LEH to Korea back on ... Fukuda resigns ... Brown-Darling to the rescue

Dollar steady overnight, and commods too after night after yesterday's falls. Oil was off 4% to $111 as Gustav made land ... oil and gas production were pretty much entirely halted and while its too soon to say what damange has been done, reports so far suggest little. Hanna, meanwhile, continues to gather strength but looks unlikely to get hit the GoM. The trajectory suggests it will make land somewhere on the eastern coast of Florida ... metals and grains off an average of 2%. Asian markets are generally higher (except China) on declining commodity prices. Clearly no one has yet thought to ask why commodity prices might be declining ...

Pork barrel spending to return to Japan? Yasuo Fukuda, who took over from the cack handed Abe, is the second PM to resign in less than a year and leaves Taro Aso likely to take the reigns from here. Mr. Aso is more of the "spend now ask questions later" political mould and has recently been making loud noises calling for the govt to postpone balancing the budget by 2011. Maybe not such a bad idea, given that Q2 GDP fell by 2.4% ann?

Cyclical inflation top? Australian banks rallied overnight on expectations the central bank has begun its easing cycle. It lowed rates by 25bp and more is expected ... Thai, Indonesian and Korean inflation all fell last month ...

The Korean Development Bank have again said they're looking at LEH. Apparently such an aquisition is in keeping with the KDB's long-term goal of becoming a global investment bank. Seems novel. The whole point of investment banking is to ensure employees get paid handsomely for the good times while the governent coughs up for the mess in the bad times. But here are the Koreans trying to nationalise the gains as well as the losses ... what a revolutionary idea ... or maybe they just figure its a more fun way to throw away money than trying to prop up their ailing currency. Anyway, last time the KDB said they were interested in buying, the Korean financial regulator (apparently there is one) sagely advised against spending public money in such away ... that sounds like the most sensible thing to me - Korean bureacrats running swashbuckling risk-taking Lehman brothers will be a double act which makes Gordon Brown-Allistair Darling look like it was made in heaven.

Speaking of which, the dream team announced their rescue package for the UK housing market. Families earning less that £60k per year will receive help of up to one third of the mortgage for the purchase of a newly built property, while those struggling to meet mortgage payments will be able to ease the debt burden by selling an equity stake back to the government.