Market tries to take stock of weekend events

Good Morning. The markets are just trying to take stock after another tumultuous weekend saw Lehman Bros unable to secure any last minute funding and entering Chapter 11. The fall-out isn’t just confined to Lehmans as Washington Mutual and AIG are also struggling with funding and Merrill Lynch agrees to a takeover from Bank of America. Hurricane Ike although it gave Houston a major battering, spared the Texan Oil refineries and now trades below $100. In Europe, the problems surround Italy’s national air carrier Alitalia, which faces stranding thousands of passengers as it cannot afford to buy any more fuel. Overnight the Dollar lost significant ground against the Euro, trading as high as 1.4480, before retreating back to the 1.4320 level we see now. Look for calls for a Fed rate cut to intensify, but the impact of recent Fed funds cut has not been passed on, so the effect would be limited.