Brother Bear 2

"A plan to flood the market with counterfeit stocks helped kill Bear Stearns and Lehman Brothers - and the federal government did not bust the culprits." Matt Taibbi in Rolling Stone.

It's always a pleasure to read articles little conspiracy theory from time to time from a magazine like Rolling Stone. As expected there are many defects, but there are also some grains of truth.
The full article is interesting, but deeply flawed. Emphasis is placed on short selling and how it killed Lehman Brothers and Bear. Some statements are true. Short-sellers of all persuasions do not put pressure on both Lehman Brothers and Bear. There can be little doubt that the end of each business came soon after. The author of the article acknowledges that it would be absurd to blame the credit crisis on Lehman Brothers and Bear. However, a heavy focus on selling not overshadow the fact that both Lehman Brothers and Bear had significant toxic risk in their balance sheet (like other financial giants). Lehman had been the target of rumors, at intervals in the past - rumors that she was able to dispel. The reason the short sale was successful, with those who shorted the stocks to benefit because the rumors about the two companies have been quite true. Nobody outside Lehman Brothers and Bear had precise figures, but at least at Lehman management had a history of aggressively against attack, and IB cases on the short nose bleeding. "Hedge" as David Einhorn have been right to argue that the loss of Lehman Brothers have been worse than the company publicly announced. No, the two bears and a collapse of Lehman Brothers has led to unsafe levels of real estate risk has gone wrong.

In the interest of balance, I agree with the assertion that the authors of the SEC is not required to control the sound. In "The Murder of Lehman Brothers," I said that screeners wee SEC stripped of powers and there was a tacit "do not respect" the existing order. Since the publication of the book, SEC independent inspector general's report on David Kotz Maddoff confirms to resell.

I also agree that the appointments of the Obama administration for funding have included people who at least intermediate skiing (Wall Street execs, with the usual heavy-weight to Goldman) are a disappointment. Even assuming that these officials will act responsibly, the mere appearance of potential conflict of interest is problematic if we are to restore confidence in the government's ability to oversee financial markets impartially. Few Americans believe that the influence of Wall Street to Washington is on the decline - and they are right.

There are also assumptions made about an infamous March 11, 2008 meeting of the Fed, which included all the major financial players (including Fuld CEO of Lehman), but not that of Bear Stearns, a few days before the collapse . The author suggests that there was at least a discussion on the imminent collapse of Bear Stearns. What is problematic about this argument is that the collapse of Bear would only cause rumors and shorts go to Bear Lehman and Fuld have known this. Shortly after this meeting, Fuld has flown to India for Lehman, but to cancel a major event and rush back to NY then later when the crisis emerged Bear. Fuld did not leave India, he knew he would be rushing back to New York to work with other top execs to dispel rumors about Lehman while the dialogue in meting 3 / 11 Bear said would soon be ruined.

The author also simplifies and misleads by saying that Paulson has killed Lehman. Although I think the decision by Paulson that Lehman bankruptcy was a mistake, I do not think it was made to concentrate more power in Wall Street Goldman, his former firm. It seems much clearer that he initially sought a solution that would avert Lehman's use of taxpayer money and instead negotiated a.