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It looks like we’re headed for liquidation. Nobody has any idea what this really means or how this will play out in the derivative markets.

Just a little more context for the brewing Lehman situation.

Ah, heck, I go to all the trouble to write up my thoughts, and then the WSJ puts out an article that I could have simply posted instead.

The Lehman Bros. talks have not yet resulted in a solution.  A rabbit had better be pulled out of the hat prior to the open of the Asian markets, or there are going to be some additional management problems inserted into the mix.

Here’s my read on this fast-developing situation.

This weekend, financial and government officials are furiously seeking a solution to the bankruptcy of Lehman Brothers, and, I would suspect, Washington Mutual.

The financial crisis is now officially at the dangerous stage, where any slight miscalculation or misstatement could send the markets into crash mode.  This deserves your very highest attention.

There is some confusion about what constitutes the federal deficit.  Below I explain the differences between what is reported and what is really happening.  

I happen to fully believe that our
markets are being largely influenced by official acts, both overt and
covert.  My logic is simple; where motive and opportunity co-exist, the
burden of proof shifts to the accused. 

The Central Banks and the Treasury
had a powerful set of motives to shift money away from commodity hedge
funds and into the stricken banking system.  Their opportunity is both
well characterized and self-evident, so I won’t go into that here.

The stock price of Washington Mutual (WM) is down another 25% this morning, at well under $3/shr.

There is no way for this company to raise capital, and therefore no way for this company to survive without a bailout. This company is toast. Time to write the obituary.

I am expecting FDIC receivership any day now, perhaps this weekend?  Who knows.