Malcolm Turnbull’s opening two salvos in Question Time yesterday were right on the money and Kevin Rudd was left wanting in declaring no knowledge of any Lehman Bros exposures by the three tiers of Government in Australia.

As Michael West explains in the Fairfax press today, the Lehman collapse is a big issue for Australia because there will be nothing left to sue for all those councils and charities which followed the advice of its subsidiary Grange Securities and plunged almost $2 billion into dodgy US mortgage securities.

The Big Four Australian banks led the way yesterday with prompt disclosures of their Lehman exposures and the onus is now on everyone else to do the same. Australia’s biggest investment bank, Macquarie Group, has been notably and disconcertingly silent on Lehman, although it did lash out at The Australian this morning for what looks like a reckless story by Adele Ferguson claiming it must refinance $45 billion by March next year.

Westpac shares went up yesterday when it once again finished top of the class by disclosing a Lehman exposure of less than $10 million. The other three big Australian banks are on the hook for $400 million.

Contrast Westpac’s transparency with NAB which is getting sold off for not coming clean on its full CDO exposures and now finds its $37 billion market capitalisation is a record $7 billion less than Westpac’s $44 billion valuation.

I was at a funds management conference in Melbourne where Brad Holzberger, the CEO of asset management at Queensland Investment Corporation, declared that he already knew what QIC’s Lehman exposure was.

This was 20 minutes after Rudd declared that he had no idea. Given that the QIC manages about $80 billion for largely public sector clients and is Australia’s biggest “sovereign fund”, surely a little statement on its website revealing the size of its exposure to the world’s biggest bankruptcy isn’t too much to ask?

The same applies for super funds, investment managers, brokers, lenders and even the ASX itself.

Then we have the collapse of AIG, which looks set to become 80% government owned in return for an $US85 billion bail out, as The Wall Street Journal explains in fast-breaking developments over the past few hours.

Okay, AIG was too big to fail and everyone from policy holders to counter-parties will probably be protected by the coming Fannie and Freddie-style “governorship”.

However, this still means that ordinary equity holders will be wiped out and given that AIG was one of the prestigious 30 companies in the Dow Jones Industrial Average, this means Australia’s $1.3 trillion superannuation pool will have big exposures.

Check out this graph of AIG and you’ll see that it was valued at $US180 billion just 12 months ago.

When Enron collapsed, the NSW public sector super funds dropped about $50 million but it took many months before this was disclosed.

Given that poor disclosure has been a big factor in this global financial crisis, let’s have some quick confessions of the $1 billion-plus that Australian super funds have dropped on AIG shares.

Listen to yesterday’s discussion on the market chaos and BrisConnections with 4BC’s Mike Smith.