Brad DeLong pointed out that when they let Lehman go the funding market went haywire.
There is something like 30 billion in "other liabilities" (mostly debt) at WaMu. They let it fail too.
The credit market sieze up is just going to get a lot worse.
Its funny - the government with one hand passes out 700 billion to "free up the credit market" and at the other hand throws petrol on the flames.
I am surprised. It cost me money. But it was always a wild-ass-speculative bet.
I only wish I had done the arb of going long the preferred and short the common rigged so I made money on all outcomes.
But I did not. My bad.