Cast of Characters
Lehman Brothers (31st Floor) / Members of the Executive Committee
Richard S. Fuld Jr.: chairman of the board and chief executive officer
Joseph Gregory: president and chief operating officer
David Goldfarb: former chief financial officer; former global head of principal investing; chief strategy officer
Christopher OMeara: chief financial officer, 200507; chief risk officer Erin Callan: managing director and head of hedge fund investment banking; chief financial officer, 200708
George Walker IV: managing director and global head of investment management
Ian Lowitt: chief administrative officer; chief financial officer, 2008
Lehman Brothers (Traders, Investment Bankers, Risktakers, Salespeople)
Michael Gelband: managing director and global head of fixed income; head of capital markets; member of the executive committee
Alex Kirk: managing director and global head of high-yield and leveraged-loan businesses; chief operating officer of fixed income; global head of principal investing
Herbert Bart McDade: managing director and global head of fixed income; global head of equities; president, 2008; member of the executive committee
Eric Felder: managing director and head of global credit products group; global head of fixed income
Dr. Madelyn Antoncic: managing director and chief risk officer; government liaison
Thomas Humphrey: managing director and global head of fixed-income sales
Hugh Skip McGee: managing director and global head of investment banking
Richard Gatward: managing director and global head of convertible trading and sales
Lawrence E. McCarthy: managing director and global head of distressed-debt trading
Joseph Beggans: senior vice president, distressed-debt trading
Peter Schellbach: managing director, distressed-loan trading
Terence Tucker: senior vice president, convertible securities sales
David Gross: senior vice president, convertible securities sales
Jeremiah Stafford: senior vice president, high-yield credit products trading
Lawrence G. McDonald: vice president, distressed-debt and convertible securities trading
Mohammed Mo Grimeh: managing director and global head of emerging markets trading
Steven Berkenfeld: managing director and chairman, investment banking commitments committee
Lehman Brothers (Research and Analysis)
Christine Daley: managing director and head of distressed-debt research
Jane Castle: managing director, distressed-debt research
Peter Hammack: vice president, credit derivatives research
Ashish Shah: managing director and head of credit strategies, derivatives, and research
Karim Babay: associate, convertible securities research
Shrinivas Modukuri: managing director, mortgage-backed securities research
Lehman Brothers (Mortgage and Real Estate)
David N. Sherr: managing director and global head of securitized products
Mark Walsh: managing director and global head of commercial real estate group
Lehman Brothers Family and Former Lehman Brothers Partners
Robert Bobbie Lehman: chairman, 192569, and the last of the brothers to head the firm
Christopher Pettit: president and chief operating officer, 199496
John Cecil: chief administrative officer, chief financial officer, 19942000
Bradley Jack: president and chief operating officer, 200204
Peter G. Peterson: former chief executive officer; former U.S. secretary of commerce; founding partner of the Blackstone Group
Steve Schwarzman: former investment banker; founding partner of the Blackstone Group
Senior Government Officials and Banking/Investment Industry VIPs
Henry M. Paulson Jr.: former CEO of Goldman Sachs; former secretary of the U.S. Treasury
Ben Bernanke: chairman, U.S. Federal Reserve
Timothy F. Geithner: former president, Federal Reserve Bank of New York; secretary of the U.S. Treasury
Jamie Dimon: chief executive officer, JPMorganChase
David Einhorn: founder, Greenlight Capital
John Devaney: chairman and chief executive officer, United Capital Management
Corporate Financial Personnel
Anand Iyer: managing director and global head of convertible securities research, Morgan Stanley
Tony Bosco: managing director, convertible securities trading, Morgan Stanley, acquisitions
Gary Begnaud: Philadelphia branch manager, Merrill Lynch
Family and Friends
Lawrence G. McDonald Sr.: father, investor, golfer
Debbie Towle McDonald OBrien: mother, fashion model
Ed OBrien: stepfather and lawyer
Bob Cousy: family friend; point guard, Boston Celtics
Steve Seefeld: best friend at Falmouth High and Wharton; partner, ConvertBond.com
Kate Bohner: longtime friend and television financial journalist
Jack Corbett: longtime friend and successful retail stockbroker
Fallen Angels
Jeff Skilling: president and chief executive officer, Enron
Angelo R. Mozilo: chairman and chief executive officer, Countrywide Financial
Authors Note
Its been said that there are two distinct groups of people in America: Wall Street and Main Streetthe former composed of people who keep the financial plumbing of the latter in good condition so that everyone will prosper. Wall Street has, however, become increasingly complex and opaque, and many on Main Street have only the most basic notion of what it does. In addition, Wall Street, particularly with the collapse and bankruptcy of Lehman Brothers in September 2008, was the epicenter of the worldwide financial crises that brought the global economy close to a complete collapse. My objective in writing A Colossal Failure of Common Sense was twofold. First, to provide Main Street with a close-up, inside view of how markets really work by someone who was on the trading floor in the years leading up to Lehman Brothers calamitous end. And, second, to give my colleagues on Wall Street as crystal clear an explanation as possible about the real reasons why the legendary Lehman Brothers met with such a swift ending. The lessons therein are important for beginning to understand how we can prevent such disasters in the future and ultimately do a better job of serving Main Street.
Lawrence G. McDonald, July 2009
A house divided against itself cannot stand.
Abraham Lincoln,
June 16, 1858