Lehman Aftershocks

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It looks like $5 billion of Lehman bonds priced at around $0.0975 in the fire sale auction today. That is somewhat dire for anyone who wrote credit default swaps for Lehman and now has to cover the difference, or $0.9025 on the dollar. The Street Sweety had it essentially right earlier (I know, hard to believe).
The price isn't official until 2pm, but it is hard to imagine it will change all that much between now and then.
Bloomberg is quoting someone who thinks this means about $270 billion in payouts from CDS writers is now due. Obviously, that's going to require some asset dumping to raise cash. Possibly, that will sink a few firms in the weeks to come.
Ouch.
Initial Results of the Lehman Brothers Auction, Friday 10th October 2008 [MarkIt]
Lehman Initial Swap Auction Indicates Larger Payout [Bloomberg]
About Those Lehman Brothers Credit Default Swaps [Dealbreaker]

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