While some argued whether the glass was half empty or half full at Lehman Brothers
According to The Wall Street Journal, Lehman moved $2.8 billion in difficult-to-sell loans sitting on its books into a new conduit cleverly named "Freedom."
Despite being viewed as toxic waste by the rest of the market, rating agencies including Moody's
While the Fed's new actions to help struggling investment banks such as Lehman are last-ditch attempts at preventing another Bear Stearns
But I'm still reluctant to assume repackaging loans and using Fed chief Ben Bernanke's coffers to plug a hole will save these sinking ships.
For starters, I've begun taking credit ratings with a grain of salt. After Ambac
Deja vu all over again
Now you've got an interesting situation: shaky assets being used as collateral to take on more debt. Sound familiar? That's how the credit crunch started in the first place. Regardless of who takes claim to the assets -- a bank, hedge fund, individual investor, or the Federal Reserve itself -- loans made under assumptions out of Fantasyland still bear a tremendous amount of risk.
The flip side of the coin is, of course, Bernanke sitting back and doing nothing, letting some financial firms teeter on the brink of collapse. Nobody wants that to happen. Nonetheless, Lehman -- or any other investment firm taking the Fed up on its new lending facilities -- is hardly out of the woods.
The Fed's moves may provide precious time for the bond market to recover, but in due time the music may stop for good, making sore losers of those who rely on the value of these loans in an expensive game of musical chairs.
Fool contributor Morgan Housel doesn't own shares in any companies mentioned in this article. He appreciates your questions, comments, and complaints. The Fool's disclosure policy is all about investors writing for investors.