Monday, September 29, 2008

Lehman: Where it all began

When the Government let Lehman fail I said that the whole crisis had fundamentally changed. That day, the Dow dropped 500 points. Until then, the willingness to stand behind failing institutions (whether by bailout or guarantee), kept the crisi from going "systemic." When Paulson said, "I never once considered using taxpayer money for Lehman," the systemic crisi had begun.

In today's Wall Street Journal:

"Lehman's bankruptcy filing in the early hours of Monday, Sept. 15, sparked a chain reaction that sent credit markets into disarray. It accelerated the downward spiral of giant U.S. insurer American International Group Inc. and precipitated losses for everyone from Norwegian pensioners to investors in the Reserve Primary Fund, a U.S. money-market mutual fund ..."

Here's the link:

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