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This morning another historic event occurred: Lehman Brothers filed for chapter 11 bankrupcy. With $615 billion in direct liabilities, it will be by far the largest bankruptcy in history. Lehman is 158 years old, and a longtime pillar of Wall St. However in recent weeks the bank has come on hard times due to bad bets on mortgage securities. The resulting losses caused major credit downgrades and produced a situation that made it more expensive for Lehman to fund transactions than the revenue it created. The bank fell fast; it was only Friday that executives had an emergency meetings. Today they are in full chapter 11 (liquidation) bankrupcy.

A bankruptcy of this size is unprecedented, and it’s really unknown what it will do to the rest of the market. It could cause a cascading effect on other financial institutions and create a truly unstable financial marketplace. Another note: this is 2008, and the world is connected financially. European and Asian markets are already plummeting on news.

So I’m not a doomsday guy, but this level of instability is a little scary. It will be interesting to find out just how resilient our global financial system really is.

The next 48 hours or so will be fascinating to watch!