If they got it right, the markets will absorb the shock without too much more damage to the broader economy. If they got it wrong, a new painful leg for the financial system and economy has only just begun. -Sudeep Reddy and Jon Hilsenrath, Wall Street Journal, September 15, 2008
That about sums it up. The Fed decided to let the Lehman chips fall where they may. Rumblings over the weekend lead to an all out trifecta of Wall Street tragedy Sunday, with Monday now the blackest of black; Lehman’s demise, Merrill’s fire sale to BoA and AIG (AIG!?!) on the rocks. For Reddy and Hilsenrath’s excellent explanation of what’s happening, visit www.wsj.com.