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Lehman tales

September 13, 2009

Over the past two days, we’ve been treated to two long stories in The New York Times and The Wall Street Journal focusing on employees of Lehman Brothers, one year after the firm’s chaotic bankruptcy filing. Yawn.

Now, don’t get me wrong–both stories are well reported and well written.  I was glad to see that one of the people the Times did a mini-profile on was a former Lehman banker who packaged and sold rotting mortgages and is honest enough to admit he has “blood on my hands.”

But it’s not the Lehman employees I’m really concerned about–even if some of them are feeling remorse now. I’m more concerned about average Americans–and for that matter, average people around the globe–who were impacted by the collapse of Lehman and the collateral damage to the financial system.

A year later, we still don’t read or hear enough stories about the average folks who bought Lehman’s now worthless structured notes, which were pitched as conservative investments. Over the past five years, a Lehman subsidiary in Amsterdam sold some $30 billion of these notes to average investors–many of them retirees–in England, Belgium, Germany, Switzerland and elsewhere in Europe.

How are these people getting on?

Or what about the thousands of people in Thailand and Asia who bought similarly worthless Lehman mini-bonds?

And let’s remember, this crisis began long before Lehman with the meltdown in the housing market. The foreclosure crisis is still going on and it’s getting worse.

Sure, there are still stories about the foreclosure crisis. But more and more of these stories in the press are about once wealthy people losing their homes.

We need more stories about how this financial crisis has impacted and continues to impact average people. The media’s focus on the fortunes of those who worked on Wall Street or the rich and famous–for instance, the celebrities who lost money with Bernie Madoff–is one reason I think there is so much outrage at the last year’s bailout of Wall Street banks. Bailouts that were necessary, if poorly designed and enacted.

For many people, it seems the politicians and media are mainly concerned with the fate of the bankers, the powerful and the well-connected. As we approach the one year anniversary of Lehman’s collapse and the start of the mega financial bailouts, it’s time to re-focus on the role of Wall Street as the culprit in this crisis.

After all, it was the Wall Street banks that provided the financing that drove the mortgage mania to the stratosphere and found clever new ways to package iffy home loans as high-grade investment bets.

We need fewer stories feeling sorry for people who work, or worked on Wall Street. And more stories on how Wall Street created a system that has made the lives of ordinary people much more difficult for years to come.

A year after Lehman, there are still so many unanswered questions about the role Wall Street banks, the credit rating agencies and yes, the regulators, played in this whole crisis. It’s the job of the media to get to the bottom of these issues–not to write Wall Street sob stories or political hagiographies for regulators trying to engage in a bit of revisionist history.

UPDATE:

Joshua makes a fair point about my failure to include stories of regular people who were victims of the financial crisis. So here is a link to a column I recently did for Reuters on a Florida resident facing foreclosure on her home and a story I did at BusinessWeek with my colleague David Henry on some of the victims of Lehman’s structured products.

Comments

Nobody cares about the ‘little’ guys. The stockmarket is so easy to play now, anybody with $200 can put it in and double or triple their money. Bad economy or not, there are always ways to make money. I hear it’s a difficult life when you’re an illegal who can’t speak English.

Poor people are poor because they are choosing to be jealous and hate the rich, rather than looking up to them and doing things the same way. Land of Opportunity! If you’re not so inept to take the ones you get.

Posted by Adam | Report as abusive
 

Ok, interesting article, nicely done. Wish you had shown some of those average person stories, but nice.

Previous commenter? Shut the hell up. I was unemployed for 7 months, and now am trying to start 2 new businesses, work a full time job which pays nothing close to what I used to get, and still keep up in an industry which takes damn near full time study to follow (Information security).

So the $200 which I can put in and double or triple? Not gonna happen.

Idiot.

Posted by Joshua | Report as abusive
 

Dear Mr.Mathew,
Very good sentences from you on Lehman Tales.
Since a week, every where, news on Lehman closure In America.
This is a my second comment to this subject.
What you said is acceptable by many sufferers.
Not only Americans, but from some Asian and European countries investors also suffered early due to worst financial disasters in a developed country.
Poor,small investors, mis understood on !feel good factor! by many business news, overseas people and by previous balance sheets.
Heavy amounts on Real Estate,regret to say that, many semi good projections on getting more profits and more returns from this financial down fall banking sector had added innumerable sufferings to its investors.
Intelligently and philosophically saying, why many news channels, other medias are bringing, writing notes on this worst financial disaster.
Wall Street is a stock market operations and we know that its investments by shares, bonds etc,are very fluctuation results on day today basis.
Please do not give much importance about Wall Street upward trend by now a days, instead of highlioghting always on Wall Street by all media networks ,you means all medias, business journalists, correspondents and reporters can concentrate on vital aspects of daily savings, public deposit on government bonds, fair investment on medium houses and building new,worth,result oriented on continuous growth by profits, and job creation to more jobless youth and correct picture on day today companies results and real prospects to Americans and to general public.
No question of writing on worst financial history in American society.

 

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