The government (in)famously did not provide a rescue loan to Lehman. The Fed did, however, lend substantially to the firm dealer subsidiary. @ayogeorge.bsky.social & I have a new case study on this intervention, which also squares that apparent inconsistency. In the Journal of Financial Crises:

You guys keep wanting to touch the stove. I'm telling you we can't touch the stove. What we can do is recreate it. We recreate stove touching in the aggregate.

Fiscal discipline, government accountability, and a focus on quality of services I believe they call this pragmatic progressivism

Nothing more politically sensitive in restructuring than establishing a hierarchy of claims. Also nothing more important to the success of the process. www.chicagobusiness.com/opinion/chic...

2/ This quote from Jim Millstein — the Treasury's chief restructuring officer in the aftermath of the financial crisis — gets at the meat of the issue. Too often, the ratings agencies are considered as an afterthought, rather than a first-order constraint:

From myself and @stevenkelly49.bsky.social, a policy note on the benefits of early consideration of ratings agency responses during crisis interventions: som.yale.edu/story/2025/r...

Die Hard is indeed a Christmas movie, but It’s a Wonderful Life is a Financial Stability movie and A Christmas Story is a film about Reflationary Military Keynesianism.

Steven Kelly, Associate Director of Research at Yale Program on Financial Stability, on the Fed portfolio, bills, and matching maturity to outstanding Treasury debt. Special thanks to Steve for gracing OMFIF with his thoughts and commentary. www.omfif.org/2024/12/the-...

Somalia and Ethiopia have agreed to work together to resolve their dispute over Somaliland.

If there's one thing Rhode Island loves to do, it's pass unfunded mandates: pass a law, make a policy and don't give anyone any money to make it happen. Spent a couple months reading through the general laws to find these, here's what I found: ecori.org/im-just-a-bi...

This is a huge reason why RI needs lots of housing with easy access to the train to absorb these folks.

US Sen. Jack Reed posted this photo noting that his predecessor Claiborne Pell was born 106 years ago today. Since 1936, just three men have held RI's Class II US Senate seat: Reed, Pell, and T.F. Green.

NEW: Providence is facing a potential financial crisis after losing a funding battle with the school system. What's going on and what could it mean for you? Here's my explainer: www.bostonglobe.com/2024/11/19/m...