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Monday, September 15

As Hurricane Ike moves out, Hurricane Lehman Brothers roars in

The good news is that the Texas Gulf refineries escaped the worst of the flooding from Ike. The bad news is that emergency generators don't provide enough power to refine oil and that parts of the electricity grid took a bad hit in the storm. Also see Mineweb's energy bulletin for an update on the Gulf oil recovery situation.

But now we have to deal with another kind of storm. From John Batchelor's website:
Spoke to a London morning radio station as I got off air on Sunday 14/Monday 15 and answered questions re the crisis on Wall Street with the spiral of Lehman, the sale of Merrill, the panhandling of AIG, the whispering run on WAMU, the buzz of a fire sale in the morning as Lehman dumps its assets on illiquid markets.

There was so much bad news that I could not concentrate on the really bad news, which is that we are watching a Black Swan on the Hudson. American is not going in a bad direction -- America has reached the bad place.

On Sunday 14, Larry Kudlow was not sanguine; Jim McTague [Barron's Financial Weekly, Washington Editor] did not jest; no comment was made that found a silver lining, nor a lead lining.

Twenty-five thousand people at Lehman are out of work, and there are snapshots ... of men and women with mortgages and families clearing out desks and going home to a radical reduction in earning power. The sixty thousand at Merrill will now negotiate for a future with the Bank of America. And there is collateral damage of the housing market itself.

Looking for a multimillion dollar home in Westchester, marked down? [...]
For more on the situation, see Bloomberg's update.
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