Tuesday, October 6, 2015

2008 CRISIS | Fed Couldn't Save Lehman, Says Bernanke

Bernanke Says Now That Fed Was Helpless.
In DealBook today, in the New York Times (p. B1) Andrew Ross Sorkin says:
Mr. Bernanke, in perhaps the most candid explanation of Lehman’s 2008 collapse, writes that he and Henry M. Paulson, then the treasury secretary, purposely obfuscated when asked about Lehman’s demise early on, allowing a narrative to develop that the government had purposely let the firm fail.
 Sorkin quotes from Bernanke's new book:
In congressional testimony immediately after Lehman’s collapse, Paulson and I were deliberately quite vague when discussing whether we could have saved Lehman. But we had agreed in advance to be vague because we were intensely concerned that acknowledging our inability to save Lehman would hurt market confidence and increase pressure on other vulnerable firms.
Pam and Russ Martens conclude that Bernanke is trying to "rewrite the financial crisis".