Insider recalls the day that Lehman died
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.