Friday, September 11, 2009
Thursday, September 10, 2009
The first part of the speech was necessarily complicated but was to some extent rescued by the exhortatory peroration and conclusion. The situation still looks functionally intractable to me - too many members of Congress in the pocket of insurers etc. - but I have no doubt some illusory plan will emerge. The behavior of the Republicans - Boehner, in particular, who for some reason didn't show up in full SS regalia although he was clearly dreaming of Polish villages to liquidate - was despicable.
" The property portfolio doomed Lehman when a rescue still seemed possible. On Saturday, Sept. 13, 2008, Timothy Geithner, then president of the Federal Reserve Bank of New York and now U.S. Treasury secretary, asked a team of the world’s top bankers to evaluate Lehman’s real estate holdings as part of an effort to facilitate a sale of the investment bank to London-based Barclays Plc.
The team, including representatives from Goldman Sachs and Credit Suisse Group AG, determined that Lehman had overvalued its real estate investments by $20 billion to $30 billion, according to people who attended meetings at the New York Fed last September."
This, from Bloomberg this morning, validates what I, virtually alone since October, have been saying with regard to Washington's decision to le Lehman go. It wasn't Fuld's arrogance, or Barclay's being held up by UK regulators (a straw man of an excuse, if ever I heard one) that doomed Lehman, it was the firm's commercial real estate book - which set it apart from other supplicants, mainly Merrill. Here's what I wrote on Forbes.com on October 7,2008, three weeks after Lehman failed:
"Think about this. Every report on Lehman that I have recently read is saying that the real toxicity on the Lehman balance sheet is in its commercial real estate holdings and investments. Of no other troubled firm does this seem to be true, only Lehman, which may also explain the Paulson team's no-bailout call."
No wonder I can't find work. There's no one the mediocrities who run American media hate worse than someone who knows what he's talking/writing about.