Still Not Breathing Easily

I've got a feature over on the main Portfolio.com site today, which is basically an expansion of my blog entry from yesterday on when we can start breathing again. It even gets a bit wonky -- I look not only the TED spread, but also at T-bond fails-to-deliver.

I conclude pessimistically:

The biggest and most obvious risk of all is the one associated with Lehman's own debt, which is now trading at less than 35 cents on the dollar. That's a big loss for the institutions holding it--but it also means an unknowably huge loss for anybody who wrote credit protection on Lehman Brothers at any point over the past five years. Those sellers of credit protection are staring down the barrel of billions of dollars in claims, and they're going to have to raise that money quick, by selling anything they can get their hands on--and that might well include stocks.
So you think that we've dodged a bullet with the Dow still above 11,000? Just wait. This thing ain't over yet. In fact, it's barely begun.