Oil is near $99. 00 after Houston’s refineries were mostly undamaged by Hurricane Ike. The markets have dodged one bullet, but the bigger issue on Monday will be the fate of Lehman. Barclays has dropped its interest after failing to secure guarantees from the US government along the lines of Bear Stearns/ JP Morgan. It has been a long time since the market has had to deal with a big firm being wound down, a fate that could await Lehman.
It is poetic justice that AIG is facing difficulty at the moment as they took on a big group of Drexel Burnham operations, becoming a big trading house in the process. New York bankers are being called into the office to deal with the potential fallout from the Lehman and Hurricane situations. It could be an interesting session.
