“Within a week, Wall Street as it was known — loosely regulated, daringly risky and lavishly rewarded — was dead.”
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Today’s must read MSM article is a front page WSJ piece, titled, The Weekend That Wall Street Died. Since we have been tossing around blame for various parties in the entire credit/hosuing/securitization debacle, its refreshing to see a major paper actually place blame where it (in large part) belongs: Wall Street bosses:
“For the U.S. securities industry to unravel as spectacularly as it did in September, many parties had to pull on many threads. Mortgage bankers gave loans to Americans for homes they couldn’t afford. Investment houses packaged these loans into complex instruments whose risk they didn’t always understand. Ratings agencies often gave their seal of approval, investors borrowed heavily to buy, regulators missed the warning signs. But at the center of it all — and paid hundreds of millions of dollars during the boom to manage their firms’ risk — were the four bosses of Wall Street.
Details of these CEOs’ decisions and negotiations, many of them previously unreported, show how they sought to avert the death of America’s giant investment banks. Their efforts culminated in a round-the-clock weekend of secret negotiations and personal struggles to keep their firms afloat. Accounts of these events are based on company and other documents, emails and interviews with Wall Street executives, traders, regulators, investors and others.”
The other factor worth noting is that the mainstream press — first Bloomberg, now WSJ — has come around to blaming Fuld for not doing what ha d to be done to rescue Lehman Brothers.
Its a bit longish but well worth reading.
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Source:
The Weekend That Wall Street Died
SUSANNE CRAIG, JEFFREY MCCRACKEN, AARON LUCCHETTI and KATE KELLY
WSJ, DECEMBER 29, 2008
http://online.wsj.com/article/SB123051066413538349.html
Previously:
Gasparino/Fuld vs Einhorn, Kohn & Ritholtz (June 2008)
http://www.ritholtz.com/blog/2008/06/gasparino-vs-einhorn-kohn-ritholtz/
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