But Richard LeFrak, president of the LeFrak Organization, says the Lehman mess is only distracting everyone from even worse threats to the financial sector:
"I think WaMu's a bigger problem, frankly," LeFrak tells CNBC. "If they start having a run on the banks and people see the lines to get (their) cash out, that's real hysterical behavior."
Stocks end Thursday higher, riding a late-day rally with oil prices hovering near $100 a barrel and market scuttlebutt pointing to a resolution for Lehman Brothers within days. The Dow jumps 164.79, or 1.5 percent, to close at 11433.71. The S&P gains 1.4 percent and the Nasdaq rises 1.3 percent.
Some market pros, including Doug Kass, founder of Seabreeze Partners Management, suggest that the late rally is due to a report that Lehman had actual interest from suitors, including Bank of America -- although the collossus is already saddled with its acquisition of Countrywide Financial.
BofA shares reverse course, finishing up 2 percent. AIG squeaks in with a 0.3-percent gain; and Washington Mutual shares surge 22 percent to close at $2.83. Earlier, the stock sank below $2 for the first time since 1990.
What the Experts Were Saying: