This from a “30year veteran of the bond market. My career began at the Open Market Desk of the Federal Reserve Bank of New York and the significant majority of the subsequent years were spent trading (Treasuries) or selling high grade fixed income product for some of the largest primary dealer firms”
The situation is grim:
Endgame?, by Tim Duy: News is flowing in faster than the ability to process the implications. When I went to bed Saturday night, the only sure thing looked like the liquidation of Lehman Monday morning. A scant 24 hours later, to that liquidation is added the sale of Merrill Lynch to Bank of America and, later the possibility of a collapse of AIG by midweek. The Fed and Treasury suddenly play hardball, and the floodgates break open.
Bankwatch 
Colin,
Do you remember your physics lesson from school?
“Matter cannot be created nor destroyed; only changed.”
Matter, in this case, is consumer money. For changed, read “moved around”.
I feel that the major players “the money movers” within the current market are in danger, not the entire economy. The money’s not going away.
After all, remember the old saying “a bank has no assets, only those of its customers. It takes its customer’s assets, charges to keep them and then charges again if you want to borrow them sometime.”
What is still there are customers assets.
Maybe we are witnessing the death of the Old Way; maybe what this will pave the way for is a whole new way of dealing with the New Economy.
After all its only money. And that is indestructable.
PS: I tried to post before with Firefox and somehow the site wouldn’t allow it. I’m not that controversial am I? 🙂
@Neil … Firefox shouldn’t be a problem … weird.
Anyhow to your point, I totally agree about money just moving around. We saw this in the 70’s during the petrodollar crisis. What it does do in the meantime is create short term losses and gains. However I am less concerned with that, than I am with the Banking model, which I believe has lost its connection to its roots.