Government not bailing out Lehman Brothers
Well, it looks like the feds may be catching on to what I have been saying. They are going to “allow” Lehman brothers to go bankrupt and not use my money to bail them out.
That’s how the free market works. You can already see the results. Merrill Lynch got concerned about the impact of Lehman Brothers bankruptcy on the larger market, so they went to Bank of America and the two brokered a deal. In this case, Bank of America, a publicly owned company, provided the $50 billion to “bail out” Merrill Lynch. Man, this free market thing is really neat!
Kudos to Henry Paulson and the rest of the Bush administration for not doing the easy thing that would have, probably, buoyed the market for the day, or maybe even the month. If they had bailed out Lehman Brothers, Merrill Lynch would likely have never gone to Bank of America and worked out a deal. What would happen next? Probably Merrill Lynch would have gone belly-up and the feds would have to bail them out too! As it stands. The stock market drops 4-5% in one day, Bank of America/Merrill Lynch becomes a stronger company, and Lehman Brothers gets what they deserve for getting involved in risky real estate investments that didn’t work it! I love this free market thing!!!