I would asppreciate a good post from an Eph Economist on the state of our economy, and the reasons we are seeing so many banks go under.

See David’s response above for an assessment on the economy. As to the second part of your question: long story short, banks depend on borrowed funds to keep things going swimmingly.

In the case of commercial banks, most of these funds come from customer deposits. Commercial banks will also depend on borrowing money through short-term lending, but worst-case, they have customer deposits to fall back on. They simply stop lending money and effect “lend” money to themselves.

In the case of investment banks with no customer deposits (not in the traditional “bank” sense anyway), these parties depend on their creditworthiness and market confidence to continue borrowing short-term funds to fund longer-term investments. Hence the rub.

If customers make a run on a commercial bank, which we’ve certainly seen, then they’re basically SOL. If markets cease buying an investment bank’s debt, it’s basically SOL. That’s what we saw with Bear Stearns, except Uncle Sam stepped in and risked taxpayer dollars to keep it from Chapter 11. Lehman was not quite as lucky, as the government refused to back any deals to buy up Lehman.

Lehman filed for Chapter 11, which allows it to continue its operations. If Lehman had filed for Chapter 7, then it would shut its doors and cease business operations.

No doubt there will be significant layoffs, but there will be quite a few left behind, at least in the short run.

2) As to PTC question, we are in a recession. How bad will it be and how long will it last? I don’t know.

It seems that FDR was somewhat unwilling to run for NY Governor in 1928 largely due to his interests/investment in Warm Springs. It was only after strong appeals from the Dem. Party and Lehman himself agreeing to serve as Lt. Gov. (and shoulder most of the burden of governing) that FDR agreed.

It’s clear that FDR planned to run eventually, but it’s not clear when or how successful he’d have been if he waited. So if you like the New Deal, you can, in a sense, thank an Eph for that too.

Source. See pg. 104/105

I would asppreciate a good post from an Eph Economist on the state of our economy, and the reasons we are seeing so many banks go under.

I was thinking of Lehman Hall recently, after seeing it in a photograph taken looking through one of the new buildings — such an appealing, human-scaled structure. I am glad that it was not taken down in the new construction zeal.

And in the midst of all the fiddling while Rome burns that’s going on in some of the other threads, how refreshing to read of admirable Gov. Lehman — an authentic leader and someone ready and able to serve in so many capacities.

Mostly my thoughts are with those who must deal with devastation this morning, on Wall Street, Main Street, and the Gulf. May we be blessed with wise and capable leaders who can help us to get through what lies ahead and regain so much that is lost or lies in peril.

As if one Broadband comment isn’t enough.

The beginning of the end of these psychopaths that bleed our country.

We need reorganization of our financial predators.

Sic Transit Gloria Mundi, for the country, for country first is what we demand.

Much appreciated.

Thank you for a great story on an American institution!

Unbelievable to think of them passing into a history they were so much a part of making.

Dick Swart

Lovely tribute for a remarkable man & family.

A really terrific post. Thank you.