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'It's the end of the Wall Street era' By Haaretz Correspondent and Reuters , By Eytan Avriel Tags: Lehman, israel "It's the end of the Wall Street era. There's no such thing any more," says Eddy Shalev, a leader of international brokerage operations in Israel for years, through owning and running the Israel branch of Oscar Gruss and later, of Oppenheimer. "Lehman [Brothers'] bankruptcy and even more so the sale of Merrill Lynch to the Bank of America mark the end of the era of independent brokers," Shalev said yesterday. They have all fallen, been sold or closed down. It's unbelievable," he sums up. Speaking from New York, Shalev claims that the fall of the Wall Street investment houses proves that the American system of Wall Street simply doesn't work. The brokers and their managers made money while investors didn't, he says. "That system, in which a handful of people made tremendous amounts and then took the company's money and assumed gigantic risks, has collapsed," Shalev says. Advertisement Wall Street lacked the carrot and stick: The managers gambled with the companies' equity and failed to understand what was happening under their noses, he says. Nor is it over, Shalev warns. "The real fear is what will happen with the insurance company American International Group, and that's a real problem." Inevitably the fallout will spread to Israel, he says. "First of all there are Israeli firms with exposure in the millions of shekels to Lehman. Beyond that, it isn't clear what appetite the giant bodies being created will have for little deals in Israel. The market may become less competitive, though I believe that [Wall Street] will continue to float Israeli companies, once the primary market reopens of course. Right now, it doesn't exist." The U.S. Federal Reserve Board refused to bail out Lehman Bros but AIG, hoping to stave off rating downgrades and shore up the capital of its holding company, has made an unprecedented approach to the Federal Reserve seeking $40 billion in short-term financing, the New York Times reports. Last week AIG shares fell by about 50% on liquidity worries. The company suffered losses of $18 billion over the past three quarters from guarantees it wrote on mortgage derivatives, and a credit rating downgrade could force it to pony up to $14.5 billion more in collateral, according to a regulatory filing in August. Bookmark to del.icio.us   Saddam in Tel Aviv Israel's Igal Naor 'never wanted to play Hamlet, only Saddam.' The preacher Archbishop Tutu to UN: Israel may have committed war crime.

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