“AT LAST…”

9/15/08

This morning one of my more enthusiastic Finance students at Columbia College-Chicago sent me an e-mail asking my thoughts on the Lehman situation. Since today is a very busy day on a number of fronts, and hence I don’t have time to put up a more extensive commentary, I thought I’d post my reply to him as an abbreviated, and perhaps “for the time being,” reflection on Lehman, et. al.:



9/15/08

Hi Travis,

I am delighted that you are thinking and asking about things like this; perhaps I have planted a seed or perhaps you are just a very bright guy who follows things that have an impact on his world.

As you might guess, this morning is a busy one for one who makes his living trading, so I will have to encapsulate my thoughts. The punch line is that I am DELIGHTED that the "free market" Bush administration has finally let one of these financial behemoths go. This is a necessary FIRST step in resolving the difficulties born of too much debt and reckless disregard of risk. We are far from out of the woods, but at least we are not stepping deeper into them, as we have been doing up until now.

I will probably put up something more extensive on my blog

http://insightfulpontificator.blogspot.com/

tomorrow. For today, I will hopefully take some huge profits from my put positions (i.e., bets that the markets will go down) before heading out to NIU for a day of teaching. This is not a good day to be away from the desk, but duty calls.

I may put this response up on my blog, come to think of it.

Thanks, Travis.