Sometimes the conventional wisdom is right!

William Sterling, "Looking Back at Lehman: An Empirical Analysis of the Financial Shock and the Effectiveness of Countermeasures."

My summary: John Taylor, John Cochrane, and Luigi Zingales say the Lehman Brothers catastrophe didn't cause the financial crisis of fall 2008 after all - instead, they say, it was Hank Paulsen saying there was a financial crisis, and that the government needed $750 billion to deal with it, and we can't tell you what we're going to use the money for. Their evidence is that LIBOR rates didn't move much after Lehman went under, spiking when Paulsen made his request. Sterling says - you dumb clucks, LIBOR data is drawn from surveys of how much banks say they charge each other for loans, not the observed rates on actual loans. In the days after the Lehman bankruptcy banks weren't lending to each other at all, hence LIBOR is meaningless. He reports the movements of the Bloomberg Financial Conditions Index, and lo and behold - well, just look at the graphs.