In other news, Lehman is all the talk this morning on CNBC.  I won’t go into the details, but suffice it to say, the financial markets will continue to have their share of troubles.   Buffet apparently told his underwriting company to no longer insure bank deposits above the $100k level provided by FDIC insurance.  This move by Buffet suggests that he thinks that risks to the financial sector remain elevated and are not likely worth the potential reward from an underwriting perspective. 

Most of the financial issues continue to stem back to the mortgage markets.  In Fortune this week, Buffet also mentions that a financial firm he owns has sub prime exposure but that they always kept the loans they generated on their balance sheet and aren’t having problems.   Similar to the notion that homeowners will always take better care of their home than a renter would, the implication is that if you loan to own rather than to flip to syndication agencies like Fannie, you’re more likely to make sure the loan is credit worthy in the first place.  Perhaps before we rush to judge the supposed corrupt business practices of folks in places like Russia, we should first examine the speck in our own eyes.  

In some good news today, China’s inflation rate showed a dramatic deceleration, falling to 4.9% y/y from 6.3% y/y.  In addition, Federal Express actually preannounced an upside surprise to their results based on the pullback in energy prices.  Readers may recall that they preannounced poor results some weeks back after energy had skyrocketed.  This is why lower oil prices should eventually be a boost to our economy.

It looks like the markets should open to the positive side this morning, holding the crucial 1200 level on the S&P.