****BREAKING NEWS****BREAKING NEWS**** "...the unthinkable is thinkable..." BBC reports Lehman Holdings Inc to go into bankruptcy; Merrill Lynch sold; AIG to re-structure; Goldman Sachs and Morgan Stanley to report declines in quarterly profits; future of WaMu in doubt; experts fear short trades; global financial leaders set up emergency fund to prevent worldwide collapse; Wall Street said to be "FRANTIC"

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REUTERS is reporting that an "extremely... rare" trading session opened this afternoon between 2:00 PM and 4:00 PM ET to allow Wall Street dealers in the derivatives market to reduce their exposure ahead of an apparent bankruptcy filing by Lehman Brothers Holdings, Inc. (NYSE: LEH). The BBC is reporting that Lehman Brothers is "set to go into insolvency."

The $455 trillion derivatives market is vulnerable to collapse should the anticipated bankruptcy filing by Lehman, the country's fourth largest investment house, materialize late Sunday or Monday morning.

A Google search by a reporter could not identify a previous occasion when an emergency trading session had been conducted on a Sunday.

The International Swaps and Derivatives Association (ISDA), according to REUTERS, announced "[t]rading involved credit, equity, rates, foreign exchange and commodity derivatives."

The ISDA, REUTERS reported, "...confirmed a 'netting trading session' was taking place for over-the-counter derivatives, in which trades that offset each other are settled."

REUTERS quoted Mohamed El-Erian, the CEO of PIMCO, the biggest global bond fund, saying, "This is an extremely, and I stress extremely, rare event. It also speaks to the more general notion that, in today's highly disrupted financial markets, the unthinkable is thinkable."

Concern over Lehman Brothers status began peaking last week after the company's stock lost 80% of its value following volatile trading on the market.

At 6PM on Friday evening, Timothy F. Geithner, President of the New York Federal Reserve Bank, Treasury Secretary, Henry Paulson; SEC Chair Christopher Cox, and CEOs from major Wall Street financial firms, including James Dimon (JP Morgan), John Mack (Morgan Stanley), Lloyd Blankfein (Goldman Sachs), Vikram Pandit (CitiGroup), John Thain (Merrill Lynch), and representatives from the Royal Bank of Scotland and the Bank of New York Mellon met in an emergency meeting in Lower Manhattan to discuss Lehman's fate and to try to stave off the firm's collapse and liquidation.

Conspicuously absent from the talks was Richard S. Fuld, Jr., Chairman and Chief Executive Officer of Lehman, who just last week stated that the investment bank was well-funded and its assets were undervalued.

Various officials continued meeting into the weekend, on both Saturday and Sunday, to attempt to negotiate either a sale of Lehman's or a potential buy-out by a consortium of large financial firms. Those talks have apparently failed leaving the question of the fate of Lehman Brothers Holdings, and the world's financial markets, in doubt.

On Saturday, Germany's Finance Minister, Peer Steinbruek, expressed sharp concern about Lehman's status before a meeting of EU finance ministers in Nice, France. Germany is the European Union's largest economy.

European worries over the health of the US economy stemmed from the prevailing view that "[m]any countries in the euro-zone are sliding toward recession -- that at least is the forecast of the European Commission," Der Spiegel online noted last Wednesday. To the extent that American problems spill over into the global financial system, European economies are negatively impacted.

The BBC reported Saturday that top financial experts in the UK were also expressing concern over the health of the US economy given the precipitous 80% drop in the stock of the US's fourth largest investment house, Lehman Brothers, last week.

Barclays PLC, headquartered in London, had appeared, earlier in the weekend, to be a top contender to buy at least part of Lehman Brothers, if a deal was reached splitting the investment behemoth into parts: a more palatable "good bank" that Barclays would have presumably purchased, and a "bad bank" that would have been propped up by a collection of Wall Street investment houses. But Barclays left the negotiations table on Sunday without a deal.

Barclay's reluctance to buy even a healthy slice of Lehman's pie without substantial guarantees from the Bush Administration, a posture Treasury Secretary Henry Paulson did not want to assume, may be due to a downgrade in economic expectations in the UK.  Scotsman.com reported on September 15th that British "...business leaders today joined the voices forecasting a recession in the UK economy and demanded a half-point cut in interest rates to help revive growth."

In other developments on late Sunday afternoon indicative of a general financial meltdown, American International Group, or AIG, is nearing some agreement on a major re-structuring plan, according to the NYT, that will include the sale of its aircraft leasing operation and other business units. AIG lost 79% of its value in market trading last week and reportedly has billions of dollars in losses.

Bank of America is also reporting early Sunday evening that it is in talks to purchase Merrill Lynch (NYSE: MER). The company founded in 1914 by Charles E. Merrill occupies all 34 floors of Four World Financial Center in Manhattan. In November of last year, Merrill Lynch announced the write-down of $8.4 billion in loss connected to the American mortgage crisis, and removed Stan O'Neal as CEO.

The bursting housing bubble may not be confined just to the United States: The Australian online reported Monday, September 15, 2008 that "[h]ome building starts have plummeted to their lowest number in a year"....in Australia. "Just 38,348 homes were started in the three months to June, a seasonally-adjusted drop of 3.7 per cent on the March quarter, the Australian Bureau of Statistics said." Shares headed downward on the Sydney All Ordinaries at the opening of trading on Monday.

The financial titans Goldman Sachs Group, Inc. and Morgan Stanley are expected to announce declines in quarterly profits this week according to another news item by the AP.

In an unbelievable deluge of breaking financial news on Sunday evening, other developments, such as the forecast for savings-and-loan giant Washington Mutual remained clouded.

Financial experts expressed further concern on Sunday evening that some traders might take advantage of a "climate of fear" to engage in short selling in an effort to take over other large, vulnerable firms according to a report by Louise Story of the NYT.  Sources noted that some executives pleaded with Paulson, Geithner, and Cox to restore restrictive rules on short selling to minimize hostile overtures when markets resume trading on Monday morning.

REUTERS was reporting just before 8 PM ET that a group of American and foreign bankers were in discussions to create an international fund of as much as $50 billion to shore up the global financial system in light of the troubling economic indicators coming out of the United States. US government officials also were said to be amenable to widening the Federal Reserve's discount lending window to forestall, at least temporarily, further systemic failures.

Authors Website: http://www.blogger.com/profile/4236373

Authors Bio:
Constance Lavender is an HIV-Positive pseudonymous freelance e-journalist from a little isle off the coast of Jersey; New Jersey, that is...

In the Best spirit of Silence Dogood and Benj. Franklin, Ms. Lavender believes that a free country is premised on a free press.