See: http://news.bbc.co.uk/2/hi/business/7615712.stm

If Lehman files for Chapter 11 bankrupcy protection tomorrow, then the dreaded DERIVATIVES issue of Credit Default Swaps (CDS), could be brought out into the open. There, the losses are measured in $trillions (with a T) and will put the world's financial system into unchartered and rough seas.

i use to negotiate swap agreements...glad I got out of it...

BofA is buying Merill Lynch....this is getting interesting...
bofa buys merril lynch

That's a surprise, and worrisome. Thanks for the link.

Next year is my year for converting most of the lawn to garden, planting a few rows of espalier'd fruit trees, and building the chicken coop. This is going to be a rough ride.

I just got this email alert from my NY Times online subscription.

Breaking News Alert
The New York Times
Monday, September 15, 2008 -- 12:56 AM ET
-----

Lehman Brothers Announces It Will File Chapter 11 Bankruptcy

Lehman Brothers, the storied Wall Street securities firm,
announced on its Web site early Monday that it will file for
Chapter 11 bankruptcy protection.

Read More:
http://www.nytimes.com/?emc=na

UK and European banks flood markets with liquidity while global shares freefall on 158-year old lender's collapse

http://www.timesonline.co.uk/tol/business/...icle4755498.ece

DOW is only down 200 at opening. Maybe it won't be a total wipeout day, after all.

I would have guessed 500, but I would suspect they'd shut down the exchange if it got that high.

I read this morning that Barclays had a plan to purchase Lehman Brothers, but got out when it was apparent that the government was not going to bail it out.

http://news.yahoo.com/s/ap/20080915/ap_on_...ancial_meltdown

Another case of "Privatize the profits, socialize the losses."

Plunge Protection Team (PPT) could be up to its manipulative tricks. Then again, the stock market is up one day and down the next; and that will likely continue to be the case so long as the US$ is still considered convertible currency.

Time to start burying $$$ in coffee cans.

Lehman listed $613 billion in debt, in its bankrupcy filing.

That is the largest bankruptcy on record.

In the wake of Lehman's demise, Fed Chairman Bernanke and Treasury Secretary Paulson will try to put out the word that it's no great trauma.

But it's a bluff and they know it. If they openly admitted that the Lehman collapse will paralyze Wall Street, torpedo the stock market and sink economy, they'd have to pony up $100 billion or more to support it. Instead, their agenda has been to push big banks to put up the money.

Either way, there's no denying that the Lehman debacle is a massive and immediate threat to U.S. and global markets. At the latest reckoning, Lehman had $691 billion in assets. That makes it bigger than Wachovia, twice as big as Washington Mutual, and over sixteen times larger than Schwab.

Lehman's debts - at $668.6 billion - are also enormous. Even if you added together all the debts of TD Ameritrade, E-Trade and Schwab, you'd still have only $108.5 billion, or less than one-sixth the total debts which Lehman reports.

In fact, among brokers, there are only two other U.S. firms that beat Lehman in the debt category: Morgan Stanley, with $1 trillion, and Merrill Lynch, with $988 billion.

Can you imagine anyone in his right mind making the argument that a Merrill Lynch downfall would be "no great trauma to investors and financial markets"? Of course not.

The reality: The collapse of America's third-largest brokerage operation is very serious business with equally serious consequences. The primary concern ...

Defaults on Derivatives

We've lost count of how many times the authorities have virtually sworn on a stack of Bibles that "our financial system is fundamentally sound."

But no one could possibly lose count of their recent desperate efforts to prevent the system's collapse - actions which directly belie their words:

One - the coordinated efforts by central banks to flood the global economy with liquidity in the summer of 2007.

Two - the hasty bailout of Bear Stearns in March of this year.

Three - the giant Fannie and Freddie rescue announced just eight days ago.

Each time they intervene, they say "we must not reward CEOs who deceive the public and walk off with multibillion dollar bonus checks." And each time they say it's the "last time we'll make an exception to that rule."

But then they go ahead and do it anyhow, not only breaking their own word ... but also trashing the long tradition of restraint established by their predecessors since the Great Depression.

Why? Because they had neither the courage nor the audacity to confront Wall Street's ultimate nightmare: A collapse in the giant mountain of derivatives.

Derivatives are essentially bets on interest rates, foreign currencies, stocks or specific events like the bankruptcy of a particular company. The interest rate-related bets are by far the biggest. But the bets on bankruptcies - called credit default swaps - are the fastest growing and the most volatile.

These derivatives were originally designed to help hedge investments reduce risk - like insurance policies. But in practice, they've been increasingly used to leverage investments, increasing the risks of participants.

Sorry, to burst your bubble, but the Dow is no longer a good indicator. It is unbalanced in favor of oil/pharma since Rupert Murdoch took it over. Stick with S&P as a better indicator.

While Americans are side tracked with useless entertainment and the Palin pig and lipstick show....
...the elite is silently ripping apart our financial system.

"Pay no attention to the man behind the curtain."

I suprised the shrubberer-in-chief did not tell America to go shopping...ala 9/11...nothing to see here you consumers...

You're right that the S&P 500 is a better index because it is more diversified, but it is untrue that Murdoph has caused the DJIA to be unbalanced in favor of oil and pharma. The two additions to the Dow since Murdoch took over are Bank of America and Chevron. Even with the addition of Chevron, the Dow still has a lower weighting of oil stocks than the S&P. The Dow gives more weight to pharma stocks than the S&P by about 2.5%, but the last pharma stock added to the Dow was Pfizer in 2004, before Murdoch took over.

Damn, I'm good! From 20 min after opening bell today.