in other words

Richard Fuld’s Day in Denial

The former CEO of Lehman Brothers stuck to his story at today’s Financial Crisis Inquiry Committee hearing. Here, a sampling of his most surreal statements.

• “Lehman was forced into bankruptcy not because it neglected to act responsibly.”

• There was “nothing, nothing” in Lehman’s books that signaled it might go bankrupt.

• On Lehman’s “de-risking” of its balance sheet by reducing leverage between 2007-2008: “We did have too much in commercial real estate (around $50 billion). We brought that down to $30 billion.” (As Colossal Failure of Common Sense author Larry McDonald observed on Twitter, that’s like saying, “Officer I was only going 95 in a 55, not 120.”)

• No, really, there was nothing wrong with Lehman’s books. Lehman did not need a bailout. It needed liquidity. “I understand all the noise about crisis and bailout and failure and whatever. Lehman needed liquidity,” he said at one point.

• And later: “There was no capital hole. Lehman had the capital. We needed the liquidity.”

• And again: “The terms that ended up being used were “crisis” and “bailout.” Had the Fed provided liquidity to Lehman Brothers, those terms could have been avoided.”

Richard Fuld’s Day in Denial