On his economics blog the Big Picture, Barry Ritholtz differentiated among three of the big financial-firm meltdowns, in layman’s terms:
Lehman Brothers is like the little kid pulling the tail of a dog. You know the kid is going to get hurt eventually, and so no one is surprised when the dog turns around and bites the kid. But the kid only hurts himself, so no one really cares that much.
Bear Stearns is the little pyro—the kid who was always playing with matches. He could harm not only himself, but burns his own house down, and indeed, he could have burned down the entire neighborhood. The Fed stepped in not to protect him but the rest of the block.
AIG is the kid who accidentally stumbles into a biotech- warfare lab … finds all these unlabeled vials, and heads out to the playground with a handful of them jammed into his pockets.