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We all know that Lehman is in a lot of trouble and could be the next investment bank to go bust, but I just cannot bring myself to buy the puts which already have an implied volatility of over 145%. The only way these puts would be worth anything is if Lehman collapses (always a possibility). I am staying away from shorting the investment banks after the FED bailed aout BSC. They might all be insolvent but they can now borrow directly from the FED, even if their collateral is close to worthless.

I am looking at the banks as a good place to short or buy puts. Commercial REITS are also looking good. Wachovia looks good along with Fifth Third.