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Dissecting Lehman Brothers' Fall
By
Jen Chung
Published Sep 8, 2009
Modified Sep 8, 2009
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By
Jen Chung
Published Sep 8, 2009
Modified Sep 8, 2009
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Bloomberg News has a long article looking at Lehman Brothers' collapse last year, reporting that Lehman executives actually predicated in the memo to government officials, "Massive global wealth destruction... Impacts all financial institutions... Retail investors/retirees assets are devastated." But apparently the banking executives gathered by Treasury Secretary Paulson and then-Federal Reserve Bank of NY (and now current Treasury Secretary) Geithner were thinking about themselves; former Merrill Lynch CEO John Thain tells Bloomberg News, "The discussion among the CEOs was ‘How do we prevent the next firm from going under?’ There should have been much more discussion about the impact directly on the markets if Lehman went bankrupt." Mohamed El-Erian, CEO of Pacific Investment Management Co., "the world’s largest bond-fund manager" remembers, "I remember at the end of the week calling up my wife and saying, 'Jamie, go to the ATM, go to the cash machine, and take cash out.' She said, ‘Why?’ I said, ‘I don’t know whether the banks are going to open tomorrow.’" And some believe the government hasn't learned the lesson, by allowing banks to stay big or get bigger without a thorough regulatory process.
Tagged
bankruptcy
collapse
economy
lehman brothers
recession
wall street
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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