Wall Streetwalkers: The Sleazy Lehman Brothers Subsidiary
Lehman Brothers CEO Dick Fuld told Congress on October 6 that the Wall Street investment bank was destroyed by a “financial tsunami”—a natural disaster, an act of God.
In other words, it wasn’t his fault.
But the truth is that Lehman’s fall in the subprime-mortgage crisis was a man-made disaster. The white-shoe firm was not just deeply involved in the murky subprime-mortgage market; Lehman and the other dominant Wall Street investment banks, experts tell the Voice, actually created the demand for the mortgages that they would then package and swap for enormous returns. Addicted to the profits that such securities brought in, Lehman was desperate for the risky mortgages they required
.