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this article on bloomberg.com is basically an advertisement for a book that was recently published, but it does include an interesting anecdote:
On the morning of June 7, 2005, some 45 traders and researchers gathered in a third-floor conference room at Lehman Brothers Holdings Inc. for a 7 o’clock briefing from Michael Gelband.
The global head of fixed income introduced himself and proceeded to drop a bombshell, writes Lawrence G. McDonald in “A Colossal Failure of Common Sense,” a scathing and sadly overheated inside account of how Lehman became a house divided that could not long stand.
“Mike said flatly that in his opinion the U.S. real-estate market was pumped up like an athlete on steroids,” says McDonald, a former Lehman vice president of distressed debt and convertible securities trading who says he was in the room that day.
This was not what Chief Executive Officer Richard S. Fuld Jr. wanted to hear.
[..]
Time and again, Fuld refused to heed compelling evidence gathered by his own staff that the U.S. real-estate market was living on borrowed time, McDonald says. By the end of 2007, Lehman’s liabilities had swelled to 44 times its worth.
And still, McDonald says, Fuld wouldn’t listen. McDonald says that Gelband, a member of the executive committee, pounded the table at one meeting that took place while Lehman was considering buying yet another hedge fund.
“This is going to be the granddaddy of all credit crunches,” Gelband shouted. “And you’re trying to buy into a giant global asset bubble.”
Fuld, true to form, later responded to Gelband’s concerns by bullying him.
“I don’t want you to tell me why we can’t,” Fuld told Gelband by this account. “I want you to be creative, and tell me how we can. You’re much too cautious.”
We don’t get Fuld’s side of the story in this book -- just page after page of his reported rants, threats and bad judgment with no rebuttal in sight.
cont.
http://www.bloomberg.com/apps/news?p...ef=patrick.net
The global head of fixed income introduced himself and proceeded to drop a bombshell, writes Lawrence G. McDonald in “A Colossal Failure of Common Sense,” a scathing and sadly overheated inside account of how Lehman became a house divided that could not long stand.
“Mike said flatly that in his opinion the U.S. real-estate market was pumped up like an athlete on steroids,” says McDonald, a former Lehman vice president of distressed debt and convertible securities trading who says he was in the room that day.
This was not what Chief Executive Officer Richard S. Fuld Jr. wanted to hear.
[..]
Time and again, Fuld refused to heed compelling evidence gathered by his own staff that the U.S. real-estate market was living on borrowed time, McDonald says. By the end of 2007, Lehman’s liabilities had swelled to 44 times its worth.
And still, McDonald says, Fuld wouldn’t listen. McDonald says that Gelband, a member of the executive committee, pounded the table at one meeting that took place while Lehman was considering buying yet another hedge fund.
“This is going to be the granddaddy of all credit crunches,” Gelband shouted. “And you’re trying to buy into a giant global asset bubble.”
Fuld, true to form, later responded to Gelband’s concerns by bullying him.
“I don’t want you to tell me why we can’t,” Fuld told Gelband by this account. “I want you to be creative, and tell me how we can. You’re much too cautious.”
We don’t get Fuld’s side of the story in this book -- just page after page of his reported rants, threats and bad judgment with no rebuttal in sight.
cont.
http://www.bloomberg.com/apps/news?p...ef=patrick.net
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