A Colossal Failure of Common Sense
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Product Description
Book Description
The no-holds-barred account of the destruction of Lehman Brothers, by insider Larry
McDonald
Product Description
When Lehman Brothers bank went under, the world gasped. One of the world's biggest and most successful banks, its downfall was the event that sparked the slide of the world economy toward a Great Depression II.
This is the gripping inside story of the dark characters who ruled Lehman, who refused to heed warnings that the company was headed for an iceberg; the world-class, mid-level people who valiantly fought to get Lehman off its disastrous course; the crash that didn't have to happen. A news-breaking explanation that answers the question everyone still asks: "why did it happen?"
Larry McDonald, a former vice-president at Lehman Brothers in charge of distressed debt trading and convertible securities, was right at the centre of the meltdown of the company and gives an intimate look at the madhouse that Lehman became. This book shows beyond a doubt that Richard Fuld, the long-time CEO of Lehman, and his top executives, were totally out to lunch, allowing Lehman's risk profile to reach gargantuan proportions.
While the traders, like Larry McDonald, clearly predicted more than two years in advance that the market for packaged subprime mortgages and credit default swaps would evaporate, the high-flying Lehman bosses pushed hard on the gas pedal until the very end.
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Most Helpful Customer Reviews
35 of 36 people found the following review helpful
Format:Paperback
The story is very interesting - it's good to get the view from inside Lehman Brothers. I assume that all the dates and numbers are correct - no reason that they shouldn't be
But - the writing is not good. Too often the authors - both the former investment banker and the guy who made it into book - substitute made up conversations to advance the story. I'm not saying they fabricated the story - it's just that nobody, but nobody, remembers conversations years later - not like these guys pretend the banker did.
It is laziness and a lack of talent that leads to this
Too much of the book is about the author's education in the school of hard knocks, although it doesn't seem that they were all that hard, compared to many more people of his generation (now in late 30s I'd guess)
His upbringing was so deprived that he never has been a scratch golfer - one or two handicap, maybe. Not too deprived, I think. Maybe that he couldn't get into a better school than U Mass - Dartmouth had more to do with him screwing around while he was in high school.
Anyway - he did want to get to Wall Street, and he did have to do it the hard way - a series of jobs with increasing responsibility, and finally he finds the Holy Grail - his own desk at Lehman Brothers. He was SO happy!
And the story goes on, and he recounts how he and a few other people in his department (in charge of short selling and disposing of damaged goods) saw the mistakes everybody else was making (there is no nuance in his description of people - either they are the best and the brightest, or stupid and evil incarnate at the same time)
And a year or more before Lehman sinks he understands (because he knows what is going on in the mortgage business) that the system is going to collapse. But he wasn't bright enough to add everything up (although others did - a man named Einhorn was selling Lehman short for a year before it failed, and he didn't have as much information as our author - he just could draw reasonable conclusions from the evidence)
So he sticks around and Lehman crashes, taking his Lehman stock (which he couldn't sell, although I don't get the idea he would have sold much before the end even if he had been able to [Lehman stock made up half the bonuses it paid employees like the author, and it was not able to be sold for several years thereafter. I don't know if quitting Lehman would have lifted the restriction; he doesn't say. Probably not)
And he whines - boy does he whine - about all those years of work, and most of it down the drain. He doesn't say whether he saved any of the cash he was paid; if he didn't and relied completely on his illiquid Lehman holdings for his net worth, then he was a very big fool The experience of Enron was fresh - he mentions it. He doesn't say whether it encouraged him to diversify even a little bit. He complains that Lehman wasn't bailed out while Goldman was.
He has a little bit of a point here - but as we all know, it is an unjust world. Republicans like the author - he says he is, or was, a confirmed Reagan-Thatcherite - which means sink or swim EXCEPT when those sinking are deserving hard working investment bankers such as him.
I don't think the author knows what irony is - so I concluded that his lament for some fellow employees was serious e.g., one had to sell his forty million dollar beachfront home, another had to watch his wife's famous art collection be sold et cetera I don't think any were or are homeless and eating in soup kitchens, though
But - the writing is not good. Too often the authors - both the former investment banker and the guy who made it into book - substitute made up conversations to advance the story. I'm not saying they fabricated the story - it's just that nobody, but nobody, remembers conversations years later - not like these guys pretend the banker did.
It is laziness and a lack of talent that leads to this
Too much of the book is about the author's education in the school of hard knocks, although it doesn't seem that they were all that hard, compared to many more people of his generation (now in late 30s I'd guess)
His upbringing was so deprived that he never has been a scratch golfer - one or two handicap, maybe. Not too deprived, I think. Maybe that he couldn't get into a better school than U Mass - Dartmouth had more to do with him screwing around while he was in high school.
Anyway - he did want to get to Wall Street, and he did have to do it the hard way - a series of jobs with increasing responsibility, and finally he finds the Holy Grail - his own desk at Lehman Brothers. He was SO happy!
And the story goes on, and he recounts how he and a few other people in his department (in charge of short selling and disposing of damaged goods) saw the mistakes everybody else was making (there is no nuance in his description of people - either they are the best and the brightest, or stupid and evil incarnate at the same time)
And a year or more before Lehman sinks he understands (because he knows what is going on in the mortgage business) that the system is going to collapse. But he wasn't bright enough to add everything up (although others did - a man named Einhorn was selling Lehman short for a year before it failed, and he didn't have as much information as our author - he just could draw reasonable conclusions from the evidence)
So he sticks around and Lehman crashes, taking his Lehman stock (which he couldn't sell, although I don't get the idea he would have sold much before the end even if he had been able to [Lehman stock made up half the bonuses it paid employees like the author, and it was not able to be sold for several years thereafter. I don't know if quitting Lehman would have lifted the restriction; he doesn't say. Probably not)
And he whines - boy does he whine - about all those years of work, and most of it down the drain. He doesn't say whether he saved any of the cash he was paid; if he didn't and relied completely on his illiquid Lehman holdings for his net worth, then he was a very big fool The experience of Enron was fresh - he mentions it. He doesn't say whether it encouraged him to diversify even a little bit. He complains that Lehman wasn't bailed out while Goldman was.
He has a little bit of a point here - but as we all know, it is an unjust world. Republicans like the author - he says he is, or was, a confirmed Reagan-Thatcherite - which means sink or swim EXCEPT when those sinking are deserving hard working investment bankers such as him.
I don't think the author knows what irony is - so I concluded that his lament for some fellow employees was serious e.g., one had to sell his forty million dollar beachfront home, another had to watch his wife's famous art collection be sold et cetera I don't think any were or are homeless and eating in soup kitchens, though
3 of 3 people found the following review helpful
Format:Paperback
I suppose this is an "instant-tell-all" written quickly to exploit a market opportunity and current interest. The book is interesting from a timeline and events standpoint, but terribly written. Too much about the author, too much speculation about events where he wasn't present, and the language and style is very casual and repetitive.
It is a quick read - just skim over the author trying to build up his own case for calling himself "clever" as he loves to repeat.
It is a quick read - just skim over the author trying to build up his own case for calling himself "clever" as he loves to repeat.
16 of 18 people found the following review helpful
Format:Paperback
This is a disappointing read. Clearly the author(s) had vast scope for delivering a gripping inside view of the goings on at Lehman. However the serious subject matter is waylaid in a geewhiz semi-autobiographical type delivery. The story is populated with pen pictures of how brilliant most of the boys and girls at Lehman's were and how hard they worked - there are just too many cringe-inducing episodes lauding peers and superiors. All of which serves to dilute the credibility of the witness and to question the balance of the presentation. Sticking with it to the finish is a real challenge with this book.
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Most Recent Customer Reviews
Lehmangate
Of all the recent spate of books on Lehman's collapse, this is it. Told from the inside by a trader, the author speeds along the path to the ultimate annihilation of Lehman Bros. Read more
Published 7 days ago by Dr. P. R. Lewis
Things you should know about the Leman collapse
If this book shows one thing it is that Lehman's, and all other big banks, employed a lot of decent, hard working people who knew that what was happening in the financial world was... Read more
Published 9 months ago by Duncan Gray
Premila
As a recent graduate looking to broaden my financial understanding, this book provided an excellent perspective on the world of trading and the corporate structure. Read more
Published 9 months ago by Premila
An insider's account? Please!
Aside from the shockingly poor writing, the hyperbole and offputting and constant personal focus, the most disturbing part of this book is that it is presented as if written by... Read more
Published 10 months ago by TheHonestBroker
I really enjoyed this book
I bought this book weeks ago and only just got around to reading it. I have to say that I really enjoyed it. Read more
Published 20 months ago by S. Langridge
Well Worth Reading
Really enjoyed this book, and difficult to put down at times. Its a good story as well as a look at the fall of Lehmans, obviously it looks at the tail from the perspective of one... Read more
Published 20 months ago by RB
A self absorbed author
As someone who works in the bond market I got little colour from this book: it is all a bit breathless and the author makes himself a bit too much a Master of the Universe (cf Tom... Read more
Published 21 months ago by nicholas
A Colossal Failure
I am not an avid reader, but I found this book to be a most enjoyable read.
It was very informative, with the occassional amusing passage to lighten what was otherwise a... Read more
It was very informative, with the occassional amusing passage to lighten what was otherwise a... Read more
Published 24 months ago by D. Sullivan
A good read!
Picked up this book in the airport, read it on the plane and really enjoyed it. No Shakespeare, but it sums up some of the complicated financial products created during the credit... Read more
Published on 10 April 2010 by Mr. Alexander P. Baker
A modern day version of "Liar's Poker"
An insider's look at the failure of Lehman Brothers. It is very similar to "Liar's Poker", but it obviously operates in a more recent timeframe. Read more
Published on 26 Feb 2010 by Morten Pedersen
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