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Lehman Brothers June 3
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Opinion: Dick Fuld Still Can’t Fess Up To His Part In Lehman’s Collapse
Jun 2, 2015 | MarketWatch
By David Weidner
...Fuld doesn’t always walk that line well, a problem compounded by his analysis of the facts.For example, Fuld said, referring to Lehman’s employees, “regardless of what you heard about Lehman’s risk management, we had 27,000 risk managers because they all had a piece of the firm.”... -
Former Bank Exec Refuses To Acknowledge Part In Market Crash
Jun 2, 2015 | Mortgage Professional America
By Justin da Rosa
The former head of Lehman Brothers believes it’s the homebuyers who took on high risk loans prior to the economic downturn – and the government that allowed such loans -- who should shoulder most of the blame for the recession. "Did we try to do everything we possibly could? Yes. Did we fall prey to other agendas? I'll leave it at that," Dick Fuld... -
In Lehman’s Last Days, Merrill Lynch May Have Allowed Illegal Bets Against Firm
Jun 2, 2015 | MarketWatch
By Steven Goldstein
It looks like former Lehman Brothers CEO Dick Fuld is at least partly right — that at least one Wall Street bank illegally allowed short sales against the now-bankrupt firm in its waning days. That’s derived from a Securities and Exchange Commission suit against Merrill Lynch released Monday, and an analysis... -
Moody's: Recoveries from Lehman Brothers' Swap Claims Limited Losses in Five UK RMBS Deals
Jun 2, 2015 | Moody's
In five UK non-conforming RMBS deals where Lehman Brothers Special Financing Inc. acted as the currency swap counterparty, the recovery proceeds from the claims on defaulted currency swaps and the sale of the remaining claims were sufficient to restructure the transactions and limit note holders' losses, says Moody's Investors Service...
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Dick Fuld
Merrill Lynch
UK
Full Text of Stories Below
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Opinion: Dick Fuld Still Can’t Fess Up To His Part In Lehman’s Collapse
Jun 2, 2015 | MarketWatch
By David Weidner
Unlike many critics, I’m not a Dick Fuld basher.
To me, there are far too many other culprits for the financial crisis and bailouts who either have been lionized or too easily forgiven. Jamie Dimon at J.P. Morgan Chase & Co. JPM, -0.09% and Brian Moynihan at Bank of America Corp. BAC, +1.03% are two who come to mind in the private sector. Alan Greenspan, the former Federal Reserve chairman, and Christopher Cox, the former head of the Securities and Exchange Commission, are public sector examples.
Had Fuld’s Lehman Brothers Holdings Inc. been saved in the bailouts, chances are he’d probably would have held onto his job like Dimon, or Lloyd Blankfein at Goldman Sachs Group Inc. GS, -0.66% .
...Fuld doesn’t always walk that line well, a problem compounded by his analysis of the facts.
For example, Fuld said, referring to Lehman’s employees, “regardless of what you heard about Lehman’s risk management, we had 27,000 risk managers because they all had a piece of the firm.”
Which is like saying the Knicks would win the NBA championship if only the players owned part of the team.
Fuld also disputed the Lehman’s abrupt end seven years ago. He said Lehman was “mandated into bankruptcy” and that its equity capital was $28 billion. Fuld has a strange view that Lehman is unique because it was forced into bankruptcy.
Guess what? Everyone in bankruptcy was forced into it by creditors. Just like Lehman. Lehman had $613 billion in debt when the investment bank filed under Chapter 11 of the U.S. Bankruptcy Code. Does Fuld think anyone was going to lend an investment bank and bond house money with a 613-to-28 ratio of debt-to-equity capital?
Fuld’s insistence on denying reality, even after seven years, is the reason Lehman is a casualty of the financial crisis and not a survivor. The real story: After the emergency sale of Bear Stearns Cos. in 2008, Lehman and Fuld ignored the steep losses the brokerage was suffering. Lehman continued to use hedges to offset losses. The hedges weren’t nearly enough to assuage creditors that Lehman wouldn’t go under. Fuld wouldn’t acknowledge how bad it was and this made creditors nervous.
That’s why it was so easy to write in a June 2008 MarketWatch column, published months before Lehman failed, that: “Lehman received a temporary reprieve from the Federal Reserve’s decision to lend to brokerages. To many, the government’s backing would allow Fuld to give the go-ahead to raise capital, sell assets and unwind some of the poison in its system.
“But it either didn’t happen or didn’t happen fast enough. And pretty soon, David Einhorn, a hedge fund manager at Greenlight Capital, was pounding Lehman in speeches, interviews and on TV. Einhorn was honest. He was shorting the stock, but he also had the numbers to back him up.”
Ultimately, Fuld can continue to blame the short-sellers, the hedge fund guys and Lehman’s rivals for pushing the firm asunder. But it was Fuld who was paid $22 million in 2007, handed $41 million in restricted stock, and given a package worth $51 million the prior year.
That’s the kind of sum paid to someone who’s supposed to know their market well enough to avoid getting pushed into bankruptcy. In other words, it’s the kind of money you give a true chief executive, not a gorilla.
For full story:
http://www.marketwatch.com/story/dick-fuld-still-cant-fess-up-to-his-part-in-lehmans-collapse-2015-06-02
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Former Bank Exec Refuses To Acknowledge Part In Market Crash
Jun 2, 2015 | Mortgage Professional America
By Justin da Rosa
The former head of Lehman Brothers believes it’s the homebuyers who took on high risk loans prior to the economic downturn – and the government that allowed such loans -- who should shoulder most of the blame for the recession.
"Did we try to do everything we possibly could? Yes. Did we fall prey to other agendas? I'll leave it at that," Dick Fuld said at a press conference held in Manhattan on Thursday, according to CNN.
Fuld recently, the former chief executive officer of Lehman Brothers, made his first public appearance since the economic downturn on Thursday.
He laid most of the blame at the feet of government officials who made it possible for poorer families to get into the housing market, believing they helped trigger the economic downturn.
“It’s not just a one single thing, it’s all these things taken together,” he said, according to ThisisMoney, a British finance website.
It also appears he was willing to throw his former colleagues under the proverbial bus.
“Regardless of what you heard about Lehman Brothers’ risk management, I had 27,000 risk managers because they all owned a piece of the firm,” he said.
The speech marked the beginning of a comeback of sorts for the disgraced former executive...For full story:
http://www.mpamag.com/news/former-bank-exec-refuses-to-acknowledge-part-in-market-crash-22732.aspx
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In Lehman’s Last Days, Merrill Lynch May Have Allowed Illegal Bets Against Firm
Jun 2, 2015 | MarketWatch
By Steven Goldstein
It looks like former Lehman Brothers CEO Dick Fuld is at least partly right — that at least one Wall Street bank illegally allowed short sales against the now-bankrupt firm in its waning days.
That’s derived from a Securities and Exchange Commission suit against Merrill Lynch released Monday, and an analysis by Eric Hunsader, the founder of trading analysis firm Nanex.
...Hunsader says the stock fits the description of Lehman, which dropped 14% that day on heavy volume of 109 million shares.
A week later, Lehman declared bankruptcy.
Fuld has frequently taken aim at illegal short sellers. “History has already shown how wrong and ill-advised it is to allow naked short selling,” he said at a 2008 hearing.
Minus the illegal short sales — and had Lehman been granted the lifeline of a Federal Reserve banking license that Goldman Sachs and Morgan Stanley received — the firm could well be alive, Fuld has argued.
That’s not to discount Fuld’s own role, however, in levering up Lehman, aggressively securitizing subprime mortgages, keeping mortgage-backed paper on the company’s books and performing dubious accounting maneuvers.
Merrill Lynch admitted the short-selling violations and agreed to pay an $11 million fine. Press officials at Merrill didn’t return a message about whether the stock in question was Lehman.
For full story:
http://www.marketwatch.com/story/in-lehmans-last-days-merrill-lynch-may-have-allowed-illegal-bets-against-firm-2015-06-02
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Moody's: Recoveries from Lehman Brothers' Swap Claims Limited Losses in Five UK RMBS Deals
Jun 2, 2015 | Moody's
In five UK non-conforming RMBS deals where Lehman Brothers Special Financing Inc. acted as the currency swap counterparty, the recovery proceeds from the claims on defaulted currency swaps and the sale of the remaining claims were sufficient to restructure the transactions and limit note holders' losses, says Moody's Investors Service in a new report published today.
"The recoveries exceeded our initial expectations. On average, the total recoveries achieved through the claim distributions and the sale of the remaining claims equalled 63% of the total claim amounts. We had expected recoveries to amount to 45% of the claim amounts," observes Carole Bernard, a Moody's Vice President -- Senior Analyst.
"The default of a currency swap counterparty does not necessary lead to an immediate loss or default to the transaction. Other factors also come into play, such as the deal structure, cash flow distribution, excess spread and available liquidity, as well as the market's spot rate and interest rate," she says.
Eurosail-UK 2007-5NP PLC, Eurosail-UK 2007-4BL PLC, Eurosail-UK 2007-6NC PLC, Eurosail PRIME UK 2007-A PLC and EMF-UK 2008-1 PLC were exposed to currency-exchange-rate risks after Lehman Brothers filed for bankruptcy in 2008.
The new report: "Eurosail - UK RMBS Series: Sufficient Recoveries from Lehman Brothers' Swap Claims Limited Losses in Five UK RMBS Deals" is available on http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_1005256.
Since April 2012, the transactions have received multiple distributions from the claims against Lehman Brothers Holdings Inc. and Lehman Brothers Special Financing Inc. on the defaulted swaps. The issuers then sold the remaining claims in the market in 2013 and 2014. Following the sale, the transactions underwent restructuring using the received recovery proceeds. The restructuring aimed to distribute the recovery proceeds and eliminate future currency risks...
For full story:
https://www.moodys.com/research/Moodys-Recoveries-from-Lehman-Brothers-Swap-Claims-Limited-Losses-in--PR_326827
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Dick Fuld
Merrill Lynch
UK
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