Tuesday, September 16, 2008

L'man's Demise

Starting the collapse of Lehman the stocks went tumbling down, on a roller-coaster drive, all around the world. Why should Fed play such a gamble and let one of the significant Financial Institution/Investment Banks die down to bankruptcy?
Finding out what changed since Bear-Sterns, may sort out the determination of Fed's Gamble.
- Inflation under control, at least in the US.
- Oil well below 100$.
- Dollar back in business against Euro/Yen.
- Lessened panic in commodities crisis of the last quarter.
- Enough time for Credit Mania and Financial turmoil to get factored-in.

Perhaps, Fed's decision to say NO was not such a bad Idea. In fact, it was a strong signal for other similar troubled financial firms that the only resort for them is to clean up their own mess, and not rely on "tax payer's money".

Moreover, after a sharp fall the stocks did stabilize. No-where to fall when you are already at the bottom.