New reports Thursday night suggested that Lehman Brothers Holdings Inc. (LEH) was actively shopping itself to potential buyers, aided by both the U.S. Treasury and Federal Reserve. Which means the U.S. government may be orchestrating its second major bailout in as many weeks, after announcing a takeover of twin mortgage finance giants Fannie Mae (FNM) and Freddie Mac (FRE) last Sunday. Rumors earlier on Friday began with Goldman Sachs (GS), which was said to be considering a stake in Lehman; the blog Naked Capitalism first broke the rumors Friday morning. By the afternoon, the rumors had shifted to Bank of America (BAC), with the Wall Street Journal reporting the North Carolina-based bank was in discussions to acquire the firm. The Washington Post updated the rumors to report that the Treasury and Fed were attempting to orchestrate a takeover of the firm by a group of suitors, ostensibly including both BofA and Goldman, who would assume different pieces of the investment bank. The WaPo said that while the government was “looking for an agreement that would not involve public money,” the challenge is likely to be that any suitor is likely to demand terms similar to those JP Morgan Chase & Co. (JPM) received in its March bailout of Bear Stearns & Co. The WSJ reported Thursday that Treasury officials are growing “uncomfortable” with the perception that the government will bail out troubled institutions — something we at HW think Treasury secretary Henry Paulson and Fed chief Ben Bernanke perhaps should have considered before embarking on a path that now leaves them in an increasingly difficult position, both politically and financially. At this point, turning the tide on that perception will be tough to do. “I don’t think anyone in the [Bush] administration or among regulators have been looking forward enough here,” said one source, a senior bank executive that asked not to be named. “They really thought they’d only have to do something like this once. Not twice. Not three times, or even more.” But government support may be the only way to find a suitor willing to pick up Lehman at this point; the company’s shares have been battered in recent days, and closed Thursday at $4.22, off nearly 42 percent. In after hours trading, shares fell another 10 percent. It’s a quick turn events for the troubled investment bank, which earlier this week moved up its third quarter earnings announcement in an attempt to assuage investor unease. The firm said that it expects to lose $3.9 billion in the third quarter, a loss of $5.92 per share, the largest quarterly loss in company history. Driving the loss are $5.6 billion in net write-downs on residential mortgage and commercial real estate positions. While the news is dire for Lehman, broader equity markets rallied just before market close around the news of a potential Lehman sale on Thursday, with the Dow Jones Industry Average closing up nearly 1.5 percent at 11,433.71. Wells Fargo & Co. (WFC) rose 6.8 percent to $33.85, nearing its highest level this year; and much-battered Washington Mutual (WM) even saw its shares jump roughly 22 percent. Disclosure: The author held no relevant positions when this story was published; indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.