Obsiadin Wings makes a good point

There's a story going around about how Treasury essentially repealed, perhaps illegally, a part of the tax code resulting in a $140 billion tax windfall for banks.

Like the Obsidian Wings poster, I don't have the legal understanding to know if this was legal, nor the economic background to know if it was a good idea. But it sure doesn't smell right, so Treasury had better explain why this was a good idea. As Obsidian Wings noted:

Third, giving banks a huge unilateral tax break is the sort of thing that might as well have been designed to deprive the bailout of whatever popular support it might ever have had. We live in a democracy. People's opinions matter. The Treasury should remember that, and act accordingly.

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.