September 15, 2008
Preventing Disaster Via Panic
filed under: Stuff to worry aboutI have a track record (searchable, in good part, under the "Stuff to worry about" category on this site) of reading very scary things by very smart people and then panicking a little. Okay, a lot. Y2K, bird flu, every hurricane that might be "The Big One..." And pretty much all the time, the crisis about which I am panicking does not actually come to pass.
I've started to become a little superstitious, as if the very fact of my panic causes risks to fizzle. Certainly, events that are widely hyped as "here comes disaster!!1!" seem not to be quite as bad as expected (Gustav), while the real earthshakers come while no one is properly paying attention (Katrina). The power of prayer, perhaps?
Anyway, like a baseball fan refusing to change socks because then his team can win the Series, let me put a warding hex out there by publicly venting some of my current freakout:
Very smart people are saying that the financial developments of last week and today (Lehman insolvency, downgrades to WaMu and - cataclysmically - AIG) could in fact destroy our entire financial system. This has me worried.
Look out everybody! The financial world as we know it could end tomorrow! The End is Near! This is the Big One!
[There. Now AIG and the broader financial fabric should be safe for a little while.]
Posted by rjt at September 15, 2008 10:48 PMThank you Rj for, single-handedly, sparing my husband's job at Merrill...er...B of A
Posted by: Peanuthead at September 16, 2008 07:50 AMwhat I don't understand is what forces are at work behind the "culling". Seems that something's saying AIG stays, Lehman goes, Bear Sterns stays, WAMU goes. I feel like its not a story that's all told by the balance sheet.
WHEN'S the TRIAL OF PHIL GRAMM START?
AIG was, literally, too big to fail. Lehman was not. You're right that it goes beyond the balance sheet. AIG was in 130 countries, had 100,000 employees. If it went away, the impact would have been too big, hit too many areas of the world's economy. Oversimplification, sure, but still true.
Posted by: Scotso the Lawbot at September 17, 2008 01:43 PM