Best columns: Cool-hand Hank, Holding fast

Paulson’s big gamble

Treasury Secretary Hank Paulson “knows when to hold ’em and when to fold ’em,” says Steven Pearlstein in The Washington Post. When Wall Street banks said they wouldn’t buy Lehman Brothers without a government safety net, he called their bluff. And his gamble that Lehman’s collapse won’t cause a market meltdown will look like a stroke of genius if yesterday’s 504-point drop in the Dow Jones Industrial Average isn’t “followed by another and another.” So far, given the magnitude yesterday’s news, the trading has been “remarkably orderly.” But if the steep losses weren’t a one-day event, “Paulson’s gamble was a foolish one,” and it would have been better “putting a bit more of taxpayer funds at risk.”

Lehman and you

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“When an institution of Lehman’s size and clout goes under,” says Jonathan Burton in MarketWatch, “it’s understandable to wonder if your money is safe.” The answer is “in a word, yes,” but this is still a good time to remember that when it comes to crises like this, “perspective, not panic, is in order.” Several investing veterans suggest sitting out the market for the next few days. The U.S. stock market is now down about 25 percent since its peak last October, but it almost certainly has farther to fall. Avoid, or proceed very cautiously with buying financial stocks, and if you’re going to sell, sell slowly. “Now is not the time to overhaul your investment portfolio.”