Lehman Controlled Demolition

source: Satyajit Das

As we approach Friday 10/10/2008, it is becoming increasingly clear that the 'failure' of Lehman (orchestrated by JP Morgan and the Federal Reserve) represents a controlled demolition of the Credit Default Swap market. The impacts will be on the order of $400 billion, possibly higher, which is more than enough to infect the entire global financial system, including bond and currency markets.


WMD wiring diagram. Yield approx 600kiloton of tinfoil.
source: Satyajit Das

Tomorrow will be a watershed event, probably 'lock limit down' to quote Mish. I really hope I am wrong but with Lehman debt trading at 10c on the dollar someone is going to have to cough up hundreds of billion$ of dollars, and my crystal ball says they don't have the dough.. Thus, this ensures forced selling which begets more selling, ad infinitum, until the USTbond complex/USD craters and makes its final swan dive towards zero.

Expect eventual riots, civil disturbances, probably more false flag terror attacks, as these social reprobrates at the central banks begin the final implosion of the US economy.

NEW YORK, Oct 9 (Reuters) - Banks, hedge funds and other sellers of protection on Lehman Brothers' (LEN.N: Quote, Profile, Research, Stock Buzz) (LEHMQ.PK: Quote, Profile, Research, Stock Buzz) debt are facing losses in the area of 90 percent the insurance sold when the value of the failed bank's credit default swaps are settled in an auction on Friday.

If sellers of protection outweigh buyers in the auction, as some analysts expect, losses may be even higher.

Lehman's bankruptcy filing last month sent its bond values plunging as the majority of the investment banking assets that had supported the debt were purchased by Barclays Bank, leaving debt holders at the abandoned holding company with little to reclaim.

The auction to settle credit default swaps protecting the debt will be one of the largest settlements of contracts in the $55 trillion market, with around $400 billion in contract volumes estimated on Lehman's debt.

http://www.reuters.com/article/bondsNews/idUSN0932589620081009

In other words, the orchestrated failure of Lehman has ensured absolute contagion. This is the beginning of the end in the sense. The United States is about to become a failed Third World state. Leadership of the New World Order will be 'handed off' to Russia and China as we make the final move towards global fascist dictatorship.

Now is the time to get food, water, medicine, gasoline, ammunition, and precious metals (if you can still find them). Oh, and don't forget to purchase your aluminum foil. For hats and radio signals or wahtever.


Hank Paulson needs to borrow like... $700billion. He's good for it. Seriously.