It’s been a week of nightmares and anxieties on Wall Street. Lehman Brothers took a breathtaking plunge, trigging a stunning transformation of the financial system landscape. Merrill Lynch & Co., the world’s largest brokerage, sold itself in a last-ditch effort to avoid failure to Bank of America Corp. And a forced reconstruction of the world’s largest insurance company, American International Group Inc. (AIG), weighed heavily on global markets, as the ripple effects elevated anxieties around the world.

On Monday, Lehman Brothers filed for bankruptcy protection, and by late Tuesday had sold its North American investment banking and trading operations to Barclays, Britain’s third-largest bank, for $250 million. By midweek, the Federal Reserve, seeking to calm the crisis, gave a two-year $85 billion loan with an interest rate that tops 11% to AIG. The deal was in exchange for an 80 percent stake in the company. AIG lost billions in the risky business of insuring against bond defaults.

"People are scared to death," said Bill Stone, chief investment strategist for PNC Wealth Management. "Who would have imagined that AIG would have gotten into this position?"

Despite the government bailout of AIG, angst about the financial system still ran high. The Dow Jones industrial average dropped nearly 500 points, and investors seeking the safety of hard assets and government debt sent gold, oil and short-term Treasurys soaring. And once again, the U.S. borrowed heavily from overseas -- $40 billion – from countries like China and the Middle East. Now all eyes are on Goldman Sachs Group Inc., Morgan Stanley, and the country’s largest thrift bank, Washington Mutual.

Closing out the week, the government announced it would buy up firms’ bad assets to boost lending. The $700 billion bailout could be the biggest since the Great Depression. The good news of the multi-billion dollar proposal to “save” Wall Street is that homeowners facing foreclosure could also benefit.