Yes, finally we can see the crunch in US consumer credit data. The slowdown started last September.Although the crisis began back in August 2007, the collapse of Lehman appears to be the divisive point when the crisis moved from the financial sector to the real economy.
Why did the Fed let Lehman go? In retrospect, it looks like the dumbest decision in decades.
4 comments:
It all leads back to Lehman. What exactly happened?
"Why did the Fed let Lehman go? In retrospect, it looks like the dumbest decision in decades. "
score settling perhaps?
You know some days I don't know where you are coming from.
You seem to be against bailouts and then you say Lehman should have been saved.
You have as your tagline that "not one stone shall stand upon another" and then seem to think that the real economy will not be affected.
You seem to put a great deal of faith in regulation but virtually none in the people who would be doing it.
Maybe I've misread you (and I hope I have) but there do seem to be some contradictions in your thinking.
All LEH failure did was accelerate the inevitable. End of story. Saving LEH would not have made a bit of difference in the picture of the unraveling credit bubble.
We are where we are because of decades of easy credit/monetary policies and unregulated markets. The current resulting environment was baked into the cake along time ago.
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