Looks like I found my personal Lehman Brothers - down from $38 to $18 in just 2 hours. Amazing. S&P, which has been a useless credit agency which missed the entire subprime debacle, is now in shoot first ask questions later mode - simply on the chance it might change the rating the market is fleeing the stock. I had to cut some at a loss just to avoid carnage but what an amazing turnaround.

• Standard & Poor's on Wednesday said it may change its credit ratings on Constellation Energy Group (CEG) amid concerns over the power supplier and utility owner's access to credit.
• S&P placed Constellation's ratings on watch "developing," indicating they may be raised, lowered or left unchanged at "BBB," the second lowest investment grade.
• "The CreditWatch placement reflects the increased urgency for the company to execute on its recently announced asset divestment plan and to complete other credit supportive strategic initiatives to shore up its balance sheet in the face of a broad loss of market confidence," S&P said in a statement.
• Options being considered by Constellation include selling the company, and management has told the rating agency talks on this are at an advanced stage, S&P said.
• S&P said it confirmed that Constellation's credit lines are in place, adding "Constellation is facing an acute crisis of confidence that has resulted in a decline in its stock price and a widening in its five-year CDS spreads.
• "I don't think they need to be bought totally, they may just need a partner for the trading book," said Dot Matthews, analyst with CreditSights. "The trading book has been providing all these great earnings but it requires so much collateral," she said. (I'd agree in a sane market. This is not a sane market)
• French energy group EDF SA recently doubled its stake in Constellation to 9.51 percent, under an agreement that limited the French company's purchases to 9.9 percent of company.

This is why this market is completely scary right now. It is at the discretion of buyers of the credit spreads swaps. And you can create a run on a stock just by buying a large swathe of these. So to reiterate - S&P is going to possibly downgrade due to an acute crisis of confidence. Caused by a decline in stock price. Caused by an increase in credit swap spreads.

Do you see how its circular? The dropping stock price, caused by the jump in "insurance" (the CDS spreads) is causing a crisis in confidence, which leads to lower stock prices, and higher prices for the insurance, which leads to... well you can see the same pattern over and over - first the financials, now we are in 6 degrees of financials. No one that needs access to credit for operations can be safe from this ploy.

The one positive is the advanced talks to sell the company but much like Merrill Lynch this is the hedgies forcing the hands of management. Again. See Morgan Stanley today. This weekend they were one of the "strong"players meeting with the Fed and Treasury trying to find a solution to Lehman. 3 days later they have become the victim and most likely need to sell themself to stave off the attacks.

Brutal. It is just not safe out there.