Leave aside Fuld's strategic decisions, about which there will be long debate. Here's one thing you simply cannot excuse him for: by all accounts, he didn't bother selling out because that would have meant surrendering the executive office, and this he could not bear to do. Instead, he played chicken with the markets and the Fed. The result was a bankruptcy that wiped out the shareholders to whom he owed a fiduciary duty, touched off a massive financial panic, etc.The blog entry is here, and the court filing therein is simply dispatched by Sam Jones:
It is disingenuity of the highest order to suggest that banks like Lehman were passive victims of a stormy market. Their actions created the stormy market in the first place. Dick Fuld's Lehman reaped what it sowed.
In fact, the filing actively celebrates all the risks that were taken by Fuld and Lehman in the years leading up to the collapse, talking about Lehman's "four consecutive years of record-breaking financial results" between 2004 and 2007, and citing with admiration Lehman's soaring share price.
I'm sure he had no idea that Reserve Primary would break the buck, markets would lock, massive layoffs would ensue, and half the journalists in DC would be spending their evenings debating just how low you can turn the thermostat before the pipes freeze. But he certainly knew that he was risking the future of thousands of employees and the shareholders who employed him because he liked to see the letters "CEO" after his name. To add insult to injury, as I blogged earlier, he's now playing shell games with his assets, trying to ensure that the shareholders who sue him can't cut kick him out of the mansion he bought with their money.
Exonerated? Like OJ, maybe.
FOR IMMEDIATE RELEASE
DAVOS, SWITZERLAND
WORLD ECONOMIC FORUM
January 28, 2009
KLAUS SCHWAB, FOUNDER OF WORLD ECONOMIC FORUM ANNOUNCES SURPRISE PANEL
GLOBAL PONZINOMICS: THE VIEW FROM WALL STREET
The following are excerpts from today's surprise panel discussion:
KLAUS SCHWAB: Distinguished guests, today we have arranged a surprise panel to lead us through the cutting edge of Global Ponzinomics. As you all know, the modern day version of Ponzinomics has its origins on Wall Street. I know you are all keen to hear directly from the leaders of Wall Street as well as the regulators all of whom made this remarkable feat of financial wizardry possible. The organisers of the Forum have spared no expense in bringing you a first rate panel. I would like to thank the United States Marshall Service for its cooperation in making it possible for Mr. Madoff to attend the Forum. That is a custom designed Cartier bailout bracelet Bernie is wearing. It is designed to explode if he gets within 50 yards of any UBS Branch in Davos. Mr. Madoff requires no introduction. His genius and modesty is well known. We thought it would be appropriate for Bernie to lead today's panel discussion. At this time I would also like to thank Citigroup for providing special air transport services to bring the panel participants straight to Davos on such short notice. Without further delay, I turn the discussion over to Bernie.
BERNIE MADOFF: "I would like to express my sincere gratitude to many of the participants in this forum. Without their undying support for so many years, my achievements would not have been possible. They deserve much of the credit for making the modern paradigm of this fascinating art possible. As you all know, Ponzinomics were invented by Charles Ponzi some 100 years ago. Who would have thought that the genius of this humble man would become the driving force behind today's global financial markets. Dick, before I forget, would you please be good enough give me the number of that Real Estate lawyer in Palm Beach."
DICK FULD: "We thought we had all the bases covered. We were hedged up the wazoo. I was certain that we managed to make ourselves too big to fail. In the end I was wrong. I underestimated the financial tsunami of 2009. My big mistake was not finding a way to put a Lehman banker in the Treasury. Lloyd you snookered me on that one."
JOHN THAIN: "I would like to start by saying three things: First, I have posted my French Commode along with my resume on Craig's list and Monster.com, Second, Ken you can take that faux hand Grenade sitting on your desk and shove it you know where. As we shall see, BAC is one big live hand grenade and Ken has already pulled the pin, Third, can anyone tell me where I can find a reputable antique dealer in Davos? Oh, and one more thing, Stan O Neal owes me my bonus."
KEN LEWIS: "John, you and I both know that I'm the CEO of BAC and you are not. You did not jump on the bailout hand grenade like a good bailout soldier. For this you must suffer the consequences. If this is not good enough, I will meet you on the top of the Weissfluhgipfel at O-700 hours for a Chinese downhill. The downhill will decide everything."
HANK GREENBURG: "You are all a bunch of rascals, give me back my Company so I can lose it fairly!"
LLOYD BLANKFEIN: "As I have said on many occasions, the Goldman investment banking model remains sound. We concentrated our efforts on putting men of Gold in the halls of power. This has paid off handsomely. Hank Paulsen saved us from the AIG explosion. The primary purpose of TARP was to save Goldman Sachs and this goal was achieved magnificently. Hopefully, the hiccups we are experiencing will dissappear in due course. Then we can all get back to business as usual."
VIKRAM PANDIT: "In response to yesterday's negative press we have decided to divide the Citigroup jet fleet into two halves consisting of good jets and bad jets..."
JIMMIE CAYNE: "Anyone know where I can find a decent bridge game around here?"
PHIL GRAMM: "If we could just stop all the whining."
ALAN GREENSPAN: "Where am I"
CHRISTOPHER COX: "I did what I was supposed to do."
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