I don't get it, I thought Fuld taught us brawn was more important than brains on Wall Street. He was a Gorilla and cracked ribs and threatened to rip people's organs out and didn't take no prisoners or shit from anyone, shouldn't that count for something and by something I mean everything? SHOULDN'T IT??
Fuld was still ostensibly at the helm, but as one executive put it, "The fabric of what Dick built was visibly cracking." Fuld told McDade, "We're not together." McDade didn't have the time to worry about teamwork, and that seemed to set Fuld on edge. Some took it as a sign that Fuld worried McDade would toss him out, as Glucksman had tossed out his boss. A coup, though, had already taken place. "You need one guy in charge," said one person close to the process. And increasingly that was McDade.
To add to the insult, some on McDade's team felt Fuld was only getting in the way. McDade was respectful and kept Fuld in the loop. But explaining everything to Fuld only slowed the process. "He wasn't a very sophisticated thinker," was the view of some of McDade's team.
(Also: is that the PC term for mentally-challenged, Mr. Source? Admit. You called him a retard. You can tell me, I'm not gonna rat you out.)
Okay, this is actually a little sad.
After the bankruptcy, Paulson insinuated that Fuld had not searched hard enough for a buyer, but the truth was that he spent his summer in desperate talks. There was little interest, though. Lehman's crown jewel was its real-estate businesses, and real estate was where all the problems were. The search for a buyer was not only frantic but humiliating. Fuld told Bank of America, one potential buyer, "I think I can do a lot if I remain CEO, but it's not a condition," recalled one who was involved in the process. "Near the end, it was said in calls precisely. 'We have two priorities, that the Lehman name and brand survive and that as many employees as possible be saved,' " said a Fuld intimate. It was a carefully crafted script. In conversations with buyers, Fuld added, "You notice our priority isn't price."
Interesting! So I think what we're seeing here is that the Paulson really was behind Fuld post dinner-cum-hand job but Dick proceeded to blow it with the obsessive, stalker-y phone calls, e-mails, texts and drive-bys to HP's house.
Through the summer, Fuld phoned Paulson, sometimes more than once a day. He still counted Paulson a supporter who could save Lehman, though privately the Treasury secretary seemed perplexed by the volume of calls.
Jamie Dimon was faced with a dilemma: act in the best interest of his clients, or play fluffer to Lehman. Fuld was holding out hope that Dimon would not only choose the latter, but come bearing Tabasco sauce.
Then on September 9, JPMorgan Chase co-chief of investment banking Steven Black spoke to Fuld by phone. Chase brokered the funds that Lehman needed to operate day-to-day. Black told Fuld that JPMorgan needed $5 billion in extra collateral, and in cash. If not, everyone at Lehman understood, JPMorgan would not open for business for Lehman the next day, essentially freezing its accounts. And if that happened, it was over. JPMorgan had clients whose interests it had to defend. Still, as one executive close to Fuld said, "Jamie Dimon [JPMorgan's CEO] was doing whatever was in his own personal interest. He knew the consequence was a huge blow to us, and he didn't give a shit."
"They drained us of cash," Fuld later told an associate, who added, "They fucked us."
Lil' Fella had appointed himself cruise director on the SS Slocum, hadn't he?
Lehman had planned to announce its third-quarter results on September 18. "The feeling was, if we waited, the market would drill us to a penny stock," said one executive. So on September 10, it reported its third-quarter earnings, a loss of $3.9 billion. Simultaneously it unveiled a plan to go forward. It was putting a majority stake in its investment-management division up for sale and spinning off its troubled commercial-real-estate assets into a separate company.
There were a lot of moving parts, but Fuld tried to sound confident. "We have a long track record of pulling together when times are tough,'' Fuld said on a conference call with analysts. "We are on the right track to put these last two quarters behind us.''
Don't you DARE talk about John Thain that way.
And Merrill, everyone believed, was on life support--Merrill had, as one official put it, a bigger "pile of shit" on its books than Lehman.
(Alternative interpretation: SOMEONE's famous!)
You just don't get it. He was sparing them the embarrassment of having to be all "Yes, my liege," curtseying, kissing his feet, etc, which is standard protocol for peasants when in the presence of the King.
Fuld was not even at the table as Lehman's fate was decided, a tactical move that nonetheless told a larger story. Starting Friday night, September 12, a series of meetings was convened at the Fed's concrete fortress on Liberty Street, which sits atop the largest stockpile of gold in the world. Paulson and Tim Geithner, head of the New York Fed and now secretary-designate of Treasury, had summoned the heads of the country's largest investment banks. McDade and Kirk represented Lehman at the Fed that weekend. By then, McDade was calling most of the shots.
Fuld stayed back in the office and peppered Paulson, Geithner, and members of their teams with phone calls. "He would offer something," said one person who was with him. "It would come back 'no.' He'd take a deep breath, then come back with, 'How about this? How about this? How about this?' "
"We thought we had an understanding with Bank of America on Friday night," said one Lehman official. By Saturday, though, Bank of America's CEO Ken Lewis had stopped returning Lehman's calls.