Busted: Bankers and The Global Economy

September 12, 2008

Lehman: The Prophecy of Failure

Lehman Brothers paints themselves as an innovator in global finance as they serve the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. They “maintain leadership positions in equity and fixed income sales, trading and research, investment banking and investment management.

In advance of the collapse of investment banker Bear Stearns in March of this year, rumors have been circulating continually about the demise of Lehman. Those have hardly quelled since then. As a result, the value of the stock holdings has steadily evaporated and the value of the investment bank plummeted.

Employees are now worried and expecting pink slips. The New York Times is pointing out that the Lehman decline is much like Bear Stearns. However, while the failure and decline is similar, the circumstances that brought those about is very much different.

The demise of Bear Stearns was brought about by bungling, bad financial moves within the banking system and an ensuing panic. The collapse was quick and decisive. The decline of Lehman has been created by the prophecy of pessimism, the fear of weakness which has been mostly unrelenting. This undercurrent of perceived weakness has evolved over time despite the efforts to prop up the firm.

The Times reports an employee as saying, “Everyone is walking around like they have just been Tasered. Everyone was always hoping we would pull through. Now, that is not really an option.” The undercurrent involving a lack of confidence has been pernicious, even on the inside.

The media has talked up the demise and is now talking up the sale of the company. “The cold prospect of losing a life savings in Lehman stock has become more of a reality, many employees have grown resentful.” While that is true, the idea of investing is usually based on a sound investment. It is sad that employees have chosen to sink with the ship instead of divesting themselves if that were possible. What is more sad is that a wealthy corporation like Lehman hasn’t bothered to secure even a small portion of interest in their employees. That is, in fact, the dilemma that threatens the very fabric of American society. It’s all about “me.” This eighties born attitude rises to the top of the corporate ladder. The backlash has been and will be substantial except for the corporate leaders.

It is true that business is not about charity. However, this writer is not discussing charity. The problem is that life in America has become so self-centered that the prospect of tomorrow is rarely if ever addressed. There is lack of planning and little care for tomorrow or for anyone else on any level. That attitude is as prevalent at the top of business as it is at the bottom. The nation has thoroughly corrupted itself and the corporate environment that it originally built. There is not even the illusion of responsibility. Live for today for tomorrow is its own.

Sooner or later, that attitude along with the prophecy of failure comes home to roost. ~ E. Manning

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