Occasional blogging, mostly of the long-form variety.

Monday, March 15, 2010

Lehman's Dirty Moves

This segment on Dylan Ratigan's show with Eliot Spitzer does a pretty good job of explaining Lehman Brothers' dirty moves:

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One of the first major stories on Lehman Brothers was The New York Times' piece "Report Details How Lehman Hid Its Woes." Their Lehman category has many more articles, and is sure to have more.

After the Enron scandal broke and the key details emerged, The Washington Post did an excellent five-part series it ran over the course of the week. I remember I saved them up and read them all at once, flipping back though the articles to look at charts and key passages again. I also checked out one of the earlier books on the Enron scandal from the library (at least two other good ones came out later). The Enron accounting scams were complex and their mechanics were difficult to understand because they were designed to be that way. One of the better scenes in Michael Moore's (good but uneven) film Capitalism: A Love Story shows him talking to a Wall Street guy who's trying to explain how Credit Default Swaps and some other fancy financial tricks work. The guy also says that if, as a regulator you came into a Wall Street firm and could actually understand what they were doing - the implication being you could put a stop to it - they'd offer you a job.

It's not that hard for financial companies to make profits, even ridiculously high profits, without completely screwing over their customers and destroying the world economy. There needs to be much greater oversight of these companies, whether it's through new regulations, greater enforcement of the existing ones, or a robust Consumer Protection Agency. Really, all three are needed. However, investigating, prosecuting and imprisoning some of high-ranking scoundrels at Lehman Brothers and other firms would also go a long way toward curbing this sort of unethical, reckless behavior.

 

1 comment:

Cirze said...

Which ensures that none of it will ever be done.

Not in our lifetime anyway (if they (the users) get their way).

Thanks for the video. Have you read House of Cards? by William D. Cohan? It's quite good on this although it doesn't have the new graft items (which continue to emerge). And then, of course, there's still Eliot Spitzer's inside info that got him outed but fast. Good book, though.

S

Really, all three are needed. However, investigating, prosecuting and imprisoning some of high-ranking scoundrels at Lehman Brothers and other firms would also go a long way toward curbing this sort of unethical, reckless behavior.
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