In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

I seem to remember saying something like this was going to happen a while back. If people thought the current recession hurt, wait until this gets stacked on.

The demise of the dollar - Business News, Business - The Independent

For those to whom this is merely a lot of mumbo-jumbo, let me explain in layman's terms:
AIG, knowing it would need to ask for much more capital from the Treasury imminently, decided to throw in the towel, and gifted major bank counter-parties with trades which were egregiously profitable to the banks, and even more egregiously money losing to the U.S. taxpayers, who had to dump more and more cash into AIG, without having the U.S. Treasury Secretary Tim Geithner disclose the real extent of this, for lack of a better word, fraudulent scam.

How the melt down actually works (and why Citi reported a profit last quarter), in relatively simple terms.

AIG Was Responsible For The Banks' January & February Profitability

While the American International Group comes under fire from Congress over executive bonuses, it is quietly fighting the federal government for the return of $306 million in tax payments, some related to deals that were conducted through offshore tax havens.

I believe Jon Stewart said it best, "FUCK YOU!"

A.I.G. Sues Government for Return of $306 Million in Tax Payments - NYTimes.com

Chrysler LLC announced late Wednesday that it is stopping all vehicle production in the United States for at least a month.

All 30 of the carmaker's plants will close after the last shift on Friday, and employees will not be asked to return to work before Jan. 19.

wow...

Chrysler shuts down all production - Dec. 17, 2008

Many of their suppliers are teetering on the verge of bankruptcy themselves, and do not have the luxury of extending credit much longer.

“I don’t think that suppliers will be able to get through the month without continued payments on their receivables,” said Neil De Koker, chief executive of the Original Equipment Suppliers Association in Troy, Mich., a trade group.

When suppliers big and small start failing, the flow of parts to every automaker in the country will be disrupted because as suppliers typically sell their products to both American and foreign brands with plants in the United States.

The domino theory is incorrect. The correct analogy is house of cards, lose any of them, and the whole thing comes down.

Auto Suppliers Share Anxiety Over a Bailout - NYTimes.com

In pressing the bank executives to accept partial government ownership, Paulson's message was clear: Though officially the program was voluntary, the banks had little choice in the matter. In exchange for giving the Treasury minority stakes, the nine firms would jointly receive an investment worth $125 billion. The government would make another $125 billion available for the next 30 days to thousands of other banks and thrifts across the country. null

This is potentially good, but also potentially dangerous. The government stake is good, in that it can be used to block banks from doing things that are insane (credit default swaps anyone?). The government stake is dangerous in the sense that it may now be in a position to force banks to do incredibly stupid things (credit default swaps or massive sub-prime secondary loans?). The next step is still anyone's game.

U.S. Forces Nine Major Banks To Accept Partial Nationalization - washingtonpost.com

So the final results from the Lehman Brothers CDS auction are in, and they're even uglier than expected. Finally price is 8.625 cents on the dollar.

Things are even worse than expected...

Lehman CDS Wipeout

"Investors are just saying, get me out at any price."

That sentence is literally, the start of the run. What happens next is anyone's guess, but here are my guesses for the next week.

Friday the 10th - 300 point rally as some people decide to get back in, and think they're seeing bargains.
Monday - Another 5-600 point nosedive as people have the weekend to find out how horribly they're still exposed.
Tuesday - The DOW dips below 8000, but finishes above for the day.
Wednesday - Panic.

Dow plunges 679 to fall to lowest level in 5 years: Financial News - Yahoo! Finance

Stocks slumped fast and hard on Thursday afternoon - with the Dow falling below 9,000 - as reports that Treasury's may buy stakes in banks failed to reassure investors amid the ongoing credit crisis.

1-800-RUN is on.

CNNMoney.com Market Report - Oct. 9, 2008

That gave GM a market capitalization of $4.3 billion - chump change for this industrial behemoth - while Ford stood only slightly better at $6.6 billion.

The stock selloff effectively puts these companies on death watch and it is easy to see why.

This would be part of why no one is willing to float anymore loans to them and they had to get a $25 billion bailout last month.

The GM, Ford death watch - Oct. 9, 2008