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

from the well-that's-convincing dept

Thu, Sep 2nd 2010 1:37pm — Mike Masnick

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.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: blame, dick fuld
Companies: lehman brothers

19 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Dark Helmet (profile), 2 Sep 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....
[ link to this | view in thread ]
Joseph, 2 Sep 2010 @ 2:06pm

pathetic
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.
[ link to this | view in thread ]
Anonymous Coward, 2 Sep 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.
[ link to this | view in thread ]
Anonymous Coward, 2 Sep 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
http://www.youtube.com/watch?v=-fTh2GffJsM
[ link to this | view in thread ]
Anonymous Coward, 2 Sep 2010 @ 2:38pm

Too big to fail and government backed to rip you off. Nice.
[ link to this | view in thread ]
Anonymous Coward, 2 Sep 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.
[ link to this | view in thread ]
Anonymous Coward, 2 Sep 2010 @ 3:03pm

Lehman's was the picture of morally bankrupt profiles though.
[ link to this | view in thread ]
Josh in CharlotteNC (profile), 2 Sep 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.
[ link to this | view in thread ]
ofb2632 (profile), 2 Sep 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.
[ link to this | view in thread ]
Anonymous Coward, 2 Sep 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?
http://www.youtube.com/watch?v=BJ7EIKbnnkw
[ link to this | view in thread ]
abc gum, 2 Sep 2010 @ 6:11pm

Those banksters have no shame.
[ link to this | view in thread ]
PrometheeFeu (profile), 2 Sep 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.
[ link to this | view in thread ]
abc gum, 2 Sep 2010 @ 9:24pm

Re:
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.
[ link to this | view in thread ]
BearGriz72 (profile), 2 Sep 2010 @ 10:45pm

Anagrams Are Fun
Richard Severin Fuld Jr = Darn Fredric Hurls Jive
[ link to this | view in thread ]
Anonymous Coward, 2 Sep 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.
[ link to this | view in thread ]
Pickle Monger (profile), 3 Sep 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!
[ link to this | view in thread ]
Pete Braven (profile), 3 Sep 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.
[ link to this | view in thread ]
The Devil's Coachman (profile), 4 Sep 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.
[ link to this | view in thread ]
Brendan (profile), 4 Sep 2010 @ 10:52pm

Re: Re: Just an opinion, but...
W word = Witch?
[ link to this | view in thread ]