AIG, Citi and the other former behemoths of Wall Street embarked on a new strategy after the 1987 crash: become too big to fail. That worked, until it didn’t. The new strategy? Too messed-up to fail.
Only once assets are truly marked down to levels at which liquidity providers can comfortably commit capital will the crisis end, the bailout package have an impact and will recovery begin. Then maybe, someday, we’ll be liquid...