Imagine my surprise. Sunday afternoon, I got on a plane to Orlando, FL. When I got on the plane, Lehman Brothers and Merrill Lynch still existed. When I got off the plane, I checked my iPhone and saw that Merrill was now part of Bank of America, and Lehman was going Chapter 11.
Bear Stearns. Lehman Brothers. Merrill Lynch. Fannie Mae. Freddie Mac. AIG.
Ongoing discussion now about Goldman Sachs and JP Morgan. Fundamental problems right now with any business who basically borrows short and then lends long, at high leverage.
Really unbelievable. Truly historic times.
I almost finished reading Conscience of a Liberal, by Paul Krugman, on the plane trip back. When I’m done, I’ll post a book review here. Krugman is a smart economist, but he’s become rabidly political of late. Still, a number of very interesting insights in the book.
One thing I definitely agree with is that the meltdown going on right now will be studied in history textbooks, the way that we studied the Roaring Twenties, the Great Depression, and the New Deal. My guess is that the story will go something like this:
- The End of the Cold War (1982-1992)
- The Twin Bubbles (1993-2006)
- The Great Crash (2007-2008/9)
- The Way Forward (2009+)
It’s interesting to think about, since of course the history hasn’t been written yet. And every day brings new surprises.