This is not the end of the world. There is much worse to come.

As I write, the stock price of Lehman Brothers is 20 cents a share, and overvalued at that. What once was a prudent nice German Jewish private investment bank started out more than a century and a half ago and then ran after strange Gods. And look where it got them. Do you remember Herbert Lehman, governor and U.S. senator from New York? It was his father and uncle who opened up shop.

What comes next is impossible to say. But I'd bet that CitiGroup is due for some more serious price shedding and maybe even a trip to the emergency room from which it might or might not emerge. A part of its salvation thus far is that its exposure is so huge and so dispersed that certainly no one in house -- and surely not Robert Rubin -- has any grasp of what has happened.

Merrill seems to be in the process of being acquired in a bargain basement, barely disguised sale to Bank of America. Nobody seems to know the details, including the principals. Or maybe especially the principals.

Now AIG, which seems to insure everything and everybody, fell $6.60 today, down to $5.15, accelerating its descent by 56%. This calamitous fall has, however, been occurring for months and months. Its 52-week high was in the very low seventies. And it's been lower than $5.15. Yes: you could have bought it at $3.40. Damn.

As to the insurance guarantors of debt, MBI and Ambac (in which I must confess to be profiting from a big short position) has resumed its downward slide. Down, I believe, to nothing. Or maybe 20 cents, like Lehman.

What united all of these institutions is they bribed or cajoled or sweet-talked the three rating agencies to give them highly inflated ratings. The three are Moody's, Standard and Poor's, and Fitch. Just wait till the legal suits start piling up against them for rating fraud. An ancillary part of the fraud is while they systematically overrated the corporate sphere (many of the companies now in deep doo-doo had triple A ratings only months ago) they underrated public agencies so they would have to pay for their loan guarantees.

So actually it is the rating agencies which are (at least) partially responsible for the collapse of the markets. This is the worst case of hyper-inflation in grading there is. And, if there is a just God (as opposed to a strange God), there will be hell to pay.

I know everybody wants to blame the Bush administration for this calamity. And it certainly hasn't helped. But the fault goes back to Bill Clinton who took up the call of deregulation and ran with it. Like with everything he did he did not look back. No, that's a bit unfair. It goes back to Ronald Reagan who (not single-handedly but with the boy geniuses at his side) destroyed the airline industry in America.

Rating agencies are a public trust. You should not be able to buy yourself a high rating or haggle for one. Hear, hear: More regulation. No embarrassment in saying so. The deregulators should be embarrassed.