Yes, I am happy Lehman Brothers went bankrupt.  No, it is not because I like to see failure or had a personal grudge against Lehman Brothers, but because it shows the country is waking up and noticing the extent of the economic damage. 

We, or more accurately the government, are finally allowing capitalism to work.  Our recent foray into socialism (Bear Sterns/Freddie/Fannie bailouts) has allowed the culprits to cover up their failures, save their money (ours is being spent to save their money) and prolong the economic downturn.  All of this was very reminiscent of how Japan tried to save their banks in the early 90’s.  Fifteen years later Japan is still stagnate, because they did not let the weak/poorly run businesses/banks fail.

I am not saying this is the beginning of economic recovery, in that the economy/stock market will start to rise.  In fact, I expect it to continue to decline and it may drop fairly far.  I completely expect to see further bankruptcies, or at the very least a lot of dirty laundry being aired by financial companies that pounds their stocks. 

By allowing Lehman to go bankrupt the government is signaling they will not be there to bail everyone out, and they may not be there for anyone in the future.  This will force the banks/investment firms to make the hard choices they have been putting off, and speed up the end of the down cycle. 

So, be wary, but know the blood in the street is a good thing for the economy.

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Note:  AIG maybe next.