Let’s start at $500 billion. Why? That was the figure Paulson’s emergency elixir was thought to cost…as recently as Friday. In a characteristically misguided effort to restore calm to the markets, the federal government proposed a plan that involved purchasing a half trillion dollars of carcinogenic mortgage-backed assets.

Nomura Holdings Inc. (ADR: NMR) yesterday (Monday) snapped up bankrupt Lehman Brothers Holdings Inc.’s (OTC: LEHMQ) Asia assets, and is close to inking a deal for its European units as well. Tokyo-based Nomura will pay $225 million for Lehman’s Asia-Pacific operations. As part of deal, Nomura will take on 3,000 former Lehman employees in the region.

Wall Street has changed beyond recognition over the last couple of weeks. As of today not one of the “big five” independent investment banks is left standing. According to Bill Bonner in The Daily Reckoning, the big banks have only themselves to blame. They began to believe they were invincible… but of course they were nothing of the sort.

The headlines are dramatic. Short selling banned for 799 financial institutions. $50bn injected into money markets. Plans for a massive bailout fund to clear the system of bad debt and stabilize the housing market.

The Unholy trinity – the Federal Reserve, SEC and Treasury – has pulled out all the stops this time. But while US stocks soar, Justice Litle says the government’s bailouts are a death blow for the dollar.

This makes real, tangible assets highly attractive. Justice says the most profitable investments going forward will be energy, infrastructure, hard assets and non-US growth plays.

Yesterday, central banks launched a coordinated effort to flood global money markets with U.S. dollars in hopes of easing strained financial systems in danger of freezing up entirely. However, many analysts see this as only a short-term solution that will lower overnight lending rates but fail to assist financial institutions with longer-term cash needs, says Jason Simpkins  in Money Morning.

Having savaged the U.S. financial sector since it surfaced in the summer of 2007, the credit crisis evolved into a crisis of confidence – which has manifested itself as a liquidity crisis. And that liquidity crisis is no longer confined to the financial sector. It’s spilled over into the energy sector, as well.

Over the past few days we’ve seen some pretty scary stuff. The prevailing emotion in the markets seems to be uncertainty and fear. Stocks have gone down, the dollar has followed. We’ve also seen oil tick up with gold shooting like a rocket. Who could have seen any of this coming?

Right before yesterday afternoon’s spectacular rally in US stocks, Andrew Snyder recommended investors buy oversold shares. In particular, he said Nortel (NYSE:NT), which was down 45% since the start of the week, didn’t merit the plunge and was due a short-term bounce. NT today is up by only a fraction of a percent. This means there’s time to get in on this trade.

The bailout of AIG (NYSE:AIG) was supposed to calm investors fears of a financial collapse. But instead it just exposed just how bad things are, says Chuck Butler in Daily Pfenning. Foreign investors, who the US relies on to finance its huge deficits, have started to move their funds out of the US. This means lower living standards for US citizens, thanks to higher borrowing costs and a lower US dollar…

It may have left interest rates on hold last night, but the Federal Reserve isn’t done dishing out money. Just days after leaving Lehman Brothers to collapse, the Fed has ditched its concerns about moral hazard and stepped in to bail out insurance giant AIG, to the tune of $85bn.