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Mystery of the Day: Who Wrote This Email to the Fed Just Before Lehman's Collapse?
Submitted by EconomicPolicyJournal.com
And, here it is....
Feel free to leave your best guess(es) in the comments along with your reasoning. We have our own, but will wait to disclose so as not to corrupt the noodling process.
On another note, doesn't this pretty much destroy the systemic risk argument that was used to justify the sweeping changes to the bankruptcy code in 2005, which grants exemptions for derivatives and repos from automatic stay? In other words, if all the counterparties to a bankrupt entity can liquidate the counterparty's collateral they're holding for repos and derivative trades, doesn't that fuel the "wave of selling unlike any we have seen before"?
Thank you ISDA.
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Sorry to disappoint the crowd, but EB does not have "the answer." It is clear from his few responses that he is using these comments to make his own determination. Clever in a way, and popped into my mind right away, as I use this technique all the time on women.
So his guess will be no better than the most thoughtful guesses thus far.
PS The 11 character name doesn't mean squat. It might be a 10 character, or fewer, name. It might be someone who signs with non-letters like this:
--EndStrat.
I do not think the size of the redacted area can be considered much of a clue, A Greenspan would fit an eleven character space, but so would mom and dad. Half the suggestions made so far can be made to fit that space by use of initials with and or without spacing or periods for abbreviations, and then there are titles like Mr. or Sr. or Esq. or III or first name with only last initial like Timothy G. Then there is Brooksley B and RobertRubin, I can see this coming from Born because of her stance on derivatives but not Robert Rubin, he was one of the architects of dismantling regulation.
For that matter if they were close enough friends it could be a nick name like Forty Three which was BushCo's nickname for himself and is also 11 spaces, but seriously, does anyone buy the possibility he could use a Blackberry? Dick Cheney also is eleven spaces, but it just was not anybody in government in my opinion because nobody in government would have had exposure and even if they did they would not have had the training to more or less automatically include the disclaimer in that regard, only people trained in finance would use those terms, or a lawyer within the financial world.
Upon rereading and thinking on it overnight I am more and more going for DominiqueSK, or StraussKahn (note both 11 spaces). It has been nagging me that this can well be a foreigner from the first reading, just something about the language that is for the most part fluent like someone that almost speaks English like a native aside from a few idiosychrocies the way Ricky Ricardo used to not be able to pronounce ing's, but tenses do not match well either, and thru, what is that, slang, not the proper spelling for through. Also, how many uses of the word fed never THE FED.
I did not realize till just now that Levitt was... "Levitt, an adviser to Goldman Sachs and private equity firm Carlyle Group LP, is a Bloomberg LP board member." Any time I see the name Carlyle Group I know something is very rotten in Denmark.
Here is another name, eleven spaces too, Donald Kohn, I was just reminded of in an article on the systemic collapse:
Donald Kohn, who spent 40 years with the Federal Reserve, including as vice chairman from 2006 to 2010, said in an interview.
“First and foremost, the private sector didn’t assess the assets it was buying very well, didn’t look under the hood very hard,” he said. “And the cops weren’t on the beat. Regulators saw some problems coming, but not all of them. I wish we had done more on the mortgage side, but especially on the financial- intermediary side. The private sector didn’t do enough and we didn’t override them.”
This one fits really well, he ticks all the boxes.
I forgot Robert Zoellick (R. Zoellick = 11 spaces) World Bank President at the time. Also ticks all the boxes. In fact I think it is becoming clear we could guess just about any person alive at the time who could read and operate a Blackberry.
Are you going to make us keep guessing till someone gets it right?
The only one I know that has the detailed knowledge, is an outsider to the Fed, but still would be on friendly terms with them (Marc Faber would not) is:
Christopher Whalen.
That guy is awesome. I have never read anything from him where he missed the boat by far, or massively exaggerated tiny things.
That's his style of to the point non-hyperbole writing. And he talks about TBTF on September 13th 2008, so before Lehman failed - did he actually introduce the term TBTF to the public?
I only wonder how he would have had exposure to Lehman - but that might have been rather small and he only mentioned for complete disclosure.
It's EST... so that takes care of the west coast.
Prior comments withdrawn.
Bernie Sanders
ted turner
I would pick Jamie Dimon, but I think JPM had a fairly large exposure to Lehman. So I go with Blankfein.
My intial guess: Lloyd C. Blankfein. Goldman Sachs had pushed for investment bank dergulation around that point in time. They quickly transformed into bank holding companies so that they could qualify for Federal Reserve loans and government bailout money.
But, on reading the email again, then again, I'm going to go with Christopher Cox, head of the SEC at the time - because of his expressed concern for other industries aspects, what should happen in conjunction w/the failure and because the SEC had been investigating Lehman for very skanky trading activities. The SEC had exposure for failing to regulate (what else is new). They were sitting on a mountain of info and did nothing.
Very interesting. The redacted signature line takes up exactly eleven characters and "Christopher" is one of two relatively common names that fits.
You may be right to assume that counting the space in the grey-shaded area will yield the number of characters in the writer's name. However, the grey shade sometimes is much greater than the underlying characters being obscured, viz the FROM: line.
So EB? Who was it?
I'm going with Mervyn King. Something about the language used makes me think of him.
Another interesting eleven character fit in the sig line.
DICK "Nice Trade Dick" FULD -- just kidding
Warren Buffet comes to mind
Becky Quick from Warren's bathtub?
Ted MacDonald Managing Director of D. E. Shaw & Co., L.P., Treasurer of the D. E. Shaw Group The D. E. Shaw Group
the fed chairman
fake
LV Dave for Freddy (freddy was watching TV)
Bill Gross
Dick Fisher
Since the email starts with a "let's assume..." I would bet that is was written by a PhD economist because that's how economists always start off a logical argument....ceterus parabus.
My guess is Larry Summers.
second choice -Janet tavakoli
second choice -Janet tavakoli
Rosie wrote it
I think it was Stephen King with HSBC. He's young enough for the "game over" analogy and they had money tied up and could be considered "we" vs "us" or "them".
Also HSBC was using blackberry phones at that time.
http://asia.cnet.com/crave/hsbc-could-order-200000-iphones-62104510.htm
Hard to believe ... nobody would use a Blackberry to create such a complete and coherent message. It looks like this email took a lot of thought and organization and given its import would not have been done on the fly
And the winner is.... ?
Mary Shapiro or Grace Vogel, because FINRA was involved with trying to get Barclays to
step into Lehman transactions as the counterparty the day after this email (i.e., on September 14.)
The "exposure" cited in the email may refer to shortcomings FINRA had with respect to Lehman oversight.
Ron Paul.
Paulson to Head of CIA, Homeland Security, and Joint Chiefs of Staff.
And then they replied, we will declare martial law?
C. Fred Bergsten, who was indeed a counterparty to both Lehmans and Bear through Nicholas Brady's Darby Overseas Investments.
What's my prize?
Blythe Masters???
General Counsel to the FRB July 2004.....kind of a let down, but I wished they'd have been able to enforce the reversal of 'too big to fail.' Shame.
Lloyd Blankfein
What do I win?
Bawarney Frwank ?
Rockefeller and Soros are also great guesses...
It's annoying that they start every thought with a hyphen like it's some kind of telegram. That said, anyone who would speak in telegram talk would have to be quite elderly and born rich, used to dictating his words all his life, but learned how to type in order to write personal, confidential correspondence to his cronies. This is someone who rides around in the back of a Rolls Royce with a chauffeur driving and has never done his own shopping or cooking...
Who is the oldest, richest guy in America who would know enough to care what the Fed does?
My guess is it was David Rockefeller, Sr.
Defendant Federal Reserve Docum. Production Lehman Part II summer 2008 heavy redactions (Lawsuit #3)
Hmmm: a Boston-based executive of a fund firm with business in Germany? Plenty of references to repo and lots of .de's in some of the Cc: addresses.
Just guessing. Thanks for posting.
Space aliens. You know, those lizard dudes. Or maybe George Soros. Who cares.
<record in Utah> Now
Soros is a lizard.
Actually, that's an offense to lizards.
Cheeky Bastard
Who cares?
This should kill the falacy that "no one knew of the problem at that time." Many knew including the regulators. They simply did not want to upset the apple cart by quickly adopting new regulations and or punishing the guilty.
The FED and Treasury all covereved their "u know what." They are still doing it and blaming the complexity of markets for our problems. Professor Black and others have an answer to our problems, but hell will freeze before anyone listens to them. That is all !!!!!!
One last guess though why this candidate would have disclosed exposure to Lehman I think does not fit, what does fit is his authority and possible first name basis with Kroszner, as well as being from Chicago where Kroszner was FRB governor:
Austan Goolsbee.
Goolsbee was interviewed by Jon Stewart on August 11, 2009;[22] February 1, 2010;[23] October 25, 2010; February 24, 2011; August 3, 2011.
He also appeared in Daily Show segments on November 11, 2009,[24] where he was interviewed by Josh Gad about whether the Cash for Clunkers program had ruined demolition derby and on March 17, 2009[25] where he said that executives at AIG deserved the "Nobel prize for evil". Jon Stewart described him as "Eliot Ness meets Milton Friedman".
Thought that Wiki entry was funny. Really he would fit except for the disclosure. 09/2008 Goolsbee was working on the Obama campaign having become the nominee and probable winner of the general election.
Boiltherich-you have made some excellent educated guesses--no, reasoned judgements. Tip of the hat! Milestones
So how could he have any financial exposure, at all, to Lehman? I'm thinking its a progressive that needs the free markets to do God's work...it's not Blankfein or any of the big Wall Street institutions...they would probably have more than a small amount of exposure to Lehman...but then Kozsner worked for Bush, so maybe my suggestion of a progressive is meaningless...Jeffrey Immelt, the Republican who plays on both sides of the fence? Tyler, you're killing us...tell us please!!!
It was Batman. Just after cornholing Robin.