Sorry. I left bear stearns in 2005 and was at Lehman when it fell. Even in 2004, we were making fun of the sub-prime garbage Bear was spinning into deals. Yes it was hasty, but the brokerage side was complaining about the leverage many months before the fall, and the one member of the board who did the same was soon removed.
Lehman was playing games with its books at least 3 quarters before its bankruptcy. The FT had a great series on how only 1 law firm in the UK would sign off on the derivatives Lehman used to move liabilities off the books. On the floor, people were snickering in July when the CFo, Erin Callan, said we didn’t need support.
The shorts didn’t kill these firms, the arrogance of management did. Sorry, but Lehman at the very least deserved worse. Between Archstone and the sub-prime loans, LEH was a zombie by the spring.
Thank you for your contribution. One truth, when it does not obviate a second truth, presents aspects of the same truth, when they are seen together.
As I stated in the article, naked short selling was not the only factor. However, this does show how money in the stock exchanges is vulnerable to mega-criminal thievery, whether from dishonest C-levels and boards of directors, or from inside or outside manipulators, or both.
And whomever is guilty of what, at what stage, the stockholder is the victim of the theft, not just another trader taking a market risk.