[rohry]

"Although it's been common knowledge for some time this is the first i've seen in the mainstream media acknowledging the problem."

Me too. That's why I posted it...

[arete]

I was just reading on another site that in the event of a major terrorist attack, many banks and brokerages might declare a force majeure to cover their debt and options losses. It would also give pension funds an out of any contractural obligations. Could turn into a real lifeboat in case of a financial meltdown. We are hearing more of a "spectacular terrorist attack" now aren't we?

Force Majeure literally means "greater force". These clauses excuse a party from liability if some unforseen event beyond the control of that party prevents it from performing its obligations under the contract. Typically, force majeure clauses cover natural disasters or other "Acts of God", war, or the failure of third parties--such as suppliers and subcontractors--to perform their obligations to the contracting party. It is important to remember that force majeure clauses are intended to excuse a party only if the failure to perform could not be avoided by the exercise of due care by that party.

Richard W.