Sunday, September 14, 2008

Lehman death watch

This is really a damned if you do, damned if you don't situation.

It's like being trapped in a blazing inferno in a high-rise. You can stay and burn to death or jump and die from the leap.

Likewise the Lehman crisis provides the government a similar awful choice. It can let the firm fail and see a major financial collapse. Or it can bail the firm out, and delay the financial collapse until the next giant firm gets in trouble, like Merrill Lynch or Goldman Sachs.

Frankly, if it's going to happen they might as well get it over with. The bubble will have to be pricked and delaying it merely increases the eventual pain.

We should know if a few hours.

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