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Posted
Sep 01 2009, 06:26 PM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
When the century-old investment bank Lehman Brothers collapsed a year ago, it spawned not just a global financial firestorm but a cottage industry of insider accounts of where it all went wrong. Three major books have been published and more are on the way -- each proposing to tell us the darkest secrets of the world's worst-run brokerage. (My take on it: New column.)
Any endeavor that pits Type A personalities against each other in a battle for control of the public discourse is bound to be competitive, and one like this in which reputations are at stake will naturally be especially fierce. That makes the effort by Lawrence G. McDonald, a former vice president at Lehman, particularly compelling, as he was first out of the gate.
In a late-night conversation from his vacation in Paris, the former fixed-income trader told me that the book, "A Colossal Failure of Common Sense," took him and co-author Patrick Robinson one hundred and seventy-three 17-hour days to research and write -- including Christmas and New Year's. Not that anyone's counting. Because he was first off the starting line with a publishing contract and a plan, he managed to grab co-workers for interviews "at a golden moment of frustration," he says, a time when they wanted the bad apples at Lehman exposed. The bottom line is about what you'd imagine: An overmatched boss failed to listen to smarter underlings and drove the company into the ground. The details are amazing, which makes the read compelling even if you feel you know the whole story already.
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Posted
Feb 02 2009, 03:05 AM
by
Bernhard Warner and Matthew Yeomans
Rating:
Money Blog: Top Stocks Blog - MSN Money
This post comes from partner site The Big Money.
All eyes are on Washington as President Obama's $819 billion stimulus package makes its way through the Senate this week after being passed by the House Wednesday. Continuing its focus on executive pay, the Wall Street Journal takes a look at potential compensation restrictions for firms that receive government aid. Details of the restrictions, and the rescue package as a whole, are expected to be announced later this week by Treasury Secretary Timothy Geithner. "It won't be easy to upend a compensation system that is woven into the fabric of the U.S. financial system. Many Wall Street employees work under employment contracts that can't be unwound," the Journal reports. The government is also considering splitting off the Troubled Asset Relief Program from the Treasury in an effort to improve public perception of the program.
There is growing support among senators for added provisions to the package that would directly help homeowners avoid foreclosure
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Posted
Jul 03 2008, 10:23 AM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
In an unusual move, Lehman Brothers decided to try and engender some employee goodwill by handing out a mid-year bonus. Unfortunately, it was in stock. Worse still, it was in Lehman stock.
Now before you go and assume that this is a bad idea because Lehman stock has been so badly beaten up, let's be clear -- this is bad for a whole lot of reasons. And instead of getting hung up on minutiae like whether it's really an incentive when you're handing out shares of a plummeting stock, think about what this says about the bigger picture at Lehman.
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Posted
Sep 16 2008, 11:07 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
A $36 Nalgene water bottle? Sure, if it has the words "Lehman Brothers" on it. That and other Lehman goodies are seeing brisk sales on eBay today.
"Dick Fuld told me this brand new, never used bottle is unbreakable, but he also said that about our mortgage business 2 months ago," writes the seller, who claims to have worked there for half of a career and bought stock at an average weighted price of $45. "Caveat Emptor, I guess."
Other collectible Lehman items for the bitterly nostalgic, or nostalgically bitter?
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Posted
Sep 16 2008, 03:15 PM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Since when do we rely on government to intervene in every case of a failing business? If anyone wonders why we have such a mess on our hands, look no further than our boneheaded government that has obviously forgotten its way. Think of this week's action within the financial markets as a result, not the cause of our problems.
AIG is in a battle for its very existence, Merrill has been absorbed and Lehman is bankrupt. And we're only part way through the week. What's next?
These days, many people are wondering what our government will do to stop the insanity. Yet, in a capitalistic society that relies on a free market system, we should only look to the government to guide and regulate against fraud and the manipulation of the system. Sometimes known as a laissez-faire philosophy, the government has a role, but it
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Posted
Jun 13 2008, 07:46 AM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
Lehman Brothers sent another "feel-good" letter to their clients that hold positions in Lehman sponsored partnerships. This isn't the first of these smokescreens that Lehman published in an attempt to take our eyes off of the real problems. Is it me or is it terribly concerning how gullible many of these companies believe that we are? I still have not hear an apology for the blatant and disrespectful lies misinformation that was promoted by the overzealous PR team over at Lehman HQ.
Below is the June 11 letter and my comments....
LEHMAN BROTHERS
399 PARK AVENUE, NEW YORK NY 10022 TELEPHONE (212) 526-0977 FACSIMILE (646) 758-4269
MICHAEL J. ODRICH, MANAGING DIRECTOR, HEAD OF PRIVATE EQUITY
Dear Partner:
As the second quarter comes to a close, financial markets remain under stress. Actions taken by the Federal Reserve have provided additional stability for capital markets, although the operatin
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Posted
Aug 19 2008, 10:45 PM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
It has been a tough time for shareholders that remain invested in financials and in particular, Lehman Brothers remains in the cross-fire. The main problem continues to be the company's cavalier attitude and total disregard for their shareholder's net worth. Unfortunately, the latest finding estimates another $4 billion of potential write-downs for the quarter and is just one more in the long list of the obscene losses plaguing this once respected company. Aside from the obvious financial problems, Lehman has a continuing PR debacle created out of an obstinate attitude and a general feeling of indestructibility. At this point, I can't decide if it is either a case of a total disconnect from reality or the notion that they have a guardian angel promising a safety net. Why else would they continue to be so reckless with their announcement and why would they be so insistent on hiding the real story from shareholders?
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Posted
Sep 26 2008, 11:48 AM
by
Anthony Mirhaydari
Rating:
Money Blog: Top Stocks Blog - MSN Money
With everyone comparing the current economic crisis to the Great Depression, I'm struck by the similarities to the Panic of 1907. Courtesy of derivatives expert Satyajit Das, take a look at the following except from the Economist:
"...public credit depends on public confidence…The financial crisis in America is really a moral crisis, caused by the series of proofs …that the leading financiers who control banks, trust companies and industrial corporations are often imprudent, and not seldom dishonest. They have mismanaged…funds and used them freely for speculative purposes. Hence the alarm of depositors and a general collapse of credit…"
These words were written on November 2, 1907
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Posted
Aug 18 2008, 06:57 PM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
We've seen a lot of wild things in the stock market over the past few years. Homebuilders have completely crashed and burned, banks and other financial companies are treading water at best, retail stocks have been punished, and the dollar has been in freefall. And all this while commodities from gold to wheat to oil have been skyrocketing.
But it may get just a bit wilder now that whole scenario has been flipped on its head. Financials have had fitful rallies, the dollar is showing some definite life, and oil has been sliding. While this could lead to a number of different outcomes, on The Motley Fool's CAPS service CAPS blogger RVAspeculator thinks that this turn of events is delivering a sucker punch to some hedge funds and Wall Street trading desks.
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Posted
Dec 24 2008, 02:55 AM
by
Bernhard Warner and Matthew Yeomans
Rating:
Money Blog: Top Stocks Blog - MSN Money
This post comes from partner site The Big Money.
The grisly discovery of yesterday’s suicide by U.S.-based French banker Thierry Magon de La Villehuchet—co-founder of Access International Advisors who may have incurred as much as $1.5 billion in Madoff-related losses—features prominently in a number of business publications today. But behind that story, new details continue to emerge. The European fallout includes Union Bancaire Privée, a private Swiss bank with $700 million of client money invested. The New York Times reports that representatives of UBP met with Madoff as recently as Nov. 25. The Wall Street Journal has Vienna-based Bank Medici as one of the most exposed European banks, with around $2.1 billion invested with Madoff. The Journal strings together a number of recent findings and suspicions to paint a fuller back story of the missed opportunities to catch the alleged fraud before it swallowed so many investments. The Journal says that “in 1991, a consultant hired to review a corporation's investments with Mr. Madoff made in the late 1980s grew suspicious about his returns.” And the deceit was reportedly quite transparent: “Mr. Madoff claimed to have traded more options than had been traded in the entire market on a given day, meaning his strategy would have been impossible to execute. That pattern was apparent on client statements from as recently as 2006, meaning Mr. Madoff had been making the same improbable claims to his investors for at least 17 years.”
Who’s at fault? A couple of interviews result in the expected finger-pointing. The Financial Times has Bill Brodsky, head of the Chicago board Options Exchange, saying that “inspector-level SEC staff had not received enough training to enable them sufficiently to check for fraud.” The target for much of the reproach, outgoing SEC Chairman Christopher Cox, offers an interview to the Washington Post. He’s proud of SEC’s enforcement record, so don’t expect any Madoff-related second thoughts yet: “That's why Madoff is such a big
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