The Devil's Casino (34 page)
Page 112
The complex mathematical equation proves
Fischer Black, “The Pricing of Options and Corporate Liabilities,”
Journal of Political Economy
81 (3): 637 – 654.
Page 116 ‘
Wounded’ Lehman Looks Like
Carl Gewirtz, “Asian Crisis Carries Seeds of New Trauma: Clouds and Silver Linings,”
New York Times
, June 15, 1998.
Page 117
At the end of the year
“Morgan Stanley, Lehman Beat Estimates,”
MarketWatch
, January 7, 1999.
Page 119
Fuld wanted Lehman’s stock price
“
CEO
Richard Fuld on Lehman Brothers’ Evolution from Internal Turmoil to Teamwork,” January 10, 2007, http://knowledge.wharton.upenn.edu/article.cfm?articleid=1631&specialid=61.
Page 122
The other overseas member
Jacqueline Simmons, “Former Lehman Bankers Isaacs, Nagioff Start Investment Firm,”
Bloomberg News
, December 8, 2008.
Page 136
Fuld asked Odrich to bring
Judith Messina, “40 under 40,”
Crain’s
, 2001.
Page 139
Lehman was slowly transforming itself
Taken from Lehman’s company literature.
Page 139
In 2000, to bolster
Ray A. Smith, “Prominent Wall Street Bear Calls It Quits,”
Wall Street Journal
, March 9, 2005.
Page 142
When American Airlines Flight 11
www.dronefone.com/wtc/wtc.html.
Page 148
At Gregory’s behest
Andrew Ross Sorkin,
Too Big to Fail: The Inside Story of How Wall Street Fought to Save the Financial System—and Themselves
(New York: Viking Penguin, 2009).
Page 149
It was more expensive
Lawrence G. McDonald,
A Colossal Failure of Common Sense
(New York: Crown Business, 2009), 214.
Page 151
Fuld was named one of
www.businessweek.com/magazine/content/02_02/b3765001.htm .
Page 153
By 2008, the firm had
Suzy Jagger, “No Federal Bailout of Lehman Brothers: The Free Ride Was Over for Financiers,”
Times of London
, September 16, 2008.
Page 154 (
Becker left Lehman that year,
Matthew Goldstein, “SEC’s Holly Becker Case Slowly Fades Away,” TheStreet.com, November 12, 2003.
Page 160
He had left Morgan Stanley
James Moore, “Morgan’s European Stars Head for the Exit,”
Telegraph
, UK, January 27, 2006.
Page 161
But Isaacs did not help himself
James Quinn, “From a Runner to a Mover and Shaker Starting Off as a Blue Button on the
LSE
, Jeremy Isaacs Now Holds One of the Top Jobs with Wall Street’s Largest Investment Banks,”
Telegraph
, UK, November 20, 2006.
Page 163
the magazine quoted only one
David Henry, “Cross-Dressing Securities,”
BusinessWeek
, March 12, 2006.
Page 163
A June 2007
Institutional Investor Pierre Paulden, “Alpha Female,”
Institutional Investor
, June 2007.
Page 163
Callan had the ideal blend
Much of the information in this section was first reported in two profiles of Callan published in spring 2008: Susanne Craig, “Lehman’s Straight Shooter,”
Wall Street Journal
, May 17, 2008, and Sheelah Kolhakatar, “Wall Street’s Most Powerful Woman,”
Portfolio
, March 17, 2008.
Page 164 (
In the Myers-Briggs typology
A pseudonymously authored memoir written by a former banker at the firm suggests the dearth of “feelers” at the firm might have been due to Gregory’s meddling with the Myers-Briggs test results. Joseph Tibman,
The Murder of Lehman Brothers
(New York: Brick Tower Press, 2009).
Page 164
In 2006 Lehman’s subprime
Bonnie Sinock, “Lehman, Market Trying to Find the Right Size,”
National Mortgage News
, September 10, 2007, and Yalman Onaran, “Lehman Brothers to Cut 1,300 Jobs in Mortgage Unit,”
Bloomberg
, January 17, 2008.
Page 165
Lehman Brothers, however,
The two most detailed chronicles of Mark Walsh’s extraordinary career at Lehman are Dana Rubinstein’s “Mark Walsh, Lehman’ s Unluckiest Gambler,”
New York Observer
, October 1, 2008, and Devin Leonard, “How Lehman Brothers Got Its Real Estate Fix,”
New York Times
, May 2, 2009.
Page 167
In October 2008, the French utility giant
Edvard Pettersson, “Lehman to Sell Eagle Energy Unit to
EDF
for $230.5 Million,”
Bloomberg
, October 1, 2008.
Page 169
We don’t have to wait
“Inflation Is ECB’s Biggest Challenge, Says Trichet,”
Financial Times
, January 25, 2008.
Page 169
Russo gave a speech to the G30
“Credit Crunch: Where Do We Stand?” www.group30.org/pubs_1401.
Page 170
The timing was so atrocious
Devin Leonard, “How Lehman Got Its Real Estate Fix,”
New York Times
, May 2, 2009.
Page 173
Meanwhile, Bear Stearns CEO
Kate Kelly, “Bear CEO’s Handling of Crisis Raises Issues,”
Wall Street Journal
, November 1, 2007.
Page 175
When the call was over
, Lehman Conference Call: Lehman Brothers Holdings Inc. (
LEH
) F1Q08 Earnings Call, March 18, 2008.
Page 176
On April 1, as Fuld dealt
“Lehman’s Fundraising,” www.cnbc.com/15840232?video=99975259&play=1.
Page 177
That would not be the case
Einhorn’s pubic campaign against Lehman’s accounting practices is chronicled in detail by Hugo Lindgren in “The Confidence Man,”
New York
, June 15, 2008. The text of Einhorn’s speech at the Ira W. Sohn Investment Research Conference is available on his web site (www.foolingsomepeople.com).
Page 178
In the Saturday edition
Susanne Craig, “Lehman’s Straight Shooter,”
Wall Street Journal
, May 17, 2008.
Page 179
But on June 4, three days
Susanne Craig, “Lehman Is Seeking Overseas Capital,”
Wall Street Journal
, June 4, 2008.
Page 180
The next morning, Sunday
McGee’s frustration with Gregory and his weekend visit to Fuld’s office were initially reported by Andrew Ross Sorkin in
Too Big to Fail: The Inside Story of How Wall Street Fought to Save the Financial System—and Themselves
(New York: Viking Penguin, 2009), 117 -118.
Page 180
McGee spoke first
D’ Angelin’s e-mail was made public as part of the House Oversight Committee’s investigation into the collapse of Lehman Brothers. In the Congressional Record it is titled “Lehman Brothers Email Regarding Lack of Accountability.”
Page 184
But that was before Fuld
Andrew Ross Sorkin,
Too Big to Fail: The Inside Story of How Wall Street Fought to Save the Financial System—and Themselves
(New York: Viking Penguin, 2009), 125-126.
Page 184
Later Callan would tell
Fortune Katie Benner, “I Was Lucky to Get Out,”
Fortune
, September 26, 2008.
Page 185
In a typical headline
, Sean Farrell, “Wall Street’s Leading Woman Pays the Price for Lehman’s Losses,”
London Independent
, June 13, 2008.
Page 186
The Tuesday following Gregory’s ouster
Lawrence McDonald and Patrick Robinson,
A Colossal Failure of Common Sense
(New York: Crown Business, 2009), 297.
Page 187
The eight specific tasks
“The Gameplan,” Lehman Brothers, September 2008.
Page 189
So, with the help of
“The Impact of Becoming a Bank,” Lehman Brothers, July 2008.
Page 191
There were also the sovereign wealth funds
“Citi, Merrill May Seek More from Sovereign Wealth Funds,”
Dow Jones
, January 14, 2008.
Page 191
Negotiations in the Middle East
The China Investment Corporation’s history of investing in American hedge funds and private equity firms was detailed by Jenny Strasburg and Rick Carew, “China Ready to Place Bets on Hedge Funds,”
Wall Street Journal
, June 19, 2009.
Page 192
Lehman took this seriously
Lehman’s demoralizing efforts to hammer out a deal with
KDB
were first reported in detail by Andrew Ross Sorkin,
Too Big to Fail: The Inside Story of How Wall Street Fought to Save the Financial System—and Themselves
(New York: Viking Penguin, 2009), 212-216.
Page 192
There were serious issues
Source: www.koreatimes.co.kr/www/news/nation/2008/10/123_32723.html .
Page 197
McGee said it had been rejected
But there were articles on September 3 saying that talks had been going on, for example: www.usatoday.com/money/economy/2008-09-02-3485407905_x.htm.
Page 198
Hours later, a
KDB
official
Gwen Robinson, “It’s Official: Lehman Takeover Story Now Out of Control,”
FT Alphaville
, September 10, 2008.
Page 200
Dimon had two disturbing conclusions:
The role of Jamie Dimon and JPMorgan Chase in Lehman’s daily operations and sudden collapse is addressed in greater detail in the Duff McDonald book
Last Man Standing
(New York: Simon & Schuster, 2009), 279-283, as well as Tom Junod, “The Deal of the Century,”
Esquire
, September 11, 2009.
Page 200
what had come to be known as
Andrew Ross Sorkin,
Too Big to Fail: The Inside Story of How Wall Street Fought to Save the Financial System—and Themselves
(New York: Viking Penguin, 2009), 23.
Page 201
On September 10 at 8 A.M
. Transcript, Lehman Conference Call: Lehman Brothers Holdings Inc. (
LEH
) F3Q08, September 10, 2008.
Page 203
As the
Wall Street Journal
later reported
“The Two Faces of Lehman’s Fall,”
Wall Street Journal
, October 6, 2008.
Page 206
the
FSA
would not waive
Katherine Griffiths, “Lehman, Barclays and the Countdown to Financial Crisis,” September 12, 2009, http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6831518.ece .
Page 207
And Bank of America was a particular thorn
Sorkin,
Too Big to Fail
.
Page 207
Eventually, she said to him
Ibid., 299.
Page 208
Even so, Paulson had reportedly said
Griffiths, “Lehman, Barclays.”
Page 215
It listed $613 billion
www.numerix.com/uploads/files/InTheNews/SRP_Lehman_Unwind.pdf.
Page 219
JPMorgan
CEO
Jamie Dimon
The letter was posted on the Internet on October 17, 2009, by the blog ZeroHedge under the headline “A Rare Glimpse Inside the Fed’s Discount Window Courtesy of the Brewing Lehman-Barclays Scandal”: www.zerohedge.com/article/rare-glimpse-feds-discount-window-courtesy-brewing-lehman-barclays-scandal.
Page 221
He saved more than 10,000 jobs
“Tension Simmers at Nomura as Lehman Bonuses Loom,”
New York Times
, March 27, 2009.
Page 226
Within a year Lloyd Blankfein
John Arlidge, “I’ m Doing ‘God’s Work’: Meet Mr. Goldman Sachs,”
Times of London
, November 8, 2009.
Page 230
In early April 2009
Susanne Craig, “Lehman Brothers’ Dick Fuld has a New Gig,”
Wall Street Journal
, April 3, 2009.
Page 230
Reportedly, he sold his seven-acre estate
Sushil Cheema,
Wall Street Journal
, November 13, 2009, http://blogs.wsj.com/developments/2009/11/13/friday-diversion-axl-roses-house-sells-again-connie-and-maury-buy/ .
Page 231
“It was clear in the 24 hours
Katie Benner, “I Was Lucky to Get Out,”
Fortune
, September 26, 2008.
Page 232
By November 2009, the cost
Linda Sandler, “Lehman Bankruptcy Advisers Get $535.5 Million,”
Bloomberg
, December 14, 2009.
Page 232
But by September 2009, he reported
“Scaling Mount Lehman,”
Wall Street Journal
, September 15, 2009.
Page 233
In October the
Journal
revealed
Jeffrey McCracken and Mike Spector, “Fed Draws Court’s Eyes in Lehman Bankruptcy,”
Wall Street Journal
, October 5, 2009.
Page 233
By November creditors had filed
Christopher Scinta and Linda Sandler, “Claims Against Lehman Could Hit $1 Trillion,
CEO
Says,”
Bloomberg
, November 19, 2009.
Page 233
To the astonishment of many In Re: Lehman Brothers Holdings Inc. et al
., Southern District of New York, Case 08-135555, Creditor 1000230602.
Auletta, Ken. 1986.
Greed and glory on Wall Street: The fall of the house of Lehman
. New York: Random House.
Burrough, Bryan, and John Helyar. 1990, 2008.
Barbarians at the gate: The fall of
RJR
Nabisco
. New York: Harper & Row, HarperBusiness.
Cohan, William. 2009.
House of cards: A tale of hubris and wretched excess on Wall Street
. New York: Doubleday.
Collins, Jim. 2009.
How the mighty fall and why some companies never give in
. New York: HarperCollins.
Gasparino, Charles. 2009.
The sellout: How three decades of Wall Street greed and government mismanagement destroyed the global financial system
. New York: HarperCollins.
