Bailout? What Bailout?

Helicopter Ben pretends it's not coming.

Concern that Lehman Brothers Holdings Inc may fail to find a buyer because the U.S. government is reluctant to provide financial backing sent the investment bank's shares tumbling to a nearly 14-year low on Friday.

Lehman's bonds also dropped ahead of what is expected to be a series of frantic calls this weekend between Lehman, U.S. regulators and potential bidders. Bank of America Corp is widely seen as a leading contender, with British bank Barclays Plc also cited as a possibility.

The Financial Times reported that BofA, the No. 2 U.S. bank by assets, was considering a joint bid for Lehman along with private equity investor JC Flowers and sovereign wealth fund China Investment Co.

Lehman shares fell as much as 16 percent in early trading, though they trimmed those losses following the FT report. Lehman declined to comment.

"I think they're going to have to draw a line at some point," Rose Grant, managing director of Eastern Investment Advisors in Boston said of Washington regulators. "This could be the point."

The credit maelstrom is threatening other financial companies, including leading brokerage Merrill Lynch & Co Inc and American International Group Inc, once the world's largest insurer by market capitalization. AIG plunged 21 percent, while Merrill slid 5.6 percent.

Here's the reality of the situation, folks: the special Fed discount borrowing window is already a bailout of Lehman, and it's still not working.

The Fed's refusing to bail the company out for now, but if that doesn't happen, the financials are DONE. A full fledged-panic will ensue, and they will have to bailout the entire sector.

The Fed bailout option is the only thing keeping Lehman out of being a penny stock right now. WaMu and AIG too. No bailout? No financial sector.

A decision will be made this weekend to bail out Lehman. It's coming. If not, the stock market crashes due to a total loss in confidence as dozens of financials disintegrate.

Option 3 will be a buyer magically appears. Don't count on it. It's bailout or it's the end of the game.