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[cattitude]

Back in 1993 I was working as a programmer for Prebon Yamane, then one of the world's leading wholesale currency brokerages. The head of the swaps desk (whose name I can't remember now, which shows why I'm not a broker) gave a series of talks on the underlying structure of the swaps and derivatives market. He was a pretty cool guy, and the only

Comments

[tedesson]

Well, there have been months of indications leading up to this.

The whole derivatives market, which is many many times larger than the stock and bond markets combined, is built on the sort of trust which is broken when one of the counterparties goes bankrupt or starts wrapping up dodgy loans in pretty packages.

We're going to be paying for this mess for a very long time.

[catelynn]

My cousin who works in finance told me last August(07) that Lehman was going down; they were known then as being shaky.
Also, Bear Sterns apparently made a lot of enemies when a bailout was needed for another company years ago and they would not help. So when it came their turn, everyone returned the favor.
Also, a lot of the rules that were in place in 1993 that did offer some protection have been repealed.