American International Group Inc, the world’s biggest insurer, has announced it will replace CEO Martin Sullivan. The news comes after AIG reported record losses due to risky mortgage bets.

Sullivan follows the departure of a wave of Wall Street top execs, including the recent bloodletting at ailing investment bank Lehman Brothers.

“On Wall Street, after Bear Stearns fainted, the other financial firms took smelling salts,” says Bill Bonner in The Daily Reckoning.

Lehman Brothers, the fourth largest US investment bank, is at the centre of a storm of bad news stories.

Shares in the Wall Street powerhouse tumbled 31% last month on the NYSE on expections of heavy Q2 losses and the likelihood that the bank will have to raise cash to cover subprime-related writedowns. However, unlike rival Bear Stearns, the word on the Street is that Lehman will survive.

“On Wall Street, after Bear Stearns fainted, the other financial firms took smelling salts,” says Bill Bonner in The Daily Reckoning.

With the gas prices nearing $4 a gallon in many parts of the US, one of the alternatives people are starting to talk about is solar-powered cars.

Google says the term “solar powered car” is one of the hottest search trends on the internet, as Americans seek alternatives to high fuel costs.

According to a recent Lehman Brothers report, the solar-powered-car revolution may not be coming anytime soon. The Wall Street bank in predicting crude oil prices at $83 a barrel in 2009 and as low as $70 in 2010.

The present period in financial history favors ducks and undertakers. On the banks of the Thames and the Hudson, every day they fish a couple more cadavers out of the water. And then the medical examiner opens them up so we get to see what caused them to go under. What a sight! It is amazing that any sane investor ever had anything to do with them in the first place.

When recession comes earnings fall and those slippery PE numbers can start making fools out of us. The trick to smart investing, as Mark Slater once commented, was finding those companies where earnings were going up so fast that at some point the company would be re-rated by the market thereby boosting the share price.