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Before we even get started down this line of questioning, letting Lehman Brothers go into bankruptcy was one of the few intelligent decisions made last Fall. Markets needed reminding that capitalism still existed and that bad balance-sheet decisions would not be rewarded.
Tangentially, has anyone stopped to consider that Lehman said it was fine and just needed $30 billion to get through the crisis, yet when all was revealed in bankruptcy court, there was a $613 billion-dollar hole in its balance sheet? This should provide some indication of the level of insolvency that permeates our nation's banking system. Most banks are massively insolvent if forced to value assets honestly. Nothing has changed except the accounting rules.
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