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I doubt it, as the apparent action NOT to bailout Lehman’s is actually a panic move, under normal circumstances the US Treasury and Fed WOULD bailout Lehman’s but the in the current climate of the likelihood that the US government will have to start bailing out other distressed industries in some shape or form such as airlines, insurers and auto manufacturers, though probably not going so far as to nationalize them but rather to make huge loans available to corporations much as the Japanese government did during the early 1990’s which resulted in Japans Great Depression.

Already it is being reported that Bank of America is eagerly sniffing around Merrill Lynch as a better candidate to takeover following Lehman’s bankruptcy, will they get a sweetener form the US Fed?, despite announcements of no tax payers money, they probably will.

Whilst the focus is on the US, the bailouts and unprecedented loans being made available to financial intuitions is not just limited to the US Fed, Central banks right across the globe will be flooding the markets Monday in an attempt to prevent a cascade of failures amongst banks that have already lost their capital bases over the last 12 months and therefore are teetering over the edge.

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The financial sector continues to be buffeted. However you get your news -television, car radio, computer, newspaper - several stories seem to be standing out (besides the obvious and very real trauma suffered by those in Texas in the wake of a terrible hurricane). Former giants in the financial sector are collapsing or struggling to hang on.

The latest casualty? Lehman Brothers folded and Merrill Lynch is being bought by Bank of America, noted here in the New York Times: www.nytimes.com/2008/09/16/business/worldbusiness/16markets.html along with the fact that stocks took a rapid downward turn,fueling talk of a Black Monday.

Since Lehman Brothers has been around for so very long (158 years), the news of the firm’s demise was a huge shock to many, particularly the info (which could change at any moment, though it doesn’t seem likely) that there won’t be a government rescue of the company, no last minute reprieve or intervention as there was with Fannie Mae and Freddie Mac.

Black Monday and stock market crash fears increase as Lehman Brothers goes under…

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Lehman says it will go into Chapter 11. CEO Richard Fuld will almost certainly end up being loathed more than the heads of Drexel, Long-Term Capital Management, or any of the firms that failed in the S&L crisis. His mark as a symbol of Wall Street’s monumental greed and stupidity will live long after he is gone.

Outside New York and the global financial community, Fuld has less name recognition than the giant panda, Yang Yang, in the Atlanta zoo.

More at issue than Fuld’s legacy is that U.S. taxpayers will bear the burden of the failure of his company and other financial firms, not just in the next year but over time. The Treasury may get money to cover the bill by pushing the deficit higher and borrowing money by selling bonds – most of which will be snapped up by China. The IRS will want its pound of flesh at some point. That money may come from the pocket of the working man, or, in the future, from payroll deductions of his children.

It is a shame that Henry Paulson and Ben Bernanke are the only people with a “vote” when it comes to spending the government’s money on emergency funds for banks. In reality, that money may not be paid back. More bank failures are likely. Some pessimists, including NYU economics professor Nouriel Roubini and Wilbur Ross, see that number going as high as 1,000. The FDIC does not have the capital to handle that level of depositor obligations.

More at MSN.

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Wreckage from a massive crisis on Wall Street could prompt the Federal Reserve to do an about face and once again cut a key interest rate this week or possibly later this year, economists said Monday.

Just a few days ago, a rate cut appeared largely off the table. Now it has emerged as a possibility as the Fed prepares to meet Tuesday against a backdrop of historic upheaval in the U.S. financial system.

Lehman Brothers Holdings Inc., the country’s fourth-largest investment firm, filed for bankruptcy protection on Monday. And, Bank of America is buying Merrill Lynch in a $50 billion deal.

“It puts a Fed rate cut back on the table,” said Stuart Hoffman, chief economist at PNC Financial Services Group.

Seeking to calm frazzled markets, President Bush assured the country his administration is “working to reduce disruptions and minimize the impact of these developments on the broader economy.”

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