What has always mattered most to financial firms are base capital amounts and leverage. Plunging headlong into both residential and CRE funding in a mad dash for profits led to firm’s having too little of the former and too much of the latter. That, in the simplest of terms, is why Lehman died. Everything else written about the deceased is merely noise . .
With every crisis, it takes a while for all the analysis to occur and all of the theories to be advanced and examined. But sooner or later we reach a conclusion that fits the facts and the final words are written.