Today's The Day

The Wall Street bears have their picnic.

This is it, folks. This is the tsunami. Just remember who brought it to you: Bush, Blair and Howard.

ABC: Wall street "on the brink".

The Guardian: Wall Street's "model" is "broken".

The future of Wall Street is up for grabs -- and changing by the minute.

CNN: Wall Street's troubles are yours too:

The sale of Merrill and demise of Lehman would reduce the number of independent firms on Wall Street to two - Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) - from five at the beginning of the year.

Remember, Goldman Sachs is the Bush gang's banker of choice. But even they are now looking shaky:

Analysts also question whether No. 1 investment bank Goldman Sachs Group , which has avoided major damage so far and earlier this year considered acquiring a commercial bank to reduce reliance on market funding, can confidently stand above the crowd.
Goldman, which releases its third quarter results Tuesday, is widely expected to report lower profit with revenues down across the board.

As Atrios notes that the 18th largest company in the world, American International Group (AIG), is also on the brink of collapse if the Fed doesn't prop it up:

We're All Communists Now

And:

It's all blowing up.

Exciting!!

WHEEEEEEEEEEEEEE

Alan "Don't Look At Me" Greenspan:

"There's no question that this is in the process of outstripping anything I've seen and it still is not resolved and still has a way to go and, indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes. That will induce a series of events around the globe which will stabilize the system."

He adds that the USA cannot afford McCain's tax plans.

Meanwhile, back on Wall Street:

I'm standing outside Lehman Brothers (LEH, Fortune 500) headquarters on 7th Ave and 50th street in New York City watching Lehman Brothers die.

Employees, some in suits, others in casual clothes, are filing out with all they can carry as time runs out.

They are walking down the sidewalk past police barricades as scores of New Yorkers and tourists gawk...

How did it come to this? Prof Q tries to tease out some answers:

My candidate answers:

(1) A big chunk of income goes to the top 1 per cent of households and isn’t captured by the survey. The seminar gave some support to this idea, at least insofar as this group seems to have a big enough share of the total that the choice of the point where the Census Bureau stops measuring income makes a big difference.

(2) A lot of income is flowing to the corporate sector and never being recorded as household income, perhaps because it is distributed in the form of capital gains, which aren’t counted. Again, a very large chunk of these would go to the top 1 per cent.

Anyway, here's the cunning plan on which the future of the Western world depends:

Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, and UBS, said in a joint statement they "initiated a series of actions to help enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets."

They agreed to create a "collateralized borrowing facility" of 70 billion US dollars, with each bank contributing seven billion US dollars, to help ease access to credit...

The 10 banks would be able to tap this facility, with any bank eligible for up to one-third of the fund. The amount may be expanded if more banks join the program.

What could possibly go wrong?