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December 2, 2008 8:34:29 PM CST

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Credit Crisis at Tipping Point

Posted Sep 12, 08 9:29 AM CDT in Opinion,  Business 

(Newser) – The federal government keeps taking aggressive steps to keep the markets from flying off the rails, and yet here we are again: facing another crisis and wondering how much intervention is necessary, the Wall Street Journal reports. With government intervention showing signs of strain amid entrenched economic problems, the crisis might be entering a key stage. "It's not improving even slowly," says Laurence Meyer, a former Fed governor, now vice chairman of an economic-forecasting firm.

"You could argue that you should let Lehman go," said another former Fed official who faced a similar dilemma a decade ago on an international scale. "Everyone knows it's been on the ropes since May. It wouldn't shock the market." But rescuing it could prevent more "chaos" in the market, he said, and help avoid a similar intervention in the future. Sound familiar? 

Source Wall Street Journal

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Lehman Brothers headquarters, in Manhattan.   (AP Photo/Jin Lee)
A Washington Mutual branch is shown in Palo Alto, Calif., Thursday, Sept. 11, 2008.   (AP Photo)
In this 2007 file photo, people arrive at the Merrill Lynch building on a rainy morning in New York.   (AP Photo)
In this July file photo, Federal Reserve Chairman Ben Bernanke testifies before the House Financial Services Committee hearing on Capitol Hill in Washington.   (AP Photo)
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