On this eventful third anniversary of the demise of Lehman Brothers, I googled "Lessons of Lehman" to see just what kinds of lessons are to be gleaned from this infamous but hardly unusual Wall Street debacle.
Here is my favorite lesson written by Jim Cramer in New York Magazine on or about the first anniversary:
"A few good banks is better than a lot of bad ones. In the wake of Lehman, we now find ourselves with just a handful of banks left standing that have huge deposit bases and lots of capital—JPMorgan Chase, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs.
Although it’s wise to be skeptical of concentration, the upside of this situation is that the banks that are left are reliably solid. Having passed the Fed’s stress tests and being subject to far tighter regulation and greater transparency than before, they should be able to handle even the most profound downturn that could await us. They should also see their net worth build up at a rapid pace. The bad loans they have had to write o? are peaking, the new loans they’re making are more reliable, and they have less competition.
The Lehman legacy, ironically, could be a better, stronger, humbler, more trustworthy banking system. While we certainly took a difficult, painful, and avoidable path to get there, it looks like there might be something positive to celebrate on this dubious anniversary after all." [Source Link]
There are many other similarly ludicrous lessons to be learned if you follow the ridiculous narrative of the obsequious morons comprising Wall Street's fourth media estate.
I will spare you the pain and suffering.
Instead I came up with my own short list, which I will call:
BANZAI7'S "REAL LESSONS OF LEHMAN" (sarc on)
LESSON 1: Spare no expense when it comes to influence.
Lloyd Blankfein still sits in his corner C Suite office while poor Dick the Gorilla has a banana stand in Palookaville.
LESSON 2: The too bigger the too better.
Dick thought he was Too Big to Fail. As to today's events confirm, the Central Bankers of the world are literally dying to bailout every sick dog in the junkyard. But...
LESSON 3: Just don't let your worst enemy become Treasury Secretary
Hank obviously didn't think so.
LESSON 4: On Wall Street, ignorance is your best excuse.
To this day Dick has successfully evaded criminal prosecution by sticking to his simple story: "I don't know nuttin." Don't know about the toxic shit that was in the basement, don't know nuttin about no about Repo 105 and didn't know the gravitas of Lehman's perilous financial condition.
So far so good. "How am I doin Angelo."
LESSON 5: It's OK to lie though your teeth if you are trying to rescue a sinking ship.
Just like the management of AIG, Bear Stearns and the rest of Wall Street, Dick has been able to avoid being held to account for all the obfuscation and puffery concerning the true state of Lehman's finances leading up the the bankruptcy. No small feat given David Einhorn's determination to expose the truth.
LESSON 6: Transparency is for wimps.
See Lesson 5.
LESSON 7: Complicated accounting rules are complicated for a good reason, obfuscation.
See Lesson 6.
LESSON 8: Financial bimbonomics (no disrespect to Erin Callan's skills as a tax lawyer) are no match for a shrewd short.
David Einhorn has a keen nose for bullshit.
LESSON 9: It's good to be the undertaker.
Homework assignment: Google Lehman bankruptcy fees.
LESSON 10: Florida is a good place for spouses to hold real estate title, particularly if your spouse is Linda Green.
Corollary--If the Choo fits wear it.
Well I could continue with this, but i think you get my drift. There are plenty of lessons that we have all learned in the ensuing three years. Unfortunately they are not the lessons "they" want us to think about. And the lessons just keep on coming.
Today, courtesy of Kweku Adoboli and UBS, we have learned yet another important lesson which Matt Taibbi put quite succinctly:
"The only thing that differentiates a "rogue" trader like Barings villain Nick Leeson from a Lloyd Blankfein, Dick Fuld, John Thain, or someone like AIG’s Joe Cassano, is that those other guys are more senior and their lunatic, catastrophic decisions were authorized (and yes, I know that Cassano wasn’t an investment banker, technically – but he was in financial services).
In the financial press you're called a "rogue trader" if you're some overperspired 28 year-old newbie who bypasses internal audits and quality control to make a disastrous trade that could sink the company. But if you're a well-groomed 60 year-old CEO who uses his authority to ignore quality control and internal audits in order to make disastrous trades that could sink the company, you get a bailout, a bonus, and heroic treatment in an Andrew Ross Sorkin book." [Matt Taibbi Link]
Oh, I almost forgot two of the most important lessons: "socialism and capitalism are hollow interchangeable words" and "On Wall Street crime pays handsomely."