He cried all the way to the end of the book about HIS loss. The Lehman collapse shows that law to be worthless. So far no one has gone to prison for the crimes committed here. The book convinces me that investment banks should not be allowed to do trading. This is just gambling where the employee can win and the stockholders and America lose. This trading business is relatively new.
Investment banks should go back to what they were intended to do: Raise funds for corporations by selling new issues of stock or bonds, or doing IPO's. And helping with takeovers, spin offs, and sales of part of a company. This is just naked greed allowed to run wild. That was an attempt to make Lehman "too big to fail". Totally reprehensible behavior. Fuld should go to jail. Mar 19, Robert J. Sullivan rated it it was ok. Part autobiography, part analysis of the collapse of the Lehman Brothers that led to the collapse of the US economy, this book might serve better as an examination of one person, Lawrence G.
McDonald, and his pathologies. McDonald was a broker for Lehman and might be a poster child for cleaning out the whole lot of Wall Street brokers. He's sexist "The last good decision your wife made was to marry you" , racist when people find out how bad adjustable rate mortgages are, he suggests they passe Part autobiography, part analysis of the collapse of the Lehman Brothers that led to the collapse of the US economy, this book might serve better as an examination of one person, Lawrence G.
He's sexist "The last good decision your wife made was to marry you" , racist when people find out how bad adjustable rate mortgages are, he suggests they passed the word by "jungle drums" , and elitist he spends a lot of time mocking the Lehman Brothers policy of diversity; he makes fun of a senior member of Lehman for ordering spaghetti instead of braised tuna. Raised in some wealth and falling to poverty after his parent's divorce he was afraid to go outside after they moved , he identifies with the father who spent all of his time on work and golf.
Continuing the pattern, he spends more time on the menu when one of his co-workers leaves most of a paragraph than to his marriage and divorce. That gets two sentences. He doesn't even mention her name. Oh, he's a scratch golfer. He rises through the ranks by being a top meat salesman on Cape Cod, and later looks down on those who don't work in the bond market with him. He only worked for the mob long enough to get his broker's license and justifies it by saying he didn't stay long.
He only stole what he needed to further his career. He blames Roberta Achtenberg for the failure of the US real estate market. Achtenberg, who was an Assistant Secretary for HUD from , terrified US banks into giving mortgages to people who couldn't afford them for the next 14 years, despite her absence and a change in administration. He gives less weight to the mortgage companies who paid double commissions to salesmen to create the mortgages they were bailing and selling.
There's a lot more to make fun of in this book: for example, this arch-capitalist follows his father's investment advice which, oddly enough, is practically a direct quote from Karl Marx. As an example of how his experiences have made him more human, when he passes Lehman's building these days, he has empathy for those who lost millions.
Apparently those who lost homes aren't worth his concern. In the end, Lehman went under despite all their efforts to save it. Bush, who worked for the firm, tried to save them by making a personal call to the president to get the firm bailed out, but the president didn't take his call. This would be a good time to look up "crony capitalism". In the end, McDonald's strong personal opinions on the people involved in Lehman, government, etc.
I would suggest that anyone interested in the financial collapse take a look at "The Trillion Dollar Meltdown" by Charles R.
Shop with confidence
It's excellent. Nov 27, Booketeer rated it it was amazing. If you are a member of a group, that group counts as one and only one adviser. If you want many advisers, they can't be members of the same team. It doesn't work. You get groupthink and exile of naysayers. X has never happened so we don't need to worry about it happening. In this case, real estate has never fallen more than a small percentage so it never will.
Regarding the status quo as self-explanatory is the road to perdition 1. Regarding the status quo as self-explanatory is the road to perdition. Wall Streeters are mostly amazing idiots. We are led and run by morons. Their decisions are driven by all sorts of personal issues ambition, rivalries that have nothing to do with making rational decisions. Money really does make people drunk. There is a twin dynamic to a bubble. The attractiveness of the "investment" and the failure to find anything else to do to make one's money grow.
Greenspan is revealed as the ultimate cause with real estate and subprime mortgages just being the most convenient fire pit in which to burn all the money. Greenspan's lowering interest rates not only attracted people to where the new money was appearing as profit, but it destroyed the incentive for conventional savings. The mattress gave as good a return as the savings account.
The person who destroys himself with the most hubris Fuld of Lehman Brothers can be a convenient scapegoat, but the lead bull in a stampede is not the source of all the damage. The Fed Reserve does not create price inflation by itself.
It requires the cooperation of other players in the economy--the banking system. But when the bubble pops it destroys their willingness to "do their part. Bernanke can't fill the black hole no matter how much QE he does. It seems much more likely that deflation is ahead. Dec 01, Savinipop Savini added it Shelves: can-t-finish-this-crap. I just read the prologue of this book, and I'm sick of it already. Then he says it might have been Bushes fault for not allowing Lehman to file chapter He actually has the audacity to say on page two. If he had listened to his generals, met people who formed the heart an soul of Lehman brothers, the catastrophe might have been avoided.
I will try to read more, but It's about three months later. I couldn't complete this book. In a nut shell the book is poorly written and self serving. I feel for the co-writer Patrick Robinson because each page must have been a struggle. The book is littered with cliched writing. Sep 21, Shaun rated it really liked it.
This was a good read and described how Lehman Brothers, an investment bank that has been around for over years, collapsed and declared bankruptcy. It was mostly due to the two men at the top who stopped leading and did what they wanted to do, disregarding good lending practices and earning easy money. They took these bad practices to the extreme. It was quite similar to what happened at Enron and was totally avoidable, but due to the pride of the leader at the top, the company collapsed and This was a good read and described how Lehman Brothers, an investment bank that has been around for over years, collapsed and declared bankruptcy.
It was quite similar to what happened at Enron and was totally avoidable, but due to the pride of the leader at the top, the company collapsed and hundreds of people lost their jobs. I recommend this book to anyone who is interested in understanding our economy and the world of high finance better. The author explains things in an easy to understand way. Aug 12, Jay Connor rated it really liked it.
Getting beyond the narrator's narcissism and only adequate writing, is well worth the effort.
Makes an upside down value system of celebrity models and multi-million athletes seem quaint. Woe to us if we don't insist on some regulatory backbone to balance these pirates who will simply move on to the next scheme. View 2 comments. Oct 10, Sylvia rated it it was amazing Shelves: debut-novels , current-affairs. A real-life techno-thriller, made even more horrifically fascinating because we all lived through these bewildering events. McDonald uses plain English to describe the murky financial instruments upon which the world's biggest economic bubble was based, and offers clear answers to the question "What the hell went wrong?
Oct 27, Susanita rated it it was amazing. Excellent description of the market and what caused the collapse of I know more about securitizations and credit default swaps than ever before. The author is also a very good storyteller. It's easy to read and entertaining. Highly recommend. Nov 21, Cara rated it it was ok. Everyone on Wall Street, including the author of this book, is a huge asshole. Caveat: I will probably feel very different about this book one day, but these are my thoughts for now, FWIW.
I felt like writing a critical review rather than just a substance review. This story was fascinating like most well-told insider stories. Certainly the arrogant and ignorant CEO and chairman of Lehman Brothers, Dick Fuld, and his clueless sidekick, president Joe Gregory, overrode common sense with their greed and ambition -- as many, many other financiers did in the environment that cr Caveat: I will probably feel very different about this book one day, but these are my thoughts for now, FWIW.
Certainly the arrogant and ignorant CEO and chairman of Lehman Brothers, Dick Fuld, and his clueless sidekick, president Joe Gregory, overrode common sense with their greed and ambition -- as many, many other financiers did in the environment that created the crash and recession of It is a tragedy that men like them are not in prison today.
Sure, they have lost their careers and reputations, but how hard can life be, now that they spend their time selling off multimillion dollar assets? Unfortunately, the book also demonstrates the larger lack of common sense among people like the author and his colleagues. He naively assumes that because they saw some of the impending dangers e. His own hubris about their financial knowledge, as if that made them special human beings when in reality anybody in any job has certain technical knowledge that other people do not have , is hard to put up with.
He also seems oblivious to his own greed and dishonesty that got him to where he was in the first place. Worst of all, he also seems oblivious to the fact that, whether one is making "smart" financial transactions like McDonald and his buddies or "dumb" financial transactions like those traders, mortgage salesmen, and investment bankers who could see know wrong with the U.
McDonald claims to be touched by others' suffering -- such as those bankers and traders he knew who had to sell SUVs, boats, private art, and beach houses after the stock market collapse in But what about the people who actually suffered as a result of all the speculating that went and goes on there?
Ultimately, this book shows both what went wrong on Wall Street in the years leading up to the subprime mortgage crisis, and also what is wrong in general when Wall Street and global capitalism are not moored to certain ethical and moral principles. McDonald does not understand that, ultimately, the world does not depend on him and his investment banks. Sure, they can provide capital, make mind-blowing financial trades and gains, and help some people while hurting a lot more, but in the end, the world goes on and there is nothing at all great about what he or any of his friends ever did.
McDonald and his buddies should read Ngugi wa Thiong'o's Globalectics. If capital went on strike, people would still work on the land or on machines in factories, make things for use, even exchange, but if labor went on strike, it would end the life of capital—its dominance, at least. Given this truth, obvious to all but those who think Wall Street is everything and despises anyone who cannot live the way they do and frequent the bars and restaurants they frequent, McDonald's statements are extraordinarily obtuse: Hank Paulson actually "obliterated" the world economy?
Lehman Brothers: 'A Colossal Failure'
It's just a lack of certain regulations that allowed the events of to happen? Or, indeed, the financial events of were "Armageddon"? No way. The world moved on, terribly hurt by the big banks, but it moved on and would have even if there had been no government bailout of other banks. May 08, F rated it it was ok. Ok, until the last chapter I would have said that I did not like the tone of the book, full of arrogance, despise for enemies and brownnosing to friends, but then I read that this was not really the work of the trader, but of Patrick Robinson, ghost writer and best seller writer for him.
About the content: It could be much much shorter.
No need to repeat everything thrice. No need to repeat in every chapter how awful the CEO and President of Lehman Brothers, and how correct but helpless McDonal Ok, until the last chapter I would have said that I did not like the tone of the book, full of arrogance, despise for enemies and brownnosing to friends, but then I read that this was not really the work of the trader, but of Patrick Robinson, ghost writer and best seller writer for him.
Not everything especially the financial products were clearly explained I had to read in Investopedia to get a grip on some subjects. I still don't understand how the financial manouvers of the investment banks multiplied the amount of "money" in existance. Because it was not clearly explained. In the end, McDonald was a shark, more like a vulture. He made money when a company got broke he specialized in "shorting" companies. That is legal, ok, and part and parcel of the investment market. How was this failed rescued had to have worked? By dumping the billions of fraudulent CDOs and Subprime mortgages on some other unsuspecting patsy a Korean bank almost and by selling at high inflated prices the huge amount of real estate Lehman Brothers owned.
Hardly something that should be ethically praised. The sheer amount of metaphors and analogies in this book, some piled on top of each other, was visually tiring, though that was obviously the work of the ghost writer, not of McDonald. In short, this is a so so book.
If you want to really understand the crisis, I guess another book might be better. One last comment: bu huu huu Lawrence, for your millionaire friends who did not get their extra millions in Lehman stocks. You certainly made very obvious that you cared more about them than about the thousands of people who lost their homes because they were conned into getting a mortgage on fraudulent terms: resetting interests that shot through the roof. Maybe they could never have aforded a mortgage realistically. But still, they were the real damages of the collapse of the subprime mortgage engine, not your millionaire friends.
Aug 22, John Venable rated it really liked it. I really enjoyed reading this, certainly not because Mr. The negatives first. Sometimes they work, sometimes not, but it doesn't matter because he'll try again in 2 pages. Towards the end he blames Hank Paulson for kicking off the Great Recession by not bailing out Lehman Brothers, but once again, I wanted to yell at him to read the previous pages!
Anyway, hate to be so hard on the guy, because I did really enjoy this book. It's a great 1st and 2nd person account of the incredible hubris that ultimately DID kick off the great recession. Lehman certainly wasn't alone, they just seemed to have a CEO that was crazier than most. I enjoyed the characterization of Richard Fuld as a wannabe-king and had no trouble imagining him as Nero, fiddling as Rome burned. Fuld not only fiddled, he threw gasoline onto the fire. The description of Fuld's reclusiveness and inability to take advice or be around anyone smarter than he should be a lesson for any aspiring leader.
Story kept me hanging on and couldn't stop reading. McDonald did a good job ispiring me to want to learn more. What more do you want? Apr 03, Brian rated it liked it. A fascinating book when understood from the perspective of the author, an upper-level manager at Lehman Brothers.
McDonald opens the book by blaming HUD under Clinton for forcing banks to lend to middle- and lower-income families to increase home ownership. His tirades wrap up the book by blaming the Fed and Treasury under Bush for not taking additional actions to save Lehman Brothers. Is McDonald a smart man? Seems to be so. But his constant self-congratulatory comments, his showering of praise upon the very people except a few he seems to personally dislike who caused the financial meltdown, and emphasis on the suffering of his wealthy brethren who were forced to sell yachts and vacation homes, make this smug book a great read for those of us on Main Street - but for the opposite reason he intended.
After hearing about the absurd salaries, ridiculous lifestyles, and arrogant personalities, it drives the conclusion that letting Lehman Brothers fail was actually a pretty fair result, notwithstanding the secondary effects on the economy. In this book, Lawrence McDonald describes events within Lehman Brothers and within the American and global financial system in the years leading up to the market crash and the bankruptcy of Lehman Brothers.
Given that Mr. McDonald and many people he knew and respected lost their jobs as well as the value of Lehman stock options they had received as part of their compensation, he has a toolshed of axes to grind and minces no words. That said, it is interesting to get the perspective of an in In this book, Lawrence McDonald describes events within Lehman Brothers and within the American and global financial system in the years leading up to the market crash and the bankruptcy of Lehman Brothers.
That said, it is interesting to get the perspective of an industry insider. People deposit savings into commercial banks so it can be available to them at a later date. Investment banks invest in businesses, etc. Placing commercial and investment banks within the same organization makes commercial bank deposits available for the use of high-rolling investment bankers. The absence of this wall was a contributor to the stock market crash, and Glass-Steagall was enacted after the crash to prevent a repeat performance.
Banks had wisely been hesitant to lend money to this demographic on account of the elevated risk of default and loss of depositor money. The government incented and strong-armed the banks into issuing such mortgages. Often these were adjustable rate mortgages ARMs whose payments would reset to significantly higher dollar amounts, often greater than the income of the debtors, after a certain period of time. These mortgages would be sold to investment banks to be packaged into collateralized debt obligations CDOs and other financial instruments. As soon as they packaged the mortgages into CDOs, they would sell them.
McDonald brought up several other factors, including one related to the aftermath of Sarbane-Oxley, that I cannot remember. Otherwise, I would summarize them here. Those raising the caution flag were forced out. As the market crashed in , a demand for extra collateral for this debt is what finished off Lehman Brothers.
As before, this list is by no means comprehensive, just what I remember. In writing the book, Mr. When he refused, they took out their anger on him with violence. Not surprisingly, this affected his performance in school and his grades. When it came time for him to go to college, he had to settle for a state school.
He had a dream of becoming a Wall Street trader, and the big firms recruited from the Ivy League rather than state schools. After he graduated, he mounted an unsuccessful campaign to get hired but got some good advice to work in sales. After a successful stint selling pork chops, he managed to bootleg his way into taking and passing the Series 7 test. Still unable to get a job on Wall Street, he partnered with a friend to found convertbond. In advance of the dot com crash, he and his friend sold the company to a brokerage for a healthy profit. Afterwards, he was hired on at Lehman Brothers and finally fulfilled his dream of being a Wall Street trader.
He was not what Wall Street wanted in a trader but a combination of hard work, cunning and creativity made it possible for him to achieve his goal. Like him, the low-income recipients of subprime mortgages were not what the bankers normally would look for. However, unlike him, they were able to fulfill their dreams without proving themselves. In contrast, McDonald did not get a position on Wall Street until he had proved himself.
It is clear that Mr. McDonald has some very strong opinions about what went wrong, and this book is necessarily one-sided. It provides some very fascinating insider information regarding the inner workings of the investment community and might be a good resource for someone researching the U. In that time period, I worked at a power plant owned by the regulated side of a utility. His descriptions of increasingly risky decisions in support of aggressive growth brought back memories of some near disastrous and very costly decisions made by the unregulated side of the corporation.
Lehman Bros weekend: 10 years on - Taipei Times
Those memories lent Mr. Jun 04, Leigh rated it really liked it. An excellent audiobook which can be quite suspenseful even tho you know the ending in advance. I liked this best of the 3 I've read so far about the Financial Crisis that came to a head in I may have liked this best due to its being written by someone who is neither super high up in the company, nor a professional writer. Rather Lawrence G. McDonald was a trader and thus a true insider at Lehman. Has some wonderful human interest stories about An excellent audiobook which can be quite suspenseful even tho you know the ending in advance.
Has some wonderful human interest stories about himself and his colleagues, some of whom he admired greatly. Very negative view of the highest levels of management, tho author had great respect for some of the people right under them.
Tho I liked the book a lot, I ultimately did not care for the author, who is ever so much more sympathetic to the people who lost their vacation homes and motor boats than he is ordinary Americans who lost their homes and their jobs. He responded to questions from members of the audience. Lawrence G. McDonald was, until , vice president of distressed debt and convertible securities trading at Lehman Brothers.
He is currently managing director of Pangea Capital Management. He is also co-founder of convertbond. Patrick Robinson is co-author of Lone Survivor , with U. This book talk was held at p. Gary Gensler talked about the the collapse of Lehman Brothers one year later, decisions made both before and during the…. Federal Reserve…. People in this video Lawrence G. McDonald , Patrick Robinson.