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Economy
In reply to the discussion: STOCK MARKET WATCH -- Friday, 11 May 2012 [View all]Demeter
(85,373 posts)77. Lehman E-Mails Show Wall Street Arrogance Led to the Fall
http://www.bloomberg.com/news/2012-05-06/lehman-e-mails-show-wall-street-arrogance-led-to-the-fall.html
If one wants to understand the full complicity of Wall Street in the Great Recession, look no further than the voluminous package of pre-collapse Lehman Brothers documents that have been made available by the law firm Jenner & Block LLP, which has acted as the coroner in the Lehman post-mortem.
Most important, the cache dispels the myth that Dick Fuld, chief executive officer of Lehman Brothers Holdings Inc., and his close associates were unaware of the risks their business faced in 2007 and 2008. That would be bad enough, but the more devastating reality is that Fuld and his sycophants were warned repeatedly but were blinded by their hubris.
The records confirm, yet again, that the forces-out-of- our-control argument we hear from Wall Street leaders is bunk. It is the ill-advised behavior of one banker after another, day in and day out, that leads to the sort of devastating financial crisis we are only now emerging from.
For instance, at a Lehman board meeting in September 2007, according to a copy of the presentation in the data cache, Lehman executives presented a clear summary of the brewing crisis. The initial tremors were felt at the end of 2006, the board was told, when the poor loan performance of sub- prime borrowers began to be a cause for concern in the marketplace. This was evidenced by a gradual spread widening in the asset backed index. The presentation continued: The market continued to widen as it became apparent that the performance problems in mortgage loans was not going to abate and was no longer limited to the sub-prime market but also affecting the Alt-A product.
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If one wants to understand the full complicity of Wall Street in the Great Recession, look no further than the voluminous package of pre-collapse Lehman Brothers documents that have been made available by the law firm Jenner & Block LLP, which has acted as the coroner in the Lehman post-mortem.
Most important, the cache dispels the myth that Dick Fuld, chief executive officer of Lehman Brothers Holdings Inc., and his close associates were unaware of the risks their business faced in 2007 and 2008. That would be bad enough, but the more devastating reality is that Fuld and his sycophants were warned repeatedly but were blinded by their hubris.
The records confirm, yet again, that the forces-out-of- our-control argument we hear from Wall Street leaders is bunk. It is the ill-advised behavior of one banker after another, day in and day out, that leads to the sort of devastating financial crisis we are only now emerging from.
For instance, at a Lehman board meeting in September 2007, according to a copy of the presentation in the data cache, Lehman executives presented a clear summary of the brewing crisis. The initial tremors were felt at the end of 2006, the board was told, when the poor loan performance of sub- prime borrowers began to be a cause for concern in the marketplace. This was evidenced by a gradual spread widening in the asset backed index. The presentation continued: The market continued to widen as it became apparent that the performance problems in mortgage loans was not going to abate and was no longer limited to the sub-prime market but also affecting the Alt-A product.
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Gee, I wonder if this is related to the collapse of the crude speculation bubble?
Hugin
May 2012
#18
and, in the shadow of the Fed, a new era begins...Caesar's opens a new casino...
InkAddict
May 2012
#67
He'll feel better once Obama offers him the job at Treasury should he win in November
Roland99
May 2012
#53
I'm trying to advise folks around here to not go back to 'pesetas' ('pesos'). Rather: Maravedis:
Ghost Dog
May 2012
#101
I claim copyright violation! X, I WAS KIDDING! AND BESIDES, YOU DIDN'T WRITE IT!
Demeter
May 2012
#59
Regulators Looking Into JPMorgan Trading Activities Before $2 Billion Loss DITTO, DITTO
Demeter
May 2012
#79
JPMorgan Chase loss will be scrutinized, SEC's Mary Schapiro says DID WE WAKE YOU, MARY? SORRY...
Demeter
May 2012
#80
Watching Icon of the Left Eric Schneiderman Morph into Administration Water Boy Tom Miller
Demeter
May 2012
#83
Four Years After Wall Street Crash, Regulation of Financial Markets Is Still Spotty
Demeter
May 2012
#90