• 1,630 green canvas duffle bags with Lehman ribbon
• 353 green compact golf umbrellas
• 75 Waterford Marquis Treviso crystal clocks
• 682 white Lehman coffee mugs
• 130 Swiss Army pens
• English beechwood-lined sterling silver box from 1902
• 200 Lehman conference pens
• 12 pairs of Links of London cufflinks
• 24 Screwpull wine openers inscribed "LB"
• 24 Titleist PRO VI golf balls inscribed "LB"
• 30 girl Teddy Bears
• 18 large, ivory womens' F&G stretch snap shirts
• 1 Tiffany shooting star
  

It's a massive undertaking – that is, the liquidation of Lehman Brothers Holdings Inc. Over a hundred years, the company has assembled a wide assortment of global assets and investments. Although, as the firm tries to unload these – in a harsh environment – there are likely to be some lucky buyers.

And, according to a piece in the Wall Street Journal (subscription only), it looks like Lehman is in the process of spinning off its VC arm, which has about $750 million in assets.

• Corporate bankruptcies -- Experts are predicting one of the biggest waves of corporate bankruptcies and restructurings in years. Already, Circuit City Stores Inc. (OTC: CCTYQ) has bitten the dust and the year is just getting started. Loads of retailers who are already operating on the razor's edge of profitability may be pushed over the edge. I doubt that enough credit will be unlocked by government fiat to address this problem.

Thanks to what former Enron CEO, Jeff Skilling, called bad "optics", some top Wall Street executives announced that they're foregoing their normal seven figure bonuses. But I think I am being generous in estimating that those potentially symbolic gestures will only shave a few billion off the Wall Street bonus pool for 2008. We could still be paying $20 billion in bonuses this year.

How so? After buying $159 billion worth of preferred stock in 24 banks, I have not seen any evidence that the Treasury required the banks to lend it out. There is nothing stopping the banks from using the money for paying bonuses. And while the original estimate of 2008 bonuses was down 20% from 2007 -- to $26.6 billion -- I am thinking that eliminating executive bonuses could lead to at least a $6 billion lower figure -- particularly if this cut provides bank CEOs leverage to reduce the amount of bonuses paid to lower level people.

So far, top executives from Goldman Sachs (NYSE: GS), UBS AG (NYSE: UBS), Deutsche Bank, and Barclays have said they will skip their bonuses for 2008. Ironically, the ethically challenged UBS has the most interesting idea -- starting in 2009, it will be able to claw back bonuses in the years after their award with a third paid immediately, while the remainder will be put into a participant's account and can be reduced if there is a loss at the division or the whole bank. I started proposing an escrow account along these lines in October 2007.

In light of the failures like Lehman Brothers, the talk is that the investment-banking model is essentially broken. As a result, Goldman Sachs Group, Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) are now crusty-old bank holding companies.

But, there are still some investment banks left -- such as Lazard Ltd. (NYSE: LAZ). For the most part, the firm has weathered the financial storm pretty well. However, Q3 was still rough for Lazard; there was a net loss of $77 million or $1.17 per share (which compares to a profit of $40.3 million or $0.73 per share in the same period last year). Yes, you can blame the market instability as well as some purchases of the asset management business. Keep in mind that Lazard was a prime broker with Lehman.

For the most part, Lazard remains focused on advisory services, especially in M&A. And, the firm keeps snagging marquee deals, like the transactions for Gaz de France and Fortis NV. Unfortunately, with the credit crunch, it's becoming extremely difficult to finance acquisitions. It looks like Lazard may show continued weakness for awhile.

Although, one bright spot is M&A in the financial services industry. With the injection of billions in federal investments, it looks like we will see a pick-up in dealmaking in the sector.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

Collateralized Debt Obligations (CDOs) -- those fiendishly complex securities that slice bonds into different groups based on risk -- are a $1.3 trillion pile of toxic waste likely to be written down 90% from financial institutions' (FIs) books. That's a shame because so far FIs have written off $660 billion worth of subprime mortgages and mortgage-backed securities (MBS) and that total is expected to top $2 trillion before it's all over. That is way more than the $340 billion in capital that resides on FIs books.

Since there is very little information about CDOs available, it is difficult to both put a value on them and to know how bad the damage is. One firm estimates that $254 billion of CDOs tied to subprime mortgages have defaulted. But corporate CDOs are privately traded, so the damage from writing down this toxic waste is difficult to quantify. These corporate CDOs were called synthetic -- they consisted of bundles of Credit Default Swaps (CDSs) on corporate bonds.

The $54 trillion CDS market -- famously deregulated by John McCain's chief economic advisor Phil "Americans are Whiners" Gramm -- is now causing shudders for owners of synthetic CDOs since they are tied to the bankruptcy of Lehman Brothers along with Iceland's biggest banks. Fitch downgraded 422 classes of CDOs on October 13 after seven financial companies defaulted or were bailed out since September. And Barclays estimates that 70% of synthetic CDOs were tied to Lehman Brothers.

The financial crisis is not over. If things were back to normal, banks would be lending to each other and to businesses and individuals. But measures of bank lending risk suggest fear is 12 times as high as it would be in normal times. The reason? Banks know more than you do about what's wrong. And they're not talking about it because they don't want you to withdraw your deposits and sell your stock. What they know is that on October 21st, some of the biggest players on Wall Street could be required to come up with $400 billion that some may not be able to pay.

Last month, the White House decided that we could afford to let Lehman Brothers file for bankruptcy. That proved to be an enormous mistake. It triggered a run on money market funds because one of the oldest such funds, Reserve Primary, broke the buck since it held Lehman Brothers paper. The U.S. responded with a $50 billion guarantee of money market funds. But the biggest consequence of that mistake is in the $54.6 trillion market for Credit Default Swaps (CDSs).

A CDS is like selling insurance on your car to hundreds of people who don't own it -- yet if your car goes up in flames each of those people collects the full value of your car. More specifically, CDSs are insurance against a bond or loan default. Why are CDSs so dangerous? Three reasons: a CDS seller does not need to put any capital aside to cover losses if the security defaults, the buyer doesn't need to own the asset it wants to protect, and there is no central place where information about all these CDS deals is collected and updated.

The banking system has been crumbling for over a year, but last month's collapse of American International Group (NYSE: AIG) -- which prompted an $85 billion government takeover -- suggests that insurance is not immune from the problems. As a reminder, AIG got snared in the $62 trillion Credit Default Swap (CDS) market whose growth was spurred by McCain advisor, Phil "Americans are Whiners" Gramm.

And as insurance crumbles, banks keep suffering. Bank of America (NYSE: BAC) and National City Corp. (NYSE: NCC) are both hurting. How much?

• Bank of America's earnings plunged 68% to $1.18 billion, or $0.15/share -- missing by 60% analysts' forecast of 62 cents. Bank of America will raise capital by selling $10 billion of common stock and slashing its dividend in half from 64 cents to 32 cents. One analyst cut the bank's 2009 earnings estimate to $2.50 per share from $3 per share -- this is well below the $3.12 per share from a Thomson Reuters analyst poll -- and lowered his price target by $2 to $26.

• National City Corp. and its National City Bank both suffered debt downgrades from Fitch. For instance, Fitch slashed the bank subsidiary's long and short-term Issuer Default Ratings (IDR) to A- from A. And it lowered the bank and holding company's Individual rating to C from B.

How many billions are Paulson and Bernanke asking for? Seven hundred billion dollars. Now that's real money! And the administration is touting this new program as if they knew what they were talking about.

We have heard folks wondering how and why Treasury Secretary Paulson should be given the power and discretion to do as he sees fit with this bailout money.

We have heard people speaking about the pain and the injustice, along with the doubts and reservations about the concept of giving away so much money.

Actually giving this handout to companies that have demonstrated such corrupt thinking and irresponsibility (see SEC opens the gates and the world drowns) is a supreme injustice given that their decisions led to the collapse of once-mighty financial industry titans. See Lehman Bros 158-year sad ending for just one example.

Has anyone asked how the Treasury came up with that number? Can someone explain the difference between $700 billion and a blank check?