Comments on: Krugman on Lehman

By: Joe

Joe — Tue, 16 Sep 2008 14:29:17 +0000

When Bill Clinton and the Republican controlled Congress overturned the Glass-Steagall Act in 1999, it set these events in motion. Regardless of a person's capitalist or socialist leanings, it has to be understood that the greed of bankers must be corralled, or else they risk ruining the economy as they always do when allowed to roam free.

By: DL

DL — Tue, 16 Sep 2008 13:35:42 +0000

I was involved with WallSt. when the transition began between the stodgy old finance world and modern times. Then Sears bought Dean Witter and sales, not investment, became the new criteria. New Brokers were trained to just get a new book (clients) when you burned out the old ones. New products became the seduction and the slowness of the old banks to react to the Carter inflation allowed millions of new clients to be captured by much higher CD prices etc. Once captured then new attractive (riskier?) product turned what was once savings account millions into stocks, bonds and option trading money. The end result of that non-conservative game is now being felt by all.

By: Steve Plunk

Steve Plunk — Mon, 15 Sep 2008 23:36:03 +0000

Anjin-san,

We're on the same page about a lot of things. Right is right, wrong is wrong, we debate the few things in the middle. In the long run we both want what is good for our country, our kids, and ourselves.

By: anjin-san

anjin-san — Mon, 15 Sep 2008 22:36:00 +0000

On my left, the BDS media that have been working hard for the last couple of years to assure that the economy had a significant downturn just before the election

Its a ......... vast........ left........wing............. conspiracy!

Careful Spoker, there is a guy with a straight jacket catching up with you.

By: Spoker

Spoker — Mon, 15 Sep 2008 22:04:51 +0000

Welcome to the real world of unintended consequences.

Here on my right, please allow me to introduce you to those that practice greed for personal gain based on that good old Harvard B-school model of the ‘only thing that counts is what have you done for me this last quarter’, ‘long term consequences be damned’, and ‘I got mine, yours is your problem’.

On my left, the BDS media that have been working hard for the last couple of years to assure that the economy had a significant downturn just before the election in support of the Dems. What a fine group of folks all!

On behalf of the American people that will pay dearly and long for this mess you have caused I want to thank you. May you each die a slow death of 10,000 fire ant stings as you are staked-out naked over a vat of sweet clover honey.

By: anjin-san

anjin-san — Mon, 15 Sep 2008 21:11:29 +0000

Steve,

I think we are on the same page on this one. Seems to me that "leaving this job with buying an island money regardless of consequences" is #1 to a lot of this generation's CEOs.

By: Steve Plunk

Steve Plunk — Mon, 15 Sep 2008 20:50:22 +0000

Anjin-san,

True capitalist understand no corporate exec is or should be selfless. The job is to lead the company to returns and security for the stockholders. Many of these CEOs do nothing of the sort. For short term profits they have endangered long term security. The Boards have conveniently looked the other way.

I love America and in America seeking corporate profits the correct way is good. Screwing your own company is bad.

By: charles austin

charles austin — Mon, 15 Sep 2008 19:27:41 +0000

Steve, I guess I am most surprised that this seems to have been yet another big surprise to the super smart people in the investment community who are supposed to be on top of all this sort of thing. Perhaps the real problem isn't that risk had been hidden so much as it was assumed to have vanished altogether. Those are some sandy foundations on which these big structures have been built.

Anyway, it is refreshing to hear that Lehman will not be bailed out. One of the oft-overlooked features of capitalism is that businesses that screw up go out of business. Maybe the silver lining here will be folks thinking a little more conservatively about debt and risk.

By: DC Loser

DC Loser — Mon, 15 Sep 2008 19:00:00 +0000

Considering the average compensation package for a Wall Street investment banker last year was about $600k. Can I get paid half that price if I only lose half as much money as they did?

By: anjin-san

anjin-san — Mon, 15 Sep 2008 18:53:51 +0000

Steve how dare you question the compensation packages of our wise and selfless corporate leaders? Why do you hate America dude?

By: Steve Plunk

Steve Plunk — Mon, 15 Sep 2008 18:45:45 +0000

I wonder if those responsible will pay a price? Lehman's CEO just a banked a $22 million bonus in the last year. Is he really going to hurt if that bonus isn't there this year? How about the Board of Directors? Will the group most responsible actually be responsible? I doubt it. It goes back to the monopoly money statement. To many in this business it is fake money. It's abstract figures, "phone calls and mouse clicks". I don't think any Lehman Bros. execs are going to lose their house over this. Fact is they will all walk away relatively unscathed.