All it took was a single anonymously sourced report Tuesday to send Lehman Brothers down about 50% in 15 minutes. This proves two things, writes Michael Lewis: The market is jittery, and “Lehman Brothers is doomed.” The big bank’s fate is sealed in part “because it still owns all sorts of crappy assets at inflated prices,” but also because people are enjoying watching its downfall.
"The pleasure and interest the markets take in seeing it fail," Lewis writes for Bloomberg, "now exceed their pleasure and interest in seeing it survive." Once, the many people intertwined with Lehman might have tried to rescue or advise the firm. But after the Bear Stearns bailout, everyone is content to grab some popcorn and wait for the Federal Reserve to return their money, re-insure their defaults, and take those crappy assets off the market. The Bear bailout solved nothing. “It’s merely thrown the crisis into slow motion and prolonged the agony.”