…that’s how the ever ‘fragrant’ Francine McKenna Tweeted this from the FT on the Lehman’s collapse. Classic stuff. What’s intriguing to me is that journalists are realizing what the financial institutions don’t seem to understand:
The broadest and most challenging question, we suppose, is whether in the long run, the whole banking system was set for failure anyway. Or to rephrase it: from a counter factual point of view, would a world in which Lehman was propped up necessarily be a safer one?
and quoting the FT’s John Gapper:
I’m not convinced that, even if Lehman had been rescued, that would have averted the problem since the weight of selling and panic would have moved on to the next financial institution and then the next. So the world would probably have ended up in the same position it is in today, with a broad financial sector bail-out.
It’s heavy going stuff for the non-financially minded. But an excellent analysis all the same. We are of course all holding our collective breath to see what happens next. Right now I’m not convinced anyone knows. And that’s a worry.
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