David Einhorn of Greenlight Capital got Lehman right on the short side, correctly identifying the fact that their balance sheet was a house of cards. He bears listening to. He also could brag all day long if he wanted. Instead, he gave a very thoughtful speech at a conference this week.
Since I'd like to think that we will all learn something from the financial near-Armageddon of the last two years, I'll highlight the following:
"We all lost when the authorities failed to insist that Lehman recognize its losses...The authorities did not want to be held responsible for intervening and causing losses to Lehman equity holders. Instead they waited and hoped...Hope is a nice human emotion but does not make for good public policy."