A new memo was released which showed Lehman Brother's executives knew their bankruptcy would cause a domino effect to start the financial crisis.
Bloomberg got a hold of the confidential memo:
The warning was ominous: “Massive global wealth destruction.”
That’s what Lehman Brothers Holdings Inc. executives predicted before they filed the biggest bankruptcy in U.S. history. “Impacts all financial institutions,” read one bullet point in a confidential memo prepared for government officials obtained by Bloomberg News. “Retail investors/retirees assets are devastated.”
(See CNBC bothering to dig this deep? So why is Bloomberg not part of the base cable/satellite packages instead of noisy CNBC?)
“They put the entire financial system at risk, and they didn’t have to,” said Harvey R. Miller, a partner at Weil Gotshal & Manges LLP in New York who represented Lehman in the bankruptcy, referring to government officials. “They were warned. I told them, ‘Armageddon is coming. You don’t know what the consequences will be.’ Their response was, ‘We have it covered.’”
Bloomberg also notes how instead of limiting the possibility of systemic risk, the government response has been to increase systemic risk.
It's a dynamite article, read the whole thing.
So my question is if they had bailed out Lehman, just how much U.S. taxpayer money might have been saved?
Still seems it's still ignoring the obvious, if regulations were not changed ignoring the wisdom of those who lived through the Great Depression, none of this would have happened.
I'll try a phrase myself. The government making larger, giving even more power to select banks such as Goldman Sachs, Citigroup, JPMorgan Chase...is plan 9 from outer space.