Lehman , Merrill , AIG : bankruptcy, buyout, government bailout. Goldman Sachs shares slide amid the fear. And Morgan Stanley is desperately seeking a merger. What does it all add up to?

The death of capitalism, says Paul Donovan. The senior international economist at UBS says governments must step in to steer the global financial system -- or the free market as we know it is doomed.

Watch the video for his frightening prediction.

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The Panic of '08:

- Dow 30 At a Glance

- Is Your Money Market Fund Safe?

- We Need 'Banker Prozac'

- Slideshow: Victims of the Credit Crunch (So Far)

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Disclaimer

Finding cheap stocks in a downdraft isn't hard. Finding valuable stocks can be. David Pearl has a simple formula for stepping back from the fray and pinpointing the potential winners.

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Don't go it alone!

• Trade w/ CNBC's Experts: Picks & Pans

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"The framework one should look at is companies that are very profitable," the head of U.S. equities for Epoch Investment Partners told CNBC. "If they generate cash, they're going to do very well, even in a downturn. That cash means they can never go out of business -- and when their stock is down, they buy it back, or buy a competitor very cheaply."

Recommendation:

"Davita is an example," he said. "When you provide services to the chronically ill, if you lose kidney function, you need to be dialyzed three times a week for the rest of your life, so they have very stable revenue -- which translates to great free cash flow, and that cash pays down any debt and buys back shares."

Mary Jane Matts says it's essential to separate companies and stocks from today's market turbulence -- to find accurate values for them.

"I would look away from the financials, but just because the financials are so difficult to value doesn't mean that traditional fundamental techniques cannot work outside of that sector to find good investments," the manager of the four-star Fifth Third All Cap Value Fund told CNBC.

Recommendations:

So who makes her list?

"In the health-care sector, we'd point to Schering Plough," she said. "It's a stock that's somewhat unique in that they have very little in the way of patent exposure, and are not facing the same cliff that the rest of the pharmaceuticals are."

Matts also likes XTO Energy in the energy exploration and production space.

• Counterpoint: Stick w/ Gold!

"(It's) a company that's an extremely low-cost producer, again, back to the real economy, where we think the long-term, secular trends in energy are going to be supportive of improving returns here," she said.

Disclosures:

Disclosure information for Mary Jane Matts was not immediately available.

Disclaimer

Precious metals still have plenty of upside, two strategists told CNBC.

Crazy bets on market volatility and a big move in Morgan Stanley ... That's what the options market seems to be looking for, according to Rebecca Darst of Interactive Brokers.

The real attention-getter, Darst said, was a single huge bet that market volatility, as measured by the VIX index, would blast up to 50. At its Wednesday close it was around 36. The higher the VIX, an index of option hedging activity, the more nervous the market.

"We actually did see somebody enter a large-size long position in November 50 calls. On the VIX , November 50 calls," she said Thursday morning on CNBC. "It was 15,000 lot transaction. There was not terribly much open interest at the strike, so we can safely conclude that this was an opening purchase. (There is) about a 5 percent chance, according to current market conditions, that VIX will break 50 by November, so we'll see what happens. We've been stuck in a bit of a regime for several months where these incursions, up about the 50 line, have been very short lived."

In the video at left, CNBC's Maria Bartiromo discusses Wednesday's market turmoil and looks ahead to Thursday's events.

(Also: See her weekdays on Closing Bell .)

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Topics discussed:

- Housing starts, oil prices and the gold rush.

- Thursday's earnings reports: FedEx , ConAgra, Oracle

- All things AIG

- SEC's rules against "naked" short selling, in effect on Thursday

- Barclays' buy of Lehman unit

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New from CNBC.com:

• Dow 30 At a Glance

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Disclaimer

"Panic" is breeding stock-buying opportunity, says Bill Quinn, chairman of American Beacon Advisors. He offered CNBC his investment advice amidst market turbulence.

The U.S. dollar dropped Wednesday against the euro and against the yen, after news that the Federal Reserve would bail out AIG.

But CNBC's Matt Nesto reports that some say the Fed continuing to hold interest rates steady might make the greenback a great buy.

• Where's the Dollar/Yen/Euro Today?

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More Financials in the News:

- Morgan Stanley , Goldman Sachs

- Story: Morgan, Goldman Shares Plunge as Fears Rise

- Lehman Bros.

- Story: Bid for Lehman's Investment Arm Is Imminent

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Disclaimer

Don Wordell says the consumer is just fine-- and he offered CNBC fans a stock pick to back thatup.

Wordell manages the RidgeWorth Mid-Cap ValueEquity fund, rated five stars by Morningstar.

• Contrarian: Just Stick With Gold!

"There are a lot of things that can scarethe consumer right now," concedes Wordell. "But when youlook at the total landscape, inflation is in check, haspeaked... Interest rates are low, gas commodities priceshave dropped."

Recommendation:

Wordell likes Darden Restaurants.

He praises Darden, the owner of the OliveGarden and Red Lobster restaurant chains, for its "great3 percent dividend yield," noting that themiddle-of-the-road Americanized Italian eatery chain hasgone "10 years since its last negative salescomp."

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Darden's Competition: Compare for Yourself
(Click tickers for stock info)

- Brinker Intl.

- DineEquity

- Yum! Brands

- Denny's ______________________________________
New from CNBC.com:

• Dow 30 At a Glance

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Disclosures:

Disclosure information was notavailable for Wordell or his company.

Disclaimer

Maria Bartiromo discusses Tuesday's top business and financial stories -- and looks ahead to tomorrow's events.

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Topics:

- Interview with Hank Greenberg

- AIG Bailout?

- Earnings: Goldman Sachs, Morgan Stanley

- Dell Warning

- GM's Volt

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New from CNBC.com:

• Dow 30 At a Glance

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Disclaimer