Friday, 28 December 2012

The Ghost of Christmas Past: Merry films of Lehman's Fall

I have no family in the UK, so I always exhibit strange behaviour on Christmas day. Last year I wondered around the City of London and took photos of empty bank offices, after which I attended a wedding of two Occupy protesters on the steps of St. Paul's cathedral. This year I wandered around Brixton and took photos, including one of the Space Invader mosaic above the chicken & chips shop on Coldharbour Lane, before going home to watch THREE whole films on the fall of Lehman Brothers.


Lehman has always held a special place in my heart because I had two interviews there in 2008, mere weeks before it collapsed. I sat up on the 36th floor and was questioned by men whose job it was to ascertain the robustness of my character. One of them said "you may have heard things in the press about us being in the shit, but these are the exaggerations of melodramatic journalists". A week later I was having another interview there, but little did I know that they were in the midst of negotiations with the Korea Development Bank, trying to convince them to inject much-needed capital in the bank. The MD interviewing me was a little distracted, though in my naive state, I wrote it off as normal MD-like behaviour, rather than the product of him being at a bank on the verge of crumbling.

The action behind the scenes leading up to final Lehman implosion is fascinating. Perhaps most striking is just how arbitrary the process was. In one dramatic weekend the US treasury secretary Hank Paulson hauled the CEOs of America's top banks into the New York Fed, and said, in a nutshell, "I bailed out Bear Stearns, now you guys must bail out Lehman". The negotiations hinged on whether Goldman, JP Morgan, Citigroup, Morgan Stanley, and a few other banks could agree to take on Lehman's bad assets in order to induce Bank of America or Barclays to buy the rest of Lehman. The famous twist in the tale comes when Merrill Lynch's John Thain cuts a private deal with Bank of America to save Merrill instead of Lehman. This leaves Barclays as the only possible suitor, but the deal runs into trouble with the UK regulators, leaving Lehman to collapse, only to be picked up by Barclays anyway at a much cheaper price. These are the basic events focused on by the three films I watched. To help you take your pick, I've given each film a rating below:

Film 1: The Last days of Lehman (2009)

A crap made-for-TV film if ever there was, but worth a brief watch to see the awesome James Cromwell playing Hank Paulson. Cromwell incidentally plays the Nazi eugenics doctor in the incredible series American Horror Story, and seems equally at home with both characters. It's debatable whether Hank Paulson can be compared to a genocidal scientist, but he certainly has helped to create financial monsters. In the final analysis, Cromwell saves an otherwise dismal cast of buffoon-like characters, and drags the film's rating up to 5.5/10.

Film 2: Too Big to Fail (2011)
This film portrays the same events as the Last Days of Lehman, only it does with much more style. William Hurt pulls a great performance of Hank Paulson, but the highlight of the film for me was Paul Giametti playing Ben Bernanke. The guy who plays Goldman Sach's CEO Lloyd Blankfein is also very entertaining. It's based on the book of the same name by Andrew Ross Sorkin, who himself appears as a journalist in the film. It's light on technical detail of what was going on, but is overall pretty well acted and scripted, giving a reasonably realistic human face to the key players. I give this one 7/10.

A quality BBC documentary with some heavy hitters being interviewed, including Bob Diamond and Gordon Brown, plus several of the main players during the fall of the bank. It's the traditional talking-heads style, so no great prizes for innovation, but it gives a solid account of the chaotic Lehman balls-up. I reckon it earns 7.5/10, maybe even 8 if you've had a few whiskeys.

Suitpossum does Youtube
In conclusion, I've decided to launch a little Youtube Channel to showcase some of these videos. I'm thinking of calling it Suitpossum's Guide to Global Finance channel. It doesn't have much on it yet, but I'll be making useful playlists, and maybe even creating my own videos. Exciting times.

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