"But, Breakingviews wonders, as it really such a tragedy?"

More on Lehman being saved on the NY Times:

"Lehman’s bankruptcy may have been precisely the wake-up call that governments needed, according to the publication. It notes that the bank’s failure also terrified the banking industry so much that it was prepared to drink some pretty unpleasant medicine, though everything that the authorities have done has not been perfect.

The broad approach of stuffing the banks with capital and getting them off their addiction to short-term borrowing doesn’t just seem to have brought the immediate panic to an end. It is also helping to put the industry’s finances onto a healthier longer-term footing, it says

So, Breakingviews concludes, Lehman’s bankruptcy may not have been a ghastly error after all. It’s too early to be sure. But history may ultimately conclude it was more like a very lucky mistake."

Here's my reply:

“Lehman’s bankruptcy may have been precisely the wake-up call that governments needed, according to the publication. It notes that the bank’s failure also terrified the banking industry so much that it was prepared to drink some pretty unpleasant medicine, though everything that the authorities have done has not been perfect.”

No. Lehman caused a crisis because investors thought the implicit government guarantees to intervene might not be honored. I don’t like it, but had the governments not intervened this time, it would have caused a veritable meltdown, precisely because the banking industry was completely unprepared to deal with this crisis on its own.

— Posted by Don the libertarian Democrat