Financial Stock's Vicious Circle.

The author reflects on the financial stocks cycle wherein falling share prices make it difficult to raise capital, increasing concerns that firms will be unable to address financial problems, and leading to further share-price declines. Such decline increases the possibility of credit rating downgrades. Among the stocks affected by the cycle are Lehman Brothers Holdings and American International Group. He asserts that it will take time before investors can confidently assess the value of bank and brokerage-firm balance sheets.