalling as much as $9bn (£4.6bn).
Analysts are predicting that Goldman, which has fared well compared to many of its rivals, will post a 30 per cent fall in earnings on Tuesday. Morgan Stanley is expected to reveal a 60 per cent reduction in profits over the same period.
But it is Lehman that kicks off the reporting week on Monday, just days after chief executive Dick Fuld culled two of his senior lieutenants, chief financial officer Erin Callan and chief operating officer Joe Gregory.
Speculation is mounting that Lehman is being circled by a range of interested bidders, with reports suggesting that private equity group Blackstone could make an offer for up to 30 per cent of the firm's equity.
It has also been mooted that Lehman is speaking to banks in Korea as well as the private equity firm Flowers about possible cash injections.
Lehman received a surprise boost on Friday when fund manager BlackRock said it was backing the management of Mr Fuld.
Shareholders in the bank already know that it posted losses of nearly $3bn in the last quarter but will be looking for further details of deterioration in its mortgage book.
Shares in Lehman climbed nearly 13 per cent on Friday to close at $25.81 – around $60 less than this time a year ago.
Shares in Goldman and Morgan Stanley have shed more than a quarter and a half of their values respectively over the past 12 months.Reuse content