From TPM reader JS …
Nearly everything reader MH writes is, to greater or lesser degrees, incorrect. Might as well have been written by Vikram Pandit.
I don’t have time to get into this right now, but attached is a very good description of what went down in the fourth quarter of 2008, including a detailed account of exactly what happened after Lehman failed. Note that a lot of the CDS/counterparty issues were resolved over the weekend before they let LEH go, and that since then the Fed has put in place liquidity backstops that prevent many of the post-LEH consequences from recurring even in the event of another major bankruptcy. Taking the big money-center banks into receivership would indeed be an exceedingly complex task requiring considerable preparation, much of it done in secrecy. but it can be done.
Josh Marshall is editor and publisher of TalkingPointsMemo.com.