Who would expect an institution that survived two world wars to go under?'
    -- Dr Ahmad Magad, Singapore MP

The above delicious quote is from an article in today’s Singapore Straits Times about how various Singapore town councils have lost millions investing in structured financial products created by Lehman and others.

The recent moonshot in commercial real estate default risk indices makes it seem likely that the sector is finally tumbling, as it has seemed obvious for some time it would. Check the following graph (via Markit) of the CMBX to see the recent spike upward. It’s darn impressive.

Some links to items of interest:

• Action bias among elite soccer goalkeepers: The case of penalty kicks (RePec)
• Will Beer Be the Next Casualty of the Crisis? (USNWR)
• Hedge Fund Managers Are the Heroes of this Crisis (The Daily Beast)
• Face to Face with John Paulson (P&I)
• The Twin Curves of oil and treasuries (Gregor)
• Rising default swaps on Berkshire (Bloomberg)
• Creeping protectionism in Russia and India (BV)
• Dylan Ratigan on preventing “too big to fail” (Icahn Report)
• You might want to stop paying your mortgage (Carney)
• How a lawsuit can go IPO. Really. (P&I)
• Religion and bankruptcy during the Depression (Business History)
• Pershing Square to hold a Target webcast on Wednesday morning (Webcaster)
• Taiwan subway ridership during the SARS outbreak (arXiv)
• Current slump will be worse than Depression (Reuters)

Interesting disconnect in a new study on activist investing:

Overall, 56% of respondents expect to see an increase in shareholder activism in the next 12 months. But only 39% of corporate respondents expect the amount of activism to grow, compared with 72% of shareholder activists responding to the survey.

Get that? Most corporate sorts don’t think we will see an upswing in activist investing in the coming year, while most activist investors – the people who actually do that sort of thing – think they’re wrong. Gosh, wonder who is right?

[via P&I]

Nice OECD chart showing the massive changes in capital flows to developing markets over the last decade. A 40x increase in private creditors on a 5x increase in total flows is the sort of thing that makes you sit up and go “Whoa!”. Those latter flows are the kind that can rapidly disappear in circumstances like the present.

Good piece in the NYT on the changing nature of bankruptcy filings. A combination of fewer banks at other end of the filing, and more cash-starved hedge funds and the like, plus less debtor-in-possession financing, means that a growing number of Chapter 11 filers in the U.S. are now going straight to liquidation.

More here.