Asia Finally Gets the Message
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Lehman is a wake up call that America can't be trusted.
Posted Monday, September 15, 2008 - 12:03pm
In letting Lehman fail the federal government puts a fine point on an obvious question: Why didn't they let Bear Stearns go, too? This business about the markets having time to adjust to Lehman's problems is baloney. The markets didn't adjust to Bear Stearns collapse; the markets looked at what the Feds had done for Bear Stearns and assumed they'd do it for Lehman.
One part of the answer is that the people who sit on top of our financial system simply didn't know what would happen if a big Wall Street firm went down. They have since studied the matter and concluded that their worst fears were unfounded.
But in Lehman's list of creditors we have another part of the answer, I'll bet. It wasn't merely instability the U.S. Treasury and the Federal Reserve feared. It was the loss of the good opinion of the people who supply the
What do you think they're saying about them—and us—now?
Comments
Unlicensed Greed
Unbridled greed always leads to a comeuppance. Evidently the folks who put in the Glass-Steagall Act knew very well what they were doing -- unlike today's Borrow and Bomb Conservatives, who think "the market" should be free to bankrupt the entire world, if that's what makes the most money for a while.
Lehman
When does it end, Michael? What large financial institution isn't intertwined with capital from Asia? The Asian firms knew the risks; they certainly knew that the US had inflated its housing sector with dirty paper. And where else are they going to put their money now, Michael? As you write, perhaps Sudan.