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It's been two years since Lehman Bros. failed (Sept. 15, 2008) and we still can't conclusively answer this question: What if the government had saved Lehman? Its bankruptcy was pivotal. Until then, deteriorating housing and mortgage markets had triggered what seemed a serious — but not unprecedented — recession. Once Lehman failed, the economy went into a frenzied free fall. It's hard not to wonder whether some of the ensuing turmoil could have been avoided. Consider what happened after Lehman: • Credit tightened. Banks wouldn't lend to each other, except at exorbitant interest rates. Rates on high-quality corporate bonds went...

Russia proposed to China that the two nations should sell Fannie Mae and Freddie Mac bonds in 2008 to force the US government to bail out the giant mortgage-finance companies, former US Treasury secretary Hank Paulson has claimed. The allegation is in his memoir On the Brink in which he also suggests that Alistair Darling, the UK chancellor, blocked a rescue takeover of Lehman Brothers by Barclays Bank when he refused to support special treatment by UK regulators. “Russian officials had made a top-level approach to the Chinese, suggesting that together they might sell big chunks of their GSE holdings...

Paulson: Crazy Putin Pushed China To Dump Fannie Bonds And Crush The U.S. Financial System Vincent Fernando | Jan. 29, 2010, 9:59 AM | 3,478 | comment 32 Tags: Economy, Markets, China, Credit Crisis, Politics Some scary details have emerged from Hank Paulson's memoirs. Allegedly, it appears Russia may have tried to conspire with China in a bid to collapse the U.S. financial system. They were hoping to sell Fannie and Freddie bonds during a time when the U.S. economy was on the ropes. This happened back around the Beijing Olympics, when the U.S. was supporting Georgia against Russia in...

Almost two years after the mortgage crisis and stock market crash, no one seems to wonder about the “September surprise” that shifted the 2008 presidential election to an unknown leftist politician who had been elected to the Senate only two years before. A pulp-fiction writer could hardly have created a more contrived and bizarre story. But this was not make-believe. No, it is now our own gritty reality show that we only wish we could turn off. The week of Sept. 15, 2008, was a debacle of huge proportions. On Monday, Lehman Brothers filed for bankruptcy while other lending institutions...

I’ve gone through only the first day of testimony from the AIG bailout trial, and we are already up to our third bombshell. The first witness called by the plaintiff, Starr International (an investment vehicle controlled by Hank Greenberg), was Scott Alvarez, general counsel for the Federal Reserve Board of Governors. Part of the testimony covered a discussion that took place late in the evening of September 15, the day Lehman declared bankruptcy in the wee hours of the morning. The topic was AIG. The participants included Alvarez, Timothy Geithner, Fed governors Don Kohn and Kevin Warsh, Ken Wilson, a...

Obama's cconomic narrative of the mortgage crisis gnores the facts. He has put free-market capitalism at the root of the current mortgage industry debacle, denying the real history of government interference in that market. On September 15, with banking giant Lehman Brothers filing for bankruptcy protection, Obama was given the opening to begin weaving his anti-capitalist storyline. And that he did. Artfully blurring the mortgage industry crisis with generalized tax policy, Obama declared, "I certainly don't fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to. It's a philosophy we've had for the last...

Pajamas Media gives an exclusive look at an analysis prepared for the Department of Defense’s Irregular Warfare Support Program (IWSP) by Cross Consulting and Services in 2009 that alleges that the economic meltdown in 2008 was no accident. Kevin Freeman argued that a run-up of speculation by sovereign-wealth funds created a bubble in the oil industry that allowed bear raids on American financial institutions, using credit swaps and other non-regulated investment instruments to crash the US financial system. Bill Gertz reported on the analysis today for the Washington Times: Evidence outlined in a Pentagon contractor report suggests that financial subversion...

With the Kanjorski Meme still spreading (see Ben Smith, Andrew Leonard, Moldbug, and more), I think I'm finally able to squash it with some hard figures: there never was a $500 billion outflow from any asset class in the space of a couple of hours or even weeks, and the Fed never shut down or froze any money-market accounts. This is not the first time that Kanjorski has made these allegations. But first, it's worth going through the timeline. On September 15, Lehman Brothers failed. The Reserve fund -- which was $64 billion that morning, and which had a substantial...

Full Title: "Did China or Jihadists try to bankrupt America? Pentagon report reveals financial terrorists may have triggered economic crash" Terrorists and other 'financial enemies' were likely responsible for the near collapse of the U.S. financial system in 2008, a new Pentagon report has concluded. The 2009 report, Economic Warfare: Risks and Responses, said financial terrorism by Jihadists or countries such as China may have cost the global economy $50 trillion in a series of co-ordinated strikes against the U.S. economy. In an astonishing conclusion, the report claims two unidentified traders deliberately devalued trillions of dollars' worth of stocks at...

The Obama campaign’s Muslim outreach director participated in a meeting in mid September that was attended by several controversial Muslim activists, NBC News has learned. The Obama campaign now concedes that was a misjudgment, and that its top Muslim staffer would not have attended the meeting if she had known the full participant list beforehand. “Would a campaign staffer have attended if they were aware of the complete list of attendees? No,” said Obama spokesman Ben LaBolt in an email statement to NBC. The Muslim outreach meeting On September 15, newly named Muslim outreach director Minha Husaini spoke to a...

GEORGIA CONFLICT 2008 SEPTEMBER 13, 2008 - Russians withdraw from Poti At long last, and after much negotiation and foot dragging by the Russians, hundreds of Russian personnel withdrew from positions Saturday in western Georgia and Georgian officials indicated that Russia met a deadline for a partial pullout agreed to with French President Sarkozy. Russian soldiers and armored vehicles withdrew from six checkpoints and temporary bases in the Black Sea port of Poti and other areas nearby, Georgian Security Council chief Alexander Lomaia said. "They have fulfilled the commitment" to withdraw from the area by Sept. 15 under an...