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[AnderL]

The talk is that the Bailout was a generated event that would force teh settlement of all the CDSs out there. LEH CDSs settled today, there are trillions there and the bill is due on the 22nd.

So banks are refusing to lend to each other not because of trust issues but because they are trying to hoard cash for the settlement. You know counterparties. They have been liquidating everythign to get the cash on hand for this event.

LEH wasn't going to be bought out because they were one of the biggest offenders, and then needed a firm to implode so they can get those CDs to settle. Otherwise who would be willing to put their own up. I think that meeting over the weekend some time back when Barclays, JP Morgan and Lehman wasn't to buy LEH or bail them out but to let them know that they are going up on the chopping block. It would also explain why the CEO was pissed at the hearing and why he is blaming everyone. I was a dick but they picked his firm and his reputation to ruin. He did take a lot of risk, the most. Stuck his neck out and got the axe.