"And Igby (Lehman) Goes Down!

Just as I wrote that perhaps the financial crisis was coming to an end, an egg smashed right onto my face and my foot was jammed into my mouth. What a week it's been: so this is how (Lehman's) world ends, not with a whimper, but instead with a bang.

AND LEHMAN GOES DOWN!

A group of Wall Street Journal writers crafted a wonderful article with a timeline of how the formerly powerful Wall Street players painfully pondered their piles of green paper and the ultimate ramifications of those rancid ruminations (too much alliteration?). The piece that they wrote was entitled: "The Players Remaking Financial World". I found it on Yahoo! Finance.

Right after Lehman filed for Chapter 11 bankruptcy, Merrill Lynch, a veritable wall street blue blood, ran like greyhound bitch (meaning female dog, not Cruella de Vil) in heat to the welcoming arms of Bank of America's CEO Ken Lewis.

Seemingly moments later AIG, one of the worlds largest insurance company's, was about to implode when all of sudden good 'ol Treasury Secretary Paulson swooped and in asked: "Do you feel lucky, punk? Well do ya?" The answer was yes, and Uncle Sam gave them a monster loan to the tune of $85 bil.

Let's also not forget that husband and wife "F-Team" of Fannie Mae and Freddie Mac were just taken under the governments wing just a week or two ago as well...

The Dow lost almost a 1,000 points this week and then picked most of it back up upon hearing the news that 'W.' and Paulson are going to setup a $700 billion mega fund (at the time of writing) to buy up all these worthless home mortgages that are the root of the issue...

So, 5 Lessons Learned:

1. No institution is ever to big to FAIL (even if the government helps you, you've still failed!)

2. Wall St. is lucky that the Treasury Secretary used to be drinking the Kool-Aid at Goldman not too long ago...

3. Nothing is more fun then increasing the national debt by about 8% overnight

4. You don't always get what you pay for (Boss: "We paid how much for this mortgage? OK. And how much is it worth today? Hmmm... Want to skip town and go to American Samoa?")

5. The landscape of investment banking will forever be altered, and it has become evident that these banking firms were operating under a fundamentally flawed business plan.


Have a look at my next post on the silver lining in all of this...

By the way, I still haven't had a chance to post my balance sheet yet b/c of all this craziness is more fun to write about for the moment...

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