Banks may accelerate efforts to move trading in the $62 trillion market through a central clearinghouse or to
credit-default swaps an exchange after the bankruptcy of Lehman Brothers Holdings Inc. and the credit downgrade of American International Group Inc.

Yes that is right... 62 Trillion..we are in a terrible mess..and this might just be the tip of the iceberg...

Lehman, the first major market-maker to go bankrupt in the decade-long history of the privately negotiated, unregulated business, may leave behind billions of dollars in potential losses for trading partners.

Banks do not trust each other.. Banks are hoarding cash... No one knows exactly how much because there's no central exchange or system for recording trades.

There is no counter party accountability...

The fact that no one can tell you the notional value of derivatives contracts Lehman has written the day after a bankruptcy is a scary thing, There is not a way to determine these valuations... It's an operational nightmare and a legal nightmare of interpreting what each contract says.


Today all eyes are on AIG... tomorrow where will all the eyes be?



Andrew Abraham

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