Reader comments at The New York Sun - The Lehman Blame Game Gets Rolling

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The Lehman Blame Game Gets Rolling

Submitted by Joachim Schnabel, Sep 16, 2008 07:52

I have a handout (now a classic), dated February 2005, by Rick Rieder, then one of Lehman's chief strategists. He forecast that innovation in risk-avoidance (the whole alphabet soup of CDO's etc.) will cause higher leverage with increased systemic risk. I quote his conclusion "It would be no surprise to anyone if that bubble burst at some point...it always does...". He was wrong, his own employers, among many others, were surprised.

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Comment	By	Date
AL: Interest income no longer covers interest expense. Happens when rates rise, the payors default on mortgages and pay less,... [MORE]	Joachim Schnabel	Sep 16, 2008 19:05
To anybody who is familiar with how "the game" is played on Wall Street, John Thain's agility in the midst... [MORE]	Brendan	Sep 16, 2008 18:45
I don't get it. Firms go bankrupt because their cash flow runs out, not because their share price goes down... [MORE]	AL	Sep 16, 2008 15:17
When all the so-called "intellectuals and experts" get done with their guessing as to why this mess occurred, there will... [MORE]	Porterhouse	Sep 16, 2008 10:52
I have a handout (now a classic), dated February 2005, by Rick Rieder, then one of Lehman's chief strategists. He...	Joachim Schnabel	Sep 16, 2008 07:52

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The Lehman Blame Game Gets Rolling