Street Speculator

Last week was horrible. The stock market fell on every trading day, once falling over 500 points.

But, wait until the market opens after Columbus Day. The SPECs think the market will tumble more, with the DOW going under 7,000 points.

Our Rationale: The Credit Default Swaps payment on Lehman Brothers debt are due. It is estimated that the “issuers” of the Lehman Brothers Credit Default Swaps are on the hook for between $400 thru $600 billion. The problem is that the issuers of these CDS’s are not yet known. They can be anyone from AIG and Morgan Stanley to the various Hedge Funds and other asset management organizations..

We think that these issuers will have to sell assets (Including stocks) to settle the claims. Everyone knows that most of the companies issuing the CDS’s were undercapitalized, but got greedy in taking the million dollar premiums. There were no fundamentals attached. The Credit Default Swap saga will consume the media like the former ENRON once did.