Danny Schechter - ColdType

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the credit-market collapse that followed Lehman’s bankruptcy
filing in the early hours of Sept. 15, according to Wessel’s book.
“. . . On a conference call the previous week, Paulson, Bernanke,
Securities and Exchange Commission Chairman Christopher
Cox, and senior staff members from those agencies had
agreed that companies and investors who did business with
Lehman had learned from Bear Stearns and would have acted
to protect themselves from a Lehman failure,” Wessel wrote.
Another new book on Lehman’s fall, A Colossal failure of
Common Sense, by bank insider Lawrence G. McDonald reveals
that the bank’s leaders had been warned repeatedly that an
iceberg was in their path.
Each and every one of them laid it out, from way back in
2005, that the real estate market was living on borrowed time
and that Lehman Brothers was headed directly for the biggest
subprime iceberg ever seen, and with the wrong men
on the bridge.
According to the Times review, Mr. McDonald indicts a
failure of common sense skirting the issue of criminality. He
blamed his bosses willingness to take on “risk, more risk, and
if necessary bigger risks in pursuit of short-term profits, willing
to borrow more and more money (on the way to leveraging the
firm to ‘44 times our value’) in order to buy commercial and
residential real estate at the top of the market, even though
one of his lieutenants had warned in 2005 that the housing
market was on steroids and headed for serious trouble.”
Again, we see no realization in the executive suite of how
these decisions fueled by a desire to enrich themselves and
other firms would affect others. There is no sense that a crime
to the world economy was underway because of the vast number
of victims who would be created and then suffer enormous
losses. This consideration seems conspicuous by its absence in
much of the writing about the crisis.
“They didn’t do their homework. People were talking about