The Inside Story of the Collapse of Lehman Brothers.
The author wrote in the Prologue to this 2009 book, “If only (CEO) Dick Fuld had kept his anger, and rudeness under control. Especially at that private dinner in the spring of 2008 with Hank Paulson, secretary of the United States Treasury. That was when Fuld’s years of smoldering envy of Goldman Sachs came cascading to the surface and caused Paulson to leave furious that the Lehman boss had disrespected the office he held. Perhaps that was the moment Hank decided he could not bring himself to bail out the bank controlled by Richard S. Fuld.” (Pg. 3)
He argues that in the 1990s, “Banks were compelled to jump into line, and soon they were making thousands of loans without any cash-down deposits whatsoever… Mortgage officers inside the banks were forced to bend or break their own rules in order to achieve a good Community Reinvestment Act rating… Easy mortgages were the invention of Bill Clinton’s Democrats.” (Pg. 4)
He observes, “this was the starting point of America living in a false economy… All bubbles, down the centuries, have started that way, leading to the inevitable time when people begin to think it’s normal, that nirvana has finally arrived… people all over the planet began to believe this was a brand-new easy-money world. But of course it wasn’t.” (Pg. 77) He recounts, “the Lehman mortgage guys wore those smug expressions as they walked through the hallways, supremely confident… they became… demigods who rubbed shoulders with the mighty, who saw, and sometimes even spoke to, Fuld and Gregory… Whatever they needed… they got.” (Pg. 110-111)