The government is looking for an agreement that would not involve public money.
That’s about Lehman Brothers.
Sentences to scare you
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I wish them luck, but…
Doesn’t some reasonable moral hazard imply that they have to let somebody fail? And if not Lehman, then who?
How about sound money and free banking with no note issue restrictions or branching regulations? Just a thought.
Interesting concept… Public money..
Why is this sentence scary?
Because “heads we win, tails the taxpayers loose” crony capitalism was/is always based on public bailouts even though “free market” rhetoric was strategically employed by the cheerleaders every step of the way.
Without taxpayer money, Lehman’s counterparties will take sizable losses. In the future they (and the rest of Wall Street) will impose rigid controls on risk and leverage.
That means that the Wall Street money machine substantially closes up shop and clearly that’s not an outcome Tyler can live with.
Might be (rather) good for the American people though.
A real economy? Based on production and sale of actual goods and services rather than debt spirals and speculation?
Unthinkable, at least in some quarters.
And why exactly would China want a free Lehman?
pants:
It seems like most folks are missing the silver lining here. Before the recent crash, the Chinese appeared to take American financial capitalism seriously and were willing to trade access to the Chinese market (for American investment bankers) in exchange for political support in Washington.
That mean Goldman, etc. lobbying for “free” trade, the rigged RMB, massive trade deficits, outsourcing, etc.
Now having seen how well American crony capitalism works, and how quickly sovereign wealth funds get burned on Wall Street, they are backing off.
This is a double dose of good knews. China won’t poison itself with America’a failed financial system and the IBs will have less incentive to betray our nation’s interests for the Chinese market.
1) let lehman fail! Failure is good, everybody should fail some of time but not all of the time (Just ask the CEO he is probably golfing).
2) I am sick of all this financial interdepence talk leading to the economy spiriling out of control. We are no more intertwined than the florentine bankers were. Big deal we sit behind computers all day emailing and reading useless garbage. I dont feel smarter…do you?
3) I suppose the shorts were right, David Einhorn in particular. There was ample warning regarding the direction Lehman was heading. If regulators continue to allow Corporations to mislead the public (*Investors in Lehman stock I suppose should have been more attentive as well) with there shady accounting the problem is only going to get worse. Read David’s speech he does an analysis of Lehmans accounting.
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