Bryan Takes Over the Treasury
By Arnold Kling
“The collapse of this deal casts a dark cloud over Wall Street,” said Frederic Dickson, who helps oversee $25 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. “It also sends a message that the government is getting out of the bailout business and makes financial institutions like AIG and WaMu look even more vulnerable.”
Read the whole thing. My guess is that the government is not getting out of the bailout business. You have a session in which the folks being asked to take over Lehman say, “Give us X, Y, and Z, or we walk.” The government negotiators think that’s too generous. They let the folks walk. My guess is that the folks will come back to the table. Or someone else will come to the table.
It makes me glad I signed up to attend this session. I will be curious what these guys think of what’s going down. I have met several of them, but they may not remember.
UPDATE: The Wall Street Journal has some appropriately apocalyptic headlines.
I predict that lots of folks pull all-nighters, and there will be more dramatic developments before the markets open tomorrow.