Lehman Brothers ex-CEO Wants Everyone To Know That It Was Everyone Else's Fault Lehman Failed

from the well-that's-convincing dept

At a public hearing of the Financial Crisis Inquiry Commission -- the group put together to investigate the Wall Street implosion of 2008 -- former Lehman Brothers' CEO, Dick Fuld, wants everyone to know that Lehman was not at fault in its failure. No, it turns out the problem was all of you. You didn't believe strongly enough in Lehman, and then the government didn't bail him out because of it. As the crew at Planet Money notes:
In fact, in 1,680 words of prepared testimony, Fuld devotes exactly 15 words to what Lehman did wrong. And those 15 words are immediately followed by an explanation of why Lehman's errors didn't contribute to the bankruptcy:
In retrospect, there is no question we made some poorly timed business decisions and investments, but we addressed those mistakes and got ourselves back to a strong equity position ... There is nothing about this profile that would indicate a bankrupt company.
Of course, part of his reasoning is that the government did proceed to bail out most of the other big Wall Street firms. However, just because the government decided to save those other guys, it doesn't mean that all of Wall Street didn't make some serious mistakes in creating their own downfall. In fact, a recent report from Planet Money and Pro Publica, that came out just last week, showed how ridiculous levels of self-dealing among banks not only prolonged the mess, but actually made the eventual impact much, much worse. Basically the banks created fake demand for the very worst parts of the mortgage-backed securities they were trying to sell, in order to keep on selling.

Reader Comments (rss)

(Flattened / Threaded)

  1. icon
    Dark Helmet (profile), Sep 2nd, 2010 @ 1:47pm

    Just an opinion, but...

    If you want to trace most of the horrific occurrences of today back to their roots, you probably ought to end up with international bankers and usery as the causes....

    reply to this | link to this | view in thread ]

  2. identicon
    Joseph, Sep 2nd, 2010 @ 2:06pm


    no accountability whatsoever. Similar to Greenspan and the book he recently wrote. I guess at least Greenspan had the courtesy to state during a deposition that his lifelong philosophy of deregulation had some massive flaws and wasn't the greatest solution. These guys are completely entitled, spoiled, and without a shred of remorse or accountability for what they did. Just keep blaming someone else, it's as American as apple pie.

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, Sep 2nd, 2010 @ 2:17pm

    Right on, Joseph. I'm waiting for the day when someone steps forward and says that it's the citizen's fault for loaning money. Conveniently forgetting that when the bailout happened, the people were loudly telling their elected representatives NO.

    reply to this | link to this | view in thread ]

  4. identicon
    Anonymous Coward, Sep 2nd, 2010 @ 2:27pm

    The bankers did what they wanted, abused the system but really abused the system and not just a little and still got not only a free pass but money in return.

    F. me those guy's are good.

    Auto-Tune the News: Bankers' Song - We Didn't See It Coming

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, Sep 2nd, 2010 @ 2:38pm

    Too big to fail and government backed to rip you off. Nice.

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, Sep 2nd, 2010 @ 2:45pm

    I see you driving 'round town
    With the money I love and I'm like,
    Fuck you!
    Oo, oo, ooo
    I guess the morgage in my pocket
    Wasn't enough I'm like,
    Fuck you!
    And fuck the bank too!
    I said, if I was richer, I'd still be with ya
    Ha, now ain't that some shit? (ain't that some shit?)
    And although there's pain in my chest
    I still wish you the best with a...
    Fuck you!
    Oo, oo, ooo

    Now I know, that I had to borrow,
    Beg and steal and lie and cheat.
    Trying to paid ya, trying to please ya.
    'Cause working with your ass ain't cheap.

    reply to this | link to this | view in thread ]

  7. identicon
    Anonymous Coward, Sep 2nd, 2010 @ 3:03pm

    Lehman's was the picture of morally bankrupt profiles though.

    reply to this | link to this | view in thread ]

  8. icon
    Josh in CharlotteNC (profile), Sep 2nd, 2010 @ 3:08pm

    Not quite black/white

    I don't think we can place all the blame for either the financial collapse, or even just Lehman Brothers collapse on Lehman's execs. That would be far too simplistic.

    I am NOT defending Dick Fuld or any Lehman exec. They did some extremely risky and stupid things and deserve to be grilled in front of these kinds of hearings. They were just as much a part of it as others, but they're not entirely to blame.

    Imagine if you could buy insurance on your neighbor's house...

    Credit Default Swaps - buying something akin to insurance that said if a firm went out of business, you got money. But there was no requirement you actually had to own any part of the firm.

    ... and then burn it to the ground. And get paid. With no consequences.

    Short selling - specifically naked short selling. Selling stock you don't own with the promise that you would have the stock in x number of days. Naked short selling where you haven't borrowed the stock that you're shorting. More short selling than actual demand drives the stock price down. But you fail to deliver the stock on the promised day, even though this is illegal in most circumstances, but nothing is ever done.

    reply to this | link to this | view in thread ]

  9. icon
    ofb2632 (profile), Sep 2nd, 2010 @ 3:19pm

    While i agree that Lehman died the way it should have, i also think that the banks that bought the parts of Lehman talked the government into letting Lehman fail for that exact purpose.

    So corrupt were/are the big banks that they found a way to prosper while we all suffer, even today.

    Every corporation that bought a piece of Lehman should have their board of directors imprisoned.

    reply to this | link to this | view in thread ]

  10. identicon
    Anonymous Coward, Sep 2nd, 2010 @ 3:51pm

    The Banker's Pen

    Don't forget about the collapse of Washington Mutual. At $327B it wasn't quite as messy as Lehman, partially because it was swallowed up overnight by JPMorgan.

    Remember the Banker's Pen ads?

    reply to this | link to this | view in thread ]

  11. identicon
    abc gum, Sep 2nd, 2010 @ 6:11pm

    Those banksters have no shame.

    reply to this | link to this | view in thread ]

  12. icon
    PrometheeFeu (profile), Sep 2nd, 2010 @ 9:08pm

    Well, the feds did bail out everyone else... Bear Sterns was a piece of crap. The Fed was kind enough to sift out the good parts, give those to JP Morgan and then eat the crappiest part of the crap. I can definitely understand the LB execs being a bit bitter about the whole thing. It's not like they were worst than the rest. It's just that Ben didn't like them as much. Honestly, I am disgusted by the fact that any of them got rescued.

    reply to this | link to this | view in thread ]

  13. identicon
    abc gum, Sep 2nd, 2010 @ 9:24pm


    What the hell do the execs care? They each got their hundreds of millions out of it.

    They ought to go crawl under a rock to count their ill gotten gains, but nooo - they have to taunt the angry crowd dont they.

    reply to this | link to this | view in thread ]

  14. icon
    BearGriz72 (profile), Sep 2nd, 2010 @ 10:45pm

    Anagrams Are Fun

    Richard Severin Fuld Jr = Darn Fredric Hurls Jive

    reply to this | link to this | view in thread ]

  15. identicon
    Anonymous Coward, Sep 2nd, 2010 @ 11:09pm

    Fraud Followed By Theft

    Collateralized Debt Obligations (CDOs) were fraud followed by theft. First a bunch of junk quality mortgages were collected into a pool. Then the pool was divided into tranches, with the most senior tranche fraudulently rated AAA, and sold to investors. Then a pile of defaults on the mortgages happen. Then the remaining money in the pool, instead of going to the AAA tranche, goes to the other tranches. That was theft. Then the AAA tranche gets rated as worthless and the investors lose 100% of their investment.

    The bad guys set this up absolutely deliberately, with full knowledge of how things were going to pan out. So far, none of the bad guys, including Dick Fuld, have gone to jail. Given the regulatory capture and political stupidity, it is unlikely that any of the bad guys will go to jail. Enjoy your losses, suckers.

    reply to this | link to this | view in thread ]

  16. icon
    Pickle Monger (profile), Sep 3rd, 2010 @ 7:28am

    Worst of the worst

    Dick Fuld is one greedy fella. The same thing that happened to Bear Sterns could have happened to Lehman Brothers but Dick Fuld preferred to wait (to the point of at one time missing a deadline for filing for bankruptcy) for the gouvernement to give him loads of cash. He thought he was special and deserved special treatment (still does, by the looks of this new testimony). He is the most shameless of all WS bankers and that says a lot!

    reply to this | link to this | view in thread ]

  17. icon
    Pete Braven (profile), Sep 3rd, 2010 @ 9:57am

    Re: Just an opinion, but...

    Here in the UK, we use the term 'banker' as an alternative to e 'W' word.
    It seems the two are pretty commonly one and the same individual.

    reply to this | link to this | view in thread ]

  18. icon
    The Devil's Coachman (profile), Sep 4th, 2010 @ 6:05am

    Where's my money, beeyotch?

    That's the only question Fuld and his bankster cronies need to answer, and yet to this day, they haven't. And they never will. Because it's quite obvious where it is - in their pockets. The peasants who let them steal their money will never get it back, and the banksters are laughing all the way to the bank, and washing their Bentleys with Dom Perignon.

    reply to this | link to this | view in thread ]

  19. icon
    Brendan (profile), Sep 4th, 2010 @ 10:52pm

    Re: Re: Just an opinion, but...

    W word = Witch?

    reply to this | link to this | view in thread ]

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