On the Thursday before Lehman Brothers totally collapsed, the New York Fed was obviously feeling crazed and kind of helpless, the FCIC report reveals.Because they were clearly taking any and all advice they could get; they were even forwarding around an email from Louis Bacon, billionaire hedge funder and CEO of Moore Capital, about what to do.
He urged the fed to step in and do something, and sent an email to Hayley Boesky, a senior New York Fed official.
At 10:46 A.M, she then forwarded the email to other fed colleagues including senior Fed economist Meg McConnell and others. Bacon had entitled his email: “Options for short-circuiting the market.”
According to the FCIC, in the email the Moore Capital CEO,
Suggest[ed] the New York Fed could “attempt to stabilise or support the LEH situation” but noting that “none of the above will fix the funda- mental problem, which is too many bad assets that need to get off too many balance sheets.”
Obviously this is a tiny little section and paraphrasing of a much larger email not included in the report, and obviously they didn’t take Moore’s investment advice.