Another Lehman Blunder Coming Up?

Telegraph writer Ambrose Evans-Pritchard says the Fed risks repeating Lehman blunder as US recession storm gathers.

The key problem with Pritchard’s superficial analysis is the Lehman bankruptcy is about the only thing the Fed got right.

Pritchard for Fed Chairman

Pritchard calls Lehman a Fed failure.

Look at the result: Too big to fail is even bigger, toggle bonds and corporate borrowing are running rampant, no imbalances were fixed, QE is insane by any rational measure, and the Fed did nothing to rein in moral hazard risk taking.

The entire world would be much better off had not only Lehman gone under, but the entire banking system gone under.

Instead, banks are bigger than ever, corporate leverage is higher than ever, debt levels are higher than ever, and the global economy is setup for an even bigger collapse.

Hello Ambrose, this is what happens when you take moral hazard stances of bailing out failed corporations.

Ambrose should throw his hat into the ring to replace Janet Yellen when she retires. He would fit right in. At the first sign of any problem he would scream for more liquidity while bailing out failed financial institutions.

Meanwhile, it’s interesting to see the comments by Albert Edwards on GDI. Here are my thoughts: Real GDI, GPDI Recession Indicators Take II.