The Murder of Lehman Brothers: An Insider's Look at the Global Meltdown [Hardcover]

Joseph Tibman (Author)

Book Description

Publication Date: October 15, 2009

The Murder of Lehman Brothers sheds light on the perfect, complex storm that led to Lehman's collapse and the ensuing global consequences. It includes a brief history of Lehman, highlighting certain notable events, including a previous near collapse, the rise of Richard Fuld and the one-firm culture, the repeated mistakes made by providers of credit, inventing new financings—rationalizing that while profitable, these risky endeavors are actually not risky, more specifically subprime mortgages and Lehman's role, as well as an internal battle over Lehman's embrace of a massive real estate book, the emergence of Lehman as a top tier firm, the unraveling that began with the subprime meltdown, and gained vigor with the fall of Bear, and the consequences of Lehman's fall.

Editorial Reviews

Review

"Tibman offers a version which feels true."

"a strong sense of Lehman’s history, including what Tibman sees as Fuld’s finest hour, the aftermath of 9/11...This doesn’t mean he lets Fuld off for his many mistakes, and Tibman is good on the way Fuld’s embattled, paranoid worldview had seeped into the mentality of the bank, and helped prevent people realising just how deep a hole they were in." --John Lanchester in The London review of Books

"Everyone knew that subprime lenders aided and abetted mortgage fraud. To my knowledge, the only investment banker who wrote candidly about the subject was Joseph Tibman, who was at Lehman when it collapsed, and wrote The Murder of Lehman Brothers: An Insider’s Look at the Global Meltdown."

"Tibman believes that as much as anything, what killed Lehman was Fuld's emasculation of the risk management function, which served as a moral compass." The Huffington Post, David Fiderer

"What it does better than anything else is humanize a firm and its employees in a way that's been rare of late."

"The Murder of Lehman Brothers" is a better book [than A Colossal Failure of Common Sense]"

"He [Tibman] presents a more nuanced portrait of the firm, its leadership, particularly CEO Richard Fuld, and the rank and file."

"So who (or what) killed Lehman? Tibman presents a more complex and shifting judgment, which is one of the strengths of the book."

"...moves quickly and inexorably."

"...the lesson from Tibman's memoir of Lehman is the profound ambiguity of a seductive culture and an all-powerful, if Wizard of Oz-like leader." --The Deal Magazine

"What's interesting about this read is that it provides you with a different viewpoint of the crisis from the inside."

"...this account is fresh, opinionated, and truly has a tenured insider feel."

"Given that so much greed (and irrationality) often abounds on Wall Street, the fact that Tibman's work takes aim at this is laudable." --Seeking Alpha

"I recommend you read The Murder of Lehman Brothers to find out why the financial crisis happened."

"This is the only [financial crisis book] that brings Wall Street culture to life and shows how reckless excess was fed by Washington politicians."

"'Joe' doesn't pull any punches with his mea culpas about "drinking the Kool-Aid," "rationalizing away risks...of delusional financiers."

"I'm touting this book not only because it rings true about the Wall Street I know, but because it implicates the Washington political leaders who paved the way for Wall Street's excessive risk taking and predatory lending." --Capital Gains and Capital Games

"The Murder of Lehman Brothers is a compelling narrative of one insider's journey within the burning walls of the failed investment bank... a fresh account" --Market Folly

"One of the best books on the financial crisis so far."

"A vibrant and straight account from a veteran insider"

"..goes beyond simply casting the blame on Fuld and his first circle'...and depicts the pernicious effects of American economic policy."

"The book is particularly valuable because it presents a more human figures of what has become the symbol of this financial crisis without trying to settle personal accounts." Lehmanites.com

"Tibman has probably written the most user-friendly account of LB's demise and guide to the economic collapse of 2008."

"His first-person perspective provid[es] a connection with the events and the firm that is missing from the many other books on LB."

"...much of what he has written appears sincere and genuine, written with a welcome bluntness and honesty." --Civilian Reader (UK) - Stefan Fergus

"This is a great story narrated by someone that is quite candid in the wheeling and dealings of a once proud investment banking firm."

"... highly readable... and well paced...insight that will keep you turning the pages." --BookPleasures

"Joseph Tibman, you've written a great book."

"A fascinating history that covers nearly 20 years of Dick Fuld's rise and fall at Lehman."--Donald R. van Deventer, PhD - Kamakura

"Explosive"--N'Digo Chicago Weekly, Matthew Sapaula, Host of Money Smart Radio

From the Publisher

The Murder of Lehman Brothers sheds light on the perfect, complex storm that led to Lehman's collapse and the ensuing global consequences. It includes a brief history of Lehman, highlighting certain notable events, including a previous near collapse, the rise of Richard Fuld and the one-firm culture, the repeated mistakes made by providers of credit, inventing new financings--rationalizing that while profitable, these risky endeavors are actually not risky, more specifically subprime mortgages and Lehman's role, as well as an internal battle over Lehman's embrace of a massive real estate book, the emergence of Lehman as a top tier firm, the unraveling that began with the subprime meltdown, and gained vigor with the fall of Bear, and the consequences of Lehman's fall.

See all Editorial Reviews

Product Details

• Hardcover: 245 pages
• Publisher: BRICKTOWER; 1st edition (October 15, 2009)
• Language: English
• ISBN-10: 188328371X
• ISBN-13: 978-1883283711
• Product Dimensions: 9.1 x 6.2 x 0.9 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (18 customer reviews)
• Amazon Best Sellers Rank: #137,902 in Books (See Top 100 in Books)

More About the Author

I have written "The Murder of Lehman Brothers, An Insider's Look at the Global Meltdown." Writing it was unexpected. I was a a senior investment banker at Lehman where I worked for about 20 years. Over this period of time I watched Lehman rise from the dregs of investment banking to occupy a top-tier position. I like to think that I played a very small part in that ascent.

Why did I write the book? Lehman, my second home for many years,was the linchpin that sparked the greatest financial crisis in the lifetime of anyone who wasn't around for the Great Depression. This deeply affected me. Also, I was certain there would be a string of Lehman books written and I realized that the list might include only books that were tabloid, oversimplified, or both. I wanted to be sure they would be at least one sober account among the many.

As many have said and written, it is true that there were a small number of people within Lehman's highest ranks who determinedly accumulated a massive, eventually toxic real estate exposure. At the same time, there were many external factors that created the conditions for the credit bubble and the Lehman sparked global financial meltdown. There are also those whose judgment was faulty at key junctures. Unfortunately, to date little has been done to address the conditions that enable a small number of individuals to trample all who stand in their way as they put not only their own financial institution at risk but the world as well.

Many people who are not in finance may not fully understand the perfect storm that led to Lehman's demise and the financial panic. My hope is that after reading my book such a reader will understand far more clearly exactly what went down and understand that we remain at risk.

Customer Reviews

Most Helpful Customer Reviews

46 of 54 people found the following review helpful:

5.0 out of 5 stars An absrbing and enlightening book by an honest insider, October 29, 2009

By 

accidentalreviewer "accidentalreviewer" (Somers, NY) - See all my reviews

This review is from: The Murder of Lehman Brothers: An Insider's Look at the Global Meltdown (Hardcover)

I am a retired college professor. Like most Americans, I am not expert in finance and economics. Fortunately my retirement savings are conservatively invested, and so I did not suffer life-changing losses after Lehman filed for bankruptcy protection, but I know many who did. Like many, I found myself anxious to understand what had happened to cause such hardship for so many people. I have never before written an Amazon review, but am inspired to do so now because reading "The Murder of Lehman Brothers" profoundly transformed and deepened my understanding of the financial crisis. As a former educator I am immensely impressed by this book. It explains the financial crisis for a reader who is not an economist or a financial professional. At the same time, like the most enjoyable of books, I could not put this down. I was hooked as soon as I read the prologue.

I am not generally a reader of business books. However, because the financial crisis has so deeply affected out country, I wanted to understand its causes. While I knew the crisis could not be solely blamed on Lehman Brothers, I thought a Lehman book would explain what happened at that investment bank in a larger context. I saw Lawrence McDonald's "Colossal Failure of Common Sense," a book by a former Lehman employee, on the New York Times bestseller list and decide to give it a try. The book was a highly readable disappointment. It did in fact simplistically blame the Lehman failure on a handful of Lehman executives, and did so with considerable anger. It is a given that large global events are rarely so easily explained.

Several weeks later I came across Joseph Tibman's book. To be honest, the dramatic title was initially a turn-off. I expected the book to be mainstream pulp by a greedy investment banker seeking to cash in on the crisis. However, as I flipped through the book, I could see that this was actually something very different. There were chapters devoted to the causes of the crisis. Also, I noticed that there were a substantial number of footnotes on many of the pages. These explain financial terms and concepts so that a reader like me can more thoroughly understand what happened.

most importantly, this book enables its readers to understand events that were previously too technical to grasp. At the same time this is by no means a textbook. In fact the prologue and ther passages read like a novel. What Tibman accomplished is a neat trick that, as a published professor, I know is extraordinarily difficult. He has written a book one "cannot put down,' a page-turner that also teaches. After completing "The Murder of Lehman," I found myself explaining the financial crisis to friends. To my great surprise, when they challenged my reasoning, I was able to substantively respond. It was only then that I realized that the book subtly allowed me to form my own view of certain events open to interpretation. While Tibman has many strong views and an ability to communicate his incites, not everything in "The Murder of Lehman Brothers" is presented as black ans white. This is one of the books accomplishments. It does not pretend to have all of the answers. As is always the case with events of this magoitude, years hence historians will disagree about this financial meltdown.

The Murder of Lehman Brothers begins with an excellent prologue that reads like a novel. It was this that initially hooked me, and led me to explore further. The first chapter is summarized history of the firm. While I read it, there were interesting passages that may not be similarly appreciated by younger readers -- the firm financed industries that were a backdrop to many years of my life. At the same time, this is a chapter for all to read carefully. I found myself, flipping back to it. Much that occurred years ago formed a basis for, or at least foreshadowed, what would later happen to the firm. This larger context always exists, but in books of this type (non-fiction that is has many elements of a memooir) is often absent. The next chapter, on the aftermath of 9/11 at Lehman is the most emotional chapter. It is here that you see Tibman's passion for Lehman Brothers most poignantly expressed. Tibman also had the good sense to forego gruesome descriptions of the 9/11 assault. Instead you hear a very American tale of people subsequently coming together under adversity. It was also, in reading this chapter, that as a lifelong liberal Democrat I viewed investment bankers as people rather tha greed driven tacit criminals operating within laws they had lobbied for in Washington.

From this point forward the author begins to explain the roots of the financial crisis, skillfully weaving this into his narrative. The tender feelings for Lehman investment bankers and traders in the 9/11 chapter were mitigated by the questionable ethics among many in the financial world that are later described. Of course, this is as it should be. Little in this book is presented as black and white. Consistent with this, while the author clearly lays a great deal of blame for the current economic crisis at the feet of politicians and regulators in Washington, he does not pick sides. Given my own political views, I was initially unhappy and disappointed that Tibman was outspoken about failings of the Clinton administration. I told myself that after all he was turning out to be a typical Wall Street Republican. But then, tt wasn't long before I saw Tibman equally criticize Republicans. A positive of this book is that in the tradition of journalism I was unable to discern Tibman's political leanings. It is, however, apparent that he views few in Washington as up to the job of regulating the financial sector.

Much of the balance of the book explains the unfolding crisis at Lehman. While Tibman doesn't interupt this with calls for change, it is difficult to see how anyone, Republican, Democrat or Independent, could come away from this book without realizing that economic recovery by itself is not a fix for all that is wrong in Washington and financial markets. While Tibman does not preach, it is clear that he intends this book in part as a call to arms. In fact he quotes from the film "Network" a scene where a newscaster encourages his viewers to open their windows and shout, "Im mad as hell and I'm not going to take it anymore."

While there is even more to praise than that which I have covered in this review, in the interest of balance I will point out the few shortcomings of the book. As mentioned above, it is part narrative and therefore, by definition, is not without indulgence. Of course, it is also the personal aspect of the book that makes it so compelling. I'm not sure this could be avoided by any insider writing such a book, but it is an imperfection. Additionally, in a chapter or two, while explaining many of the causes of the financial crisis, Tibman moves back and forth in time. This did not derail me, but a discussion of events in perfect chronological order could have made for a somewhat smoother read.

These are minor complaints. I have been lending the book to friends and I recommend it to everyone who can read. I suppose the book may reveal less to many on Wall Street than to the rest of us. Still, the book makes clear that Wall Street must change. It could do no harm for financial professionals who shoulder a substantial portion of the blame for what has happened to our country to hear from one among them this outcry. To Tibman's credit (perhaps facilitated by writing under a pseudonym) he makes no excuses for his own place in an industry where ethics are not a consideration. Such admissions are uncommon.

38 of 49 people found the following review helpful:

3.0 out of 5 stars The Suicide of Lehman Brothers, October 24, 2009

By 

David Bahnsen (Newport Beach, CA United States) - See all my reviews
(REAL NAME)   

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This review is from: The Murder of Lehman Brothers: An Insider's Look at the Global Meltdown (Hardcover)

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I am not really sure where to start in reviewing Joseph Tibman's new book, The Murder of Lehman Brothers. Like the preceding book on Lehman's extraordinary fall (see my review of A Collosal Failure of Common Sense here), there is plenty of riveting stuff here, especially if read as a narrative. I should start my review by informing readers that we do not know who the author is. Joseph Tibman is an alias (shorthand for "The Investment Bank Man"), as the author has chosen to write anonymously so as to preserve opportunities in the investment banking world. The author writes as an "inside investment banker" at Lehman Brothers, and unfortunately, lacking an identification of the author or validation of his credentials, it is difficult to evaluate what kind of "inside" look at the self-destruction of Lehman we are getting. Lawrence McDonald was a regular bond trader at the firm who admitted to having never met CEO Richard Fuld. "Tibman" was not a trader but rather a banker, and he does provide an interesting look at the firm's post-9/11 inertia which makes for enjoyable reading. He also gratefully skips much of the personal biographical component that I believe hindered the drama of McDonald's book (no offense, but I doubt readers were buying either of these books for the childhood tales of people they have never heard of). So I commend this book in the sense that it is an interesting read on some of the events that transpired at Lehman Brothers. Unfortunately, some other elements to it require undressing.The narrative of this story, as compelling as it is on its own, is hindered by many of the ideological flaws that surround the telling of the narrative. I will address these in no particular order.

(1) The incessant theme that many Lehmanites have had that "if the shoe were on Goldman's foot, the government would have bailed them out", is tired and frankly absurd. It misses the only point that needs to be made about this entire mess: It wasn't Goldman Sachs who blew themselves into smithereens. Envy of Goldman's superior performance to their competitors is certainly forgivable, for human nature has not been transcended, but rank speculation about what "woulda coulda" been based on Paulson's past relationship with Goldman Sachs is both unattractive and contrary to common sense wisdom. In the weeks after Lehman's collapse when the global crisis of confidence did land on Goldman's doorstep, the treasury department actually refused to extend to Goldman the backing of a deal with Wachovia, a decision Warren Buffett deemed "inevitable" based on the political appearance of it. So no, I do not believe the treasury department would have bailed out Goldman Sachs on September 12, but far more importantly, they didn't need to. Goldman hedged their subprime exposure; Lehman tripled down on it like an alcoholic in the midst of a bender trying to suck down the last sip he can find in the mini-bar. Goldman has reported one negative quarter in the last century; Lehman's collateral, equity, and free cash flows were not in the same stratosphere as Lehman's. I am not trying to play the grand apologist for Goldman Sachs, though I have far more complimentary things to say than I do negative. But I find Tibman's tantrum about the treatment Lehman got relative to the treatment he thinks Goldman would have received to be a real detractor to the book.

(2) I am not sure what could have possibly driven Tibman to pepper the book with [very unconstructive] pot shots at George W. Bush. If these shots had been speciifc to policy errors that were relevant to the financial crisis, or Lehman in particular, I would be more sympathetic. But the shots reak to me of rank political pandering. He is an easy target, of course, but it is demeaning to the readers of the book. Does Tibman criticize Bush's housing policies? Of course not - Bush simply carried on the idiotic mandate of Carter's CRA and Clinton's Fannie-Maeism. Does he criticize Bush's spending? No. And at this point, as horrific as Bush's spending was, hasn't it been positively dwarfed by the new administration? So as far as his role in the financial crisis is concerned, I don't see where Tibman draws any lines of interest. Instead, he lets us know in a not-so-subtle way that he was opposed to the Iraq war, and he thinks Bush is really stupid. Editor, where art thou?

(3) I have to spend the bulk of my time in this review focused on the major flaw of this book, and that is the way Tibman handles his disgust that Lehman was not bailed out by the federal government. My treatment of this financial crisis (through the three dozen book reviews I am writing and my own subsequent treatment of the subject) will have to deal with how Uncle Sam handled Lehman Brothers. And believe it or not, even a deep free market ideologue like me believes that there is room for discussion on what the government could have done differently here. But Tibman's treatment of this subject is so off base, it warrants dramatic correction.

Suffice it to say, Tibman, a paid employee of Lehman Brothers who is no longer working in investment banking (for now), believes that if Uncle Sam had simply agreed to cough up $50-65 billion on that fateful weekend in September of 2008, the entire crisis would have been averted. Lehman would have found a partner. The credit markets would not have collapsed. "Through time" (no one ever provides detail on how time would have solved the utter insolvency of a dysfunctional organization) confidence would have been restored, a new partner would have repaired the impairments, and all would be well in the world. Not only was this outcome achievable to Tibman (it was not), but it was morally imperative (and it certainly was not that either). To Tibman, the fact that Bear Stearns got the deal they got in March made it a requirement that Lehman get something similar. He also appeals to the Fannie and Freddie bailouts of the week prior, as well as the AIG bailout just two days after the Lehman bankruptcy as a basis for his claim of injustice (all prima facie acceptable claims). He holds back nothing in tearing Henry Paulson to pieces, insulting his intelligence, his character, and most bizarrely, his "strict ideology." So here I go ...

Hank Paulson was no "rigid free market ideologue", and to suggest so is simply incomprehensible. Paulson was the author of the TARP bill, and perhaps the most moderate member of Bush's cabinet. It is quite ironic that the only people who criticize Paulson for his "excessive laissez-faire economics" are those that seem to think government bailouts of everyone and anyone is the desired policy of choice. The vast majority of the criticism of Paulson comes from laissez faire folks who are offended by his interventions in the market. It can't be both ways. But let's look at these bailouts, one by one.

Bear Stearns was not bailed out by the Treasury Department. In fact, Paulson refused to. The Federal Reserve intervened, appealing to their "exigant circumstances" clause of the 1920's that gave them legal right to. They did so by backing the assets that JP Morgan would be buying. JP Morgan took on the first $1 billion of risk, and the Federal Reserve the next $29 billion. Time will tell how this works out for the investment bank. The reality is that this intervention appears to me to be what gave the powers that be at Lehman Brothers the false belief that they could stubbornly refuse to de-lever this bloated balance sheet, play truth-or-dare with their write-downs, and avoid taking on the outside partner they desperately needed. So yes, moral hazard did run amok. To mock the idea that moral hazard was a concern (or worse, to mock the idea that it should have been a concern is unacceptable.

Fannie and Freddie are the most expensive bailouts the taxpayers have taken on, and the errors of this mess can hardly be put at the feet of Hank Paulson. For all he has done wrong, he did not charter this massive monument to failed government social policy. He did not resist the aggressive efforts of others in the Bush administration to rein in their irresponsible leverage ratios. Barney Frank and two generations of congressional leftists had deified Fannie Mae and Freddie Mac, and more specfically, told their creditors that these were "government sponsored enterprises", giving an absolutely implicit guarantee that the government was backing the debt of these bloated pigs. All Paulson did was take over these entities that the govenrnment had spent forty years saying they would back if things ever got bad enough. Well, guess what: they got bad enough. PIMCO's bond book got written up like no trading gain in American history, the equity got wiped, and if anything, Paulson was harshly criticized for letting the preferred equity get wiped that so many banks were holding on their balance sheets. A real market ideologue like me may hate the fact that Fannie Mae or Freddie Mac ever existed, but even I have to acknowledge the legal responsibility the Treasury had to these "government sponsored enterprises." Again, to Tibman, if they bailed out Fannie they should have bailed out Lehman. It is a dubious assertion.

Then there is the sickening bailout of AIG. The argument at the time was that Lehman lacked sufficient collateral to extend financial help to (an incontestable claim), yet that AIG held adequate assets to back the loan (now known to be totally false). The taxpayers are going to re-claim most of the money extended to AIG at some point in time, I think. They will never be made whole. And this is unacceptable. But at the very least, I am hard-pressed to see why the conclusion is not "two wrongs do not make a right." Tibman never explains why one firm getting wrongly bailed out means that every firm who poses systemic... Read more ›

12 of 15 people found the following review helpful:

4.0 out of 5 stars thanks for making it personal, October 8, 2009

By 

Matthew De Angelis "true average joe" (Durham, NH USA) - See all my reviews
(REAL NAME)   

This review is from: The Murder of Lehman Brothers: An Insider's Look at the Global Meltdown (Hardcover)

This is a good book. Not a great book. For folks without a financial background but with an intellectual curiosity, it puts into perspective the elements of a perfect storm that culminated in the LB disaster. It's great to have the different blamable forces called out - to see how past Presidents helped create the fiasco, how government agencies lived up to the levels of incompetence we always feared they had (but prayed they didn't), how the Fed (wizards?) black magic stirred the pot that would become the maelstrom, how a culture of Kool-Aid drinking savage money addicts (i.e.the Street folks) deluded themselves, and how everyday people who desperately wanted the 'American Dream' let themselves feast on the pile of crap that was mounding before them. Let's not forget Fuld and Gregory - they deserve an ineffable amount of blame. I'm going to have a hard time trusting investment banks after this. But then we should have guessed. When it's too good to be true, it ain't. You never get something for nothing. Fool me once ... let's not go there (I'll leave that to W). It will all happen again. The system is BROKEN ... The book rings all too true. But it is tedious in places (I could have been spared pages and pages of company history and internal politics - maybe Street people will enjoy the details). There's no way this book could have been written by someone who had only a few short years at the company. It has a depth that makes it convincing, it's not only well researched, it's told from a perspective that is the essence of what makes this book recommendable - it's told from the perspective that 'it's personal'. There are expletives here and there ... after reading it ... not nearly enough!