I was sitting in the big conference room the other day while the market was crashing and rolling and exploding in mid-air like some CGI Bruckheimer special effect. The dudes around the table were so heavy it’s a wonder we all didn’t fall through the floor and down on the heads of the folks a level below. The mood was somber, of course. “Down six,” one graybeard would say. “Down eight,” another would reply. I don’t know what metric they were talking about, but I didn’t want to. You don’t question faces like that.
The topic of that day was Merrill (MER) and Lehman (LEH). People were pretty shocked. “What’s going to happen to Morty?” One said to another. Morty is an analyst who everybody knows. Nobody knew. There was some consternation about the fact that, at that point, nobody wanted to buy Lehman. All that value and history, up in smoke. Too bad. So sad.
There was a silence around the table as everybody worked the BlackBerry. Then one of them murmured what was on everybody’s mind. “… and then there’s AIG,” he said. They all looked up. And their faces were white. Whiter than usual, even.
I don’t know much about economics, really, certainly not as much as the MIT risk analysts who got us all into this mess in the first place, or the prognosticators who didn’t see it coming, or the specialists on the Street who are thanking their lucky stars that windows in this day and age are hermetically sealed. But I do know that today’s news that the Fed is rescuing AIG (AIG) is very welcome.
I know there are critics who say that bailouts reward bad behavior. I imagine there are a lot of experts who could tell you why this is unwise in the long run and all that. But Armageddon has been forestalled for at least one more day. I appreciate that, don’t you?