From the NY Times:
Make no mistake. It's not over. But we'll take good (or even "less bad") news when we can get it.Hundreds of traders who placed bets on Lehman Brothers' creditworthiness before it went bankrupt have settled their positions "without incident," according to a company that tracks derivatives contracts.
The company, Depository Trust & Clearing Corporation, processes large numbers of investment transactions. It said that only $5.2 billion had to change hands for all the traders to close out their positions, a much smaller amount than had been predicted a week ago.
The settlement process had been seen as a major test of the market for credit-default swaps, and whether it could handle the unprecedented stress of a big Wall Street firm going bankrupt. The overall system appears to have borne the shock successfully, although individual firms might have taken painful losses they have not yet disclosed.
That sort of deals with the argument made by some that the market drop last week was because of the unsettled Lehman paper.
Yes. Specifically, it discredits that argument.
As if trying to explain each day's hundred point swings was a productive activity to begin with.