Insider recalls the day that Lehman died

September 15, 2009

Joseph Tibman was a senior banker at Lehman Brothers for 20 years and is now the author of “The Murder of Lehman Brothers, An Insider’s Look on the Global Meltdown”. Tibman writes under a pseudonym to preserve his ability to work in finance. The views expressed are his own.

September 12, 2008 was a Friday like no other.

Just one day earlier, I was somewhat concerned about the hammered Lehman Brothers share price and the persistent rumors about my firm, but I had been here before. Well not exactly here. But I was sure Lehman would survive as an independent firm.

Had I overdosed on the Lehman-distributed talking? Soon after I arrived at my office in the Lehman headquarters at 745 Seventh Avenue on the north end of Time Square, it was clear my world, and that of all those around me, was spinning off its axis. The word was out. The Federal Reserve Bank and U.S. Treasury were in the building. So were Bank of America and Barclays Capital. Or were they?

What did it matter where they were? This was it. Two of our competitors, far weaker in investment banking, were negotiating to buy us. All I can remember, even after just a couple of months, is obsessively trading Blackberry messages with restless colleagues and perpetually scanning television general and business news channels for just one more sliver of incremental info, for hope. My world had stopped rotating.

Throughout the weekend, our Blackberries continuously hummed, expressing the collective freak-out. Then a bombshell dropped. Merrill Lynch was to be acquired by Bank of America in a government-brokered deal. We were toast. We would fail. If there were to be a Lehman deal, it would have been announced at the same time. Fail. This was surreal. On Sunday, many of us rushed to the office to retrieve personal possessions, just in case we were locked out on Monday. The firm had not yet been pronounced dead, but the Lehman I had long made my second home was teetering on the brink.

It deeply troubles me that my second home for twenty years was the lynchpin that detonated a global meltdown. I anticipated a slew of tabloid books that would over-simplify. I felt I had to do something. So I decided to write my account of the events — one that lets no one off the hook, but also tells the world in plain English what really went down and what we need to fix.


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I’m playing the world’s smallest violin just for you right now…

Posted by FedUPWithWhinyBankers | Report as abusive

I have worked in the financial arena since the age of 18 (am now 50). It’s been good to me and I am forever grateful to it, however, allowing these institutions to become behemoth was irresponsible. It was clear back in 1993 when I worked for Citicorp that the right hand did not know what the left was doing. This coupled with the mandate to push the limits and take risks in developing products to sell to the unsuspecting consumer should have raised major alarm bells long long ago.

But Citi is not unique; it become the global standard for other institutions to follow and while our shell shocked state may not want to admit it, shareholders and employees all greatly benefited from it.

So here we are today, personally speaking with a totally unemployed household for some 12 months plus now. Lehman was a sore that explored 09/15/08 and we are still cleaning up its mess. Sadly the puss has infected the logic and common sense of many in its wake; especially our so called political leaders who turned a blind eye to the financial industry for years.

They lined their pockets with money from these industries (finance, insurance) and now prefer to cause the disintegration of American’s moral by slagging a president and spreading untruths rather than work side by side to restore America.

It all boiled and boils down to greed and we need to live with the consequence.

Posted by FRA | Report as abusive

= a fine account —and then what happened next ?

Posted by pradhan,mb,ind | Report as abusive

It is good to read about Lehman, but from what went on since then it seems that the people running it did not get it then, nor the people in the banking industry still do not get it. You can teach ethics in college and in high school, but the follow through is really tough to enact. So far I hear all about Government regulation, but personal regulation is what we really need right now. I have worked in companies where the workers knew we were “going down in flames” but the powers running the ship had not a clue and were not listening. Listening to the people who depend on you to make the correct decisions is tough to do. It seems that we have a real lack of that in the halls of Government today. Let’s hope we get some people in Government who listen to their people and act accordingly.

Posted by f belz | Report as abusive

Basic terms are that bankers are greedy, and have caused the rest of us to suffer for their stupidity.

Thanks a bunch

Posted by Paul | Report as abusive

All of this makes the movie ”Wall Street” that much more surreal.

”Greed is good” says Gordon Gekko. even other movies such as Boiler Room referred to Wall Street.

Ethics reform and codes of ethics are nice show and tell preso’s for the public but we know that only takes a few people who are in the know to bring down these billion dollar companies.

The penalties need to be severe. Why not punishable by death?

Posted by Doug C | Report as abusive

Another overpaid banker gets teary-eyed over his 2008 bonus being smaller than his 2007 or his forthcoming 2009 bonus.

If you have a job that pay the bills, be happy, 9.7% of the country don’t.

Posted by Mike Young | Report as abusive