Judging by the headlines, you’d think the troubled investment bank would go belly up any day now. In fact, it probably never will.
Why? Because this whole thing is just like a giant game for the fat cats, and on Wall Street — and as usual — the sucker is us. So let’s just cut through all the bullshit and talk about what’s really going on, okay?
Lehman may not be too big to fail, but it may be too important to fail. Why? Because Richard S. Fuld Jr., Lehman’s chairman and chief executive, is too important. He is a member of an exclusive club: the board of directors of the Federal Reserve Bank of New York. It’s hard to believe that the Fed would let one of its own fail the way Bear Stearns did. Another member of club Fed, James Dimon, JPMorgan Chase’s chief executive, was handed the deal of a lifetime. Alan D. Schwartz of Bear Stearns? Not a member. Given Mr. Fuld’s access to Fed chief Ben S. Bernanke and Mr. Bernanke’s man on Wall Street, Timothy F. Geithner, Mr. Fuld is in a much better position than his rivals to keep his firm alive. A prediction: Watch the Fed’s discount window for loans to brokerage firms. It won’t close until Mr. Fuld is out of the woods.
That’s right, they’re all in this little CLUB together and it’s a CONSPIRACY and you know, you want to believe that Dick Fuld is trying to do the right thing and that he has a heart, but look — look at the picture above that is the only picture in existence of him smiling, and Andrew is just not sure what it all MEANS. Let’s hope he figures it out on vacay. Rest up, dude.
Lehman’s Woes Haunt the Last Days of Summer [NYT]