Tuesday, September 16, 2008
I wasn't quite sure what to do with this short plug for Barry Ritholtz's new book on Sunday, when it first became clear to me what his "special summer project" was on the same day that it looked like the U.S. government was going to actually do something to counter the impression that "moral hazard" was just a way of life in Washington.
Well, that was Sunday.
That is, when Lehman Brothers was being thrown to the wolves and the gubment looked as though it had also gotten wind of the book title and wanted to make a point.
However, Tuesday turned out to be a different day, the bailout of AIG by the Federal Reserve now restoring the confidence of both the publishers and Mr. Ritholtz himself that the thesis was sound.
Amazing... just amazing...
There's also this weekend commentary in Forbes Magazine that might be worth a look now that the nation's palate has been cleansed with the AIG deal.
Where's The Ref?Uh... Couldn't agree more.
The credit crunch. Bear Stearns. The housing crisis. Fannie Mae and Freddie Mac. And as of today, Lehman Brothers, Wachovia and possibly even such august firms like AIG and Merrill Lynch.
Wall Street is now scrambling, anticipating a sale of Lehman Brothers this weekend. It behooves the reader to consider how we got ourselves into this mess, what possible solutions there are to the current problems, and most important, how we can avoid finding ourselves in a similar situation in the future.
The current headache begins and ends with ideology, namely that of former Fed Chairman Alan Greenspan--an acolyte of Ayn Rand, a free-market absolutist, a true believer in the evils of regulation. Many of the present headaches point directly back to the decisions made by the Greenspan Fed. Sure, there is plenty of other blame to go around: an unengaged president, a clueless Congress, a hapless FDIC, a compromised OFHEO, and Phil Gramm--but the biggest and most accusatory finger points directly at Easy Al.
There's lot more over at Forbes - something about football, as I recall.