End of the world

Meltdown on the street.
Last March, it was Bear Sterns, toast and the handwriting was on the wall.

The discount window was opened for investment bankers ... whoops. Take government money and you get government oversight.

No longer would Wall St. be as much fun ... nor as lucrative.

Some learned, and some didn't
Lehman for one, Dick Fuld (CEO) chose to play chicken with Hank Paulson (Sec of Treas) ...
and lost.
Merril Lynch was swept up by Bank of America, now Morgan Stanly is under attack (from short sellers)

So what gives?

I question the model of Investment Banking.
Many companies don't need their services, they are sitting on plenty of cash.
Shops like Lehman ended up trading obscure instruments that often were so strange that almost nobody really knew what they were.

As one contact told me "every financial disaster always can be traced to group think"

Is there a good reason for Investment Banking in today's financial world.
Yes, but likely much smaller than just a few years ago.

Here's some more insight into the Credit Crisis
Credit and blame | The Economist

FT.com / Columnists / Martin Wolf - The end of lightly regulated finance has come far closer

FT.com / Comment & analysis / Comment - Modern history’s greatest regulatory failure: "Modern history’s greatest regulatory failure

By Roger Altman"

What's brewing, restrictions on trades, restrictions on shorts
Note that I believe in shorting, but the old way, on upticks, with borrowed shares.