Games of chance

Overnight headlines:

Canadian firm expects to raise $1 billion for Vietnam casino

Lehman bailout collapses as would-be rescuer Barclays balks at risk

"It's a funny old world," was Margaret Thatcher's immediate response to being ousted as British PM by her own cabinet colleagues - an abrupt end to the tenure of the longest-serving occupant of No. 10 since William Gladstone.

Ain't it the truth. An obscure Vancouver-based based developer has good reason to believe it can raise $1 billion for a casino in Vietnam, a communist regime still hostile to many forms of private ownership. But in the entire global financial system there are no private-sector buyers for the 158-year-old Lehman Bros., the U.S.'s fourth-largest securities firm, laid low by its swollen portfolio subprime, or junk, mortgages. 

Oh, and also over the weekend, Merrill Lynch & Co., world's largest securities firm and the pioneer in popularizing Main Street securities ownership, is seeking refuge in the arms of a merger with Bank of America by which Charlie Merrill's firm will lose its identity, with the U.S. government as midwife to that rescue. Here's the fun part: After previously absorbing the giant credit-card issuer MBNA and more recently bailing out Countrywide Financial, the leading issuer of U.S. junk mortgages, Bank of America is not not in such swell great itself.

Oh, and also over the weekend, New York's American International Group (AIG), one of the world's largest insurers, stuck out its hand for a $40-billion (U.S.) bailout from Uncle Sam.

First came the bailouts of Northern Rock PLC, one of Britain's largest mortgage lenders; then Manhattan brokerage Bear Stearns Cos., at a $29 billion cost to American taxpayers; then, weekend before last, of the giant U.S. mortgage lenders Freddie Mac and Fannie Mae, backstopped by $200 billion in U.S. taxpayers' funds.

We're witnessing an unprecedented meltdown of the U.S. financial system, a gutting of New York City's largest brokerages, jeopardizing Gotham's status as the world's financial capital (London already leads New York on several measures), and somehow this isn't a big issue in the U.S. election campaign.

Wall Street often is described as a casino, and dealings with it a crap shoot. Turns out investments in real casinos are seen as a better bet these days than the tumbling financial houses led to ruin by the current generation of what Tom Wolfe called "Masters of the universe." 

You were wondering about the estimated total cost of the financial-markets collapse. The IMF says it will clock in at about $1 trillion (U.S.) - roughly equal to the anticipated cost to Uncle Sam of the Iraq and Afghan wars to date. But don't bet on that number; earlier this year the consensus loss estimate for the global credit crisis was not expected to top $500 billion (U.S.).